Decentralized Protocol “Glimpse” for Secure and Efficient Cross-Cryptocurrency Transactions

Researchers at TU Wien have created a novel protocol called “Glimpse” that enables efficient and secure cross-cryptocurrency transactions without the need for large centralized crypto-depots. The protocol, presented at the prestigious USENIX Security Symposium, offers new possibilities for the crypto world by facilitating reliable transfers between different cryptocurrencies. The research was conducted in collaboration with Pantos, a decentralized multi-blockchain token system funded by Bitpanda, an Austrian financial services company.

Cryptocurrencies, including the well-known Bitcoin, have different technical features and implementations. To exchange one cryptocurrency for another, commonly used “bridges” provided by companies holding various cryptocurrencies have led to security issues and high-profile criminal cases, resulting in the theft of billions of euros worth of cryptocurrencies.

To address this, researchers at TU Wien have developed a groundbreaking protocol named “Glimpse” that enables the secure and efficient exchange of cryptocurrencies in a completely decentralized manner, eliminating the need for large crypto-depots offered by commercial providers. This protocol, set to be presented at the prestigious USENIX Security Symposium, has the potential to revolutionize the crypto world. The research paper is already available online.

Cryptocurrency transactions are stored in public ledgers known as blockchains, which track the complete transaction history. Cryptocurrencies offer programmability, allowing for complex transactions that become valid only when specific conditions are met through smart contracts. However, cross-currency transactions between different cryptocurrencies are more challenging and not supported by default.

The Glimpse protocol overcomes these limitations, enabling efficient, secure, and decentralized cross-currency transactions. The research was conducted in collaboration between TU Wien and Pantos, a decentralized multi-blockchain token system funded by Bitpanda. The team involved in the research includes lead author Giulia Scaffino, Lukas Aumayr, and Zeta Avarikioti.

The protocol allows users to exchange one cryptocurrency for another even if the two currencies are not technically connected. For example, if a Bitcoin owner wants to exchange Bitcoins for Ethereum, they can establish a transaction with an Ethereum owner. The Ethereum owner generates a random number, which is then shared with the Bitcoin owner. A smart contract is created in the Ethereum blockchain, guaranteeing the transfer of a specific amount of Ethereum to the Bitcoin owner once certain conditions are met.

To fulfill the conditions, the Bitcoin owner transfers Bitcoins to the Ethereum owner in the Bitcoin blockchain and includes the random number in the transfer to ensure security. Using the block containing the transfer, the random number, and an agreed-upon number of subsequent blocks, the Bitcoin owner can prove on the Ethereum blockchain that the Bitcoins were successfully transferred. This completion of the smart contract conditions allows the agreed amount of Ethereum to be transferred.

The Glimpse protocol is designed with efficiency and compatibility in mind. It ensures that only a relatively small amount of data is needed to prove the transfer, avoiding the impracticality of requiring large portions of a blockchain with hundreds of gigabytes of data. The protocol aims for maximum compatibility with existing blockchains, supporting as many cryptocurrencies as possible.

The protocol could be integrated directly into existing crypto software, and discussions are underway with Bitpanda, the research team’s close collaborator. Beyond cryptocurrency exchange, the Glimpse protocol offers broader applications, such as facilitating crypto-loans within smart contracts and enabling various decentralized financial instruments like asset migrations, token wrapping, and unwrapping.

In conclusion, TU Wien’s Glimpse protocol provides a decentralized solution for efficient and secure cross-cryptocurrency transactions. With the potential for integration into existing crypto software, it opens up new possibilities for the crypto world.

Takeaway

  1. Researchers at TU Wien have developed a decentralized protocol called “Glimpse” that enables secure and efficient cross-cryptocurrency transactions without relying on large centralized crypto-depots.
  2. The Glimpse protocol allows for the reliable exchange of one cryptocurrency for another by utilizing smart contracts and verifiable proofs across different blockchains.
  3. The protocol, presented at the USENIX Security Symposium, offers compatibility with existing blockchains and supports a wide range of cryptocurrencies, making it a versatile solution for the crypto world.
  4. In addition to facilitating cryptocurrency exchange, Glimpse has the potential for broader applications such as enabling crypto-loans, asset migrations, and token wrapping/unwrapping within smart contracts, providing new decentralized financial instruments.

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