Author: Chris Stewart 2022-03-03 12:58:55
Published on: 2022-03-03T12:58:55+00:00
Discreet Log Contracts (DLCs) can be used for recurring subscriptions, similar to how ACH works in traditional finance. With DLCs, users can give access to a certain amount of Bitcoin to be withdrawn at a specified time in the future, without requiring an on-chain transaction. For example, Netflix could create an oracle representing a monthly subscription, and users would set up DLCs with Netflix that would be executed at the end of each month. The DLCs are unilaterally funded, meaning no Bitcoin transaction is required to create the subscription, and they can be canceled at any time. Netflix would attest that it's time to charge the user for their subscription, decrypt their adaptor signature to get their signature to send funds to Netflix, and publish the settlement transaction for the DLC, which pays Netflix its subscription fee for the next month. DLCs also allow providers to specify how much they can withdraw, ensuring that they cannot withdraw more or less than authorized. This brings the same principle of recurring payments to Bitcoin, with the added benefit of cryptographic enforcement of withdrawal limits. While there may be concerns about the provider being both the oracle and the entity receiving a monthly payment, this risk is mitigated by the fact that the amount of money in the subscription is predetermined, and the oracle cannot withdraw excess funds if they are evil. Additionally, users can cancel their subscription at any time, and providers can only steal at most one month's worth of service fees across the entire customer base.
Updated on: 2023-05-22T17:47:41.826950+00:00