BTLE: Atomic Swaps with Time-Lock Puzzles

We present BTLE (Broadcast Time-Lock Exchange Protocol), a two-step protocol that aims to decentralize exchange of funds between two blockchains in scenarios similar to online exchanges. BTLE leverages time-lock puzzles to achieve that. In the first phase, the BTLE-MA protocol allows for a matching between a market maker and one of the competing market takers. In the second phase, the BTLE-AS algorithm allows the exchange between the market maker and the winning market taker. It is not necessary to use both the BTLEMA and BTLE-AS algorithms in a decentralized-exchange scenario: existing atomic swaps based on hashed time-lock contract (HTLC) can benefit from BTLE-MA and can be adapted to an exchange where there are multiple possible participants. Moreover, BTLE computations are off-chain, so BTLE can be used in those blockchain pairs where at least one of the two does not have a scripting language or where the pair do not have the same hash function in common. This solves a limitation of HTLC-based atomic swaps. We also propose a new time-lock puzzle based on Pell conic calculations as an alternative to the classical time-lock puzzle of Rivest et al. BTLE has been implemented and tested. Experiments demonstrate that this new timelock puzzle based on the Pell conic is superior for the intended goal. With an N-bit modulus of 2,000 bits, the RSW-TL approach resolves the puzzle in approximately 100 s, whereas our BM-TL method requires over 4,000 s, significantly reducing the number of squaring operations needed.