The below is a direct excerpt of Marty’s Bent Issue #1286: “The first mainnet DLC on Lightning has been executed.” Sign up for the newsletter here.

It’s been exactly 11 months and two days since we wrote about discreet log contracts (DLCs) in this rag. For those of you who are a bit rusty or completely ignorant in regards to what a Discreet Log Contract is, it is a special type of bitcoin transaction that executes a smart contract with information provided by an oracle.

For example, if two people want to bet on the outcome of Saturday’s NBA contest between the 76ers and Grizzlies they could create a DLC by locking up funds in a multisig address, pre-constructing outcome transactions — if the 76ers win send the sats to this address, if the Grizzlies win send the sats to this address — and choosing an oracle, a company that publishes final scores, e.g., Statmuse. The oracle provides a hash of the outcome of the game. When the game is over on Saturday the DLC could be closed out by the winner of the bet by signing the transaction that moves the sats in the smart contract to their address using the hash of the outcome provided by Statmuse.

A sports bet is but one example. Individuals could decide to wager on the price of bitcoin, the hash rate at a certain block height, the temperature on a particular day, or even create peer-to-peer derivatives like the team from ItchySats has done. If you freaks have…