== Background

OP_PRANDOM is a new op code for Bitcoin that pushes a pseudo-random number
to the top of the stack based on the next N block hashes. The source of the
pseudo-random number is defined as the XOR of the next N block hashes after
confirmation of a transaction containing the OP_PRANDOM encumbered output.
When a transaction containing the op code is redeemed, the transaction
receives a pseudo-random number based on the next N block hashes after
confirmation of the redeeming input. This means that transactions are also
effectively locked until at least N new blocks have been found.


== Rational

Making deterministic, verifiable, and trustless pseudo-random numbers
available for use in the Script language makes it possible to support a
number of new smart contracts. OP_PRANDOM would allow for the simplistic
creation of purely decentralized lotteries without the need for complicated
multi-party computation protocols. Gambling is also another possibility as
contracts can be written based on hashed commitments, with the winner
chosen if a given commitment is closest to the pseudo-random number.
OP_PRANDOM could also be used for cryptographically secure virtual asset
management such as rewards in video games and in other applications.


== Security

Pay-to-script-hash can be used to protect the details of contracts that use
OP_PRANDOM from the prying eyes of miners. However, since there is also a
non-zero risk that a participant in a contract may attempt to bribe a miner
the inclusion of multiple block hashes as a source of randomness is a must.
Every miner would effectively need to be bribed to ensure control over the
results of the random numbers, which is already very unlikely. The risk
approaches zero as N goes up.

There is however another issue: since the random numbers are based on a
changing blockchain, its problematic to use the next immediate block hashes
before the state is “final.” A safe default for accepting the blockchain
state as final would need to be agreed upon beforehand, otherwise you could
have multiple random outputs becoming valid simultaneously on different
forks.

A simple solution is not to reveal any commitments before the chain height
surpasses a certain point but this might not be an issue since only one
version will eventually make it into the final chain anyway -- though it is
something to think about.


== Outro

I'm not sure how secure this is or whether its a good idea so posting it
here for feedback

Thoughts?