Concordia Protocol

A Protocol Enabling Trustless Atomic Swaps of Digital Deliverables

Abstract. The Concordia protocol is a versatile and decentralized solution that facilitates irrevocable atomic exchanges of digital work for cryptocurrency. This protocol addresses the inherent challenges of trust and security in online collaborations by providing a transformative approach to enhance trust, transparency, and efficiency in digital work exchanges. By establishing clear conditions and utilizing cryptographic techniques, Concordia fosters a more equitable and harmonious environment for all parties involved.

1. Introduction

The workforce landscape has been significantly shaped by the internet and globalization, offering flexibility in employment opportunities. However, this new model of work presents challenges in establishing trust and ensuring security between individuals collaborating online, often located in different jurisdictions. Contractors face payment security risks while clients have concerns about making payment advances without receiving work.

To address these challenges, a highly-configurable and decentralized intermediary is needed to enable trustless atomic transfers of digital assets between two consenting parties. This intermediary establishes conditions prior to delivery, ensuring the integrity and finality of each exchange.

2. Architecture

The Concordia protocol consists of multiple components within a single “instance”. These components include an ECDSA (Elliptic Curve Digital Signature Algorithm) key pair, a smart contract deployed on a peer-to-peer (p2p) network, a decentralized p2p datastore, and a specialized "decryption oracle" with the capability to read from the datastore and write to the contract. The contract exposes a public key for transparency, while the private key remains securely accessible only to the oracle.

To handle scenarios such as key exposure or network scaling adjustments, a proxy contract is utilized. This proxy contract allows for the creation and retirement of instances as needed, providing enhanced control over the network.

3. System Overview

The Concordia protocol follows a three-stage procedure for each exchange: (1) delivering an encrypted deliverable, (2) securing payment, and (3) decrypting the deliverable. Through a combination of cryptographic techniques and blockchain technology, the protocol safeguards the interests of both parties.

3.1 Deliverable Encryption (Creating a Concord)

During the initial setup, the proprietor generates an encrypted version of the original deliverable w, resulting in w_k. This encryption process employs the Advanced Encryption Standard (AES) and a unique secret key k. The secret key is further encrypted using the ECDSA public key provided by the contract giving us k_p, ensuring its secrecy on a public ledger. The encrypted file w_k is then securely uploaded to the InterPlanetary File System (IPFS), assigned a unique content identifier CID.

A checksum c is generated by hashing w and k independently, combining the hashes into a single byte array, and applying the keccak256 hash function.

The proprietor and client may decide to appoint a third party to verify the quality of the deliverable which can also be enforced by the contract (see section 4).

Finally, a transaction is initiated, including k_p, c, and CID, creating a "concord" on-chain

3.2 Approval (optional)

If some arbiter is appointed, they must approve the concord prior to Finalization.

3.3 Payment

In order to decode the decryption key and decrypt the deliverable, the client must pay the full amount of the concord in a single transaction. Upon receiving full payment, the concord can be finalized.

3.4 Finalization

Upon receiving full payment, an oracle is provided with CID and k_p. The oracle fetches w_k from IPFS using the CID and decodes k_p to retrieve k. w_k is then decrypted with the original key k resulting in the original deliverable w.

The oracle computes the hash of w and k, combines them into a byte array, and applies the keccak256 hash function. If the resulting hash matches c, k was successfully able to decrypt the deliverable and the concord is finalized.

All sales are final when the concord is finalized.

3.3 Delivery (Decrypting a Deliverable)

With the completion of the above stages, the buyer uses the key k to decrypt w_k, accessing the original deliverable, w.

4. Arbitration

Clients may have concerns about paying for encrypted work. Proprietors utilizing the Concordia protocol are encouraged to continue demonstrating their work to clients, similar to traditional settings. By proving that the showcased work matches the encrypted version stored on the decentralized file store, proprietors can instill confidence in the deliverables.

Additional methods can be employed to further automate or enhance confidence in the delivered work:

4.1 AI-Powered Verification: AI algorithms can be utilized to verify the integrity and quality of deliverables, recognizing specific patterns or parameters relevant to each work type.

4.2 Appointed Human Verifiers: Human verifiers can be involved in the quality assurance process, performing audits of the work and providing approval before finalization.

4.3 Partially Obfuscated Previews: Concordia incorporates a partially obfuscated preview mechanism, allowing buyers to access a part of the deliverable before making the final payment without revealing the entire content. This process ensures security and builds confidence in the work.

5. Conclusion

The Concordia protocol represents a comprehensive solution to the challenges of trust and security in online collaboration. By leveraging blockchain technology, cryptographic operations, and third-party validation, Concordia facilitates trustless atomic swaps of digital work. The protocol establishes clear conditions, provides transparent encryption and decryption processes, and quality assurance measures. By adopting Concordia, users can experience a cooperative environment where the integrity of exchanges is upheld.