Random Values in Ethereum

Here is the evolution of the problem of random values in Ethereum:

1. Denny’s lottos approach, use future hashes of blocks. These are psuedorandom, but the problem is that miners know which they have when they get a block. So if it makes enough difference for bets of the miners and/or people paying the miners, they can just not publish it and affect the odds.

2. Have commitments to random value from the different players H(R1), H(R2) and later R1, R2 are revealed(checked,) and combined. Failing to provide your value will give maximum losses. This one is secure, but it is a bit tedious and inconvenient two step process.

3. Finally, have a RANDAO where some parties put stake(like ethers) in, and commit random values like before. If they later come up with the actual values they get a payment, otherwise they lose their stake. The random values are accessible from other contracts with a small payment, or the DAO contract calls the other contract when the random value is in. (Me and Dennis McKinnon came up with it)

Basically the suppliers of the random values in the RANDAO can still fail to publish their random values. However, the stake they put in can be much larger than a single block reward, it can be large enough so that it cant be profitable to do so when there are some bets benefitting.

Afaik the above basically is the relevant story, here is an the main Ethereum thread about it.

The RANDAO still has to be created ‘in earnest’.