Mar 22, 2017

TL; DR

"The Bitcoin system performs an iterative, very large-scale, public computa- tion, where so-called miners are contributing significant computational resources to the gradual extension of the Bitcoin block chain. Essentially, this block chain contains a sequence of hash values B1 , . . . , Bτ that satisfy certain conditions. These conditions determine the difficulty of finding new blocks in the chain. The Bitcoin system frequently adjusts the difficulty, depending on the computational resources currently contributing to the Bitcoin network, such that about every 10 minutes a new block Bτ+1 is appended to the chain. Thus, the block chain can serve as a [computational] reference clock, where the current length τ of the chain tells the current 'time', and there are about 10 minutes between each 'clock tick'.

...

The key idea behind our construction of time-lock en- cryption is to combine a computational reference clock with witness encryption."

https://eprint.iacr.org/2015/478.pdf pages 3,4