Summary: Let \(\pi\) be an efficient two-party protocol that, given security parameter \(\kappa\), both parties output single bits \(X_\kappa\) and \(Y_\kappa\), respectively. We are interested in how \((X_\kappa,Y_\kappa)\) “appears” to an efficient adversary that only views the transcript \(T_\kappa\). We make the following contributions: (a) We develop new tools to argue about this loose notion and show (modulo some caveats) that for every such protocol \(\pi \), there exists an efficient simulator such that the following holds: on input \(T_\kappa \), the simulator outputs a pair \((X^\prime_\kappa,Y^\prime_\kappa)\) such that \((X^\prime_\kappa,Y^\prime_\kappa,T_\kappa)\) is (somewhat) computationally indistinguishable from \((X_\kappa,Y_\kappa,T_\kappa)\). (b) We use these tools to prove the following dichotomy theorem: every such protocol \(\pi\) is either uncorrelated – it is (somewhat) indistinguishable from an efficient protocol whose parties interact to produce \(T_\kappa\), but then choose their outputs independently from some product distribution (that is determined in poly-time from \(T_\kappa)\), or the protocol implies a key-agreement protocol (for infinitely many \(\kappa\)’s). Uncorrelated protocols are uninteresting from a cryptographic viewpoint, as the correlation between outputs is (computationally) trivial. Our dichotomy shows that every protocol is either completely uninteresting or implies key-agreement. (c) We use the above dichotomy to make progress on open problems on minimal cryptographic assumptions required for differentially private mechanisms for the XOR function. (d) A subsequent work [I. Haitner et al., Lect. Notes Comput. Sci. 11239, 539–562 (2018; Zbl 1443.94059)] uses the above dichotomy to makes progress on a long-standing open question regarding the complexity of fair two-party coin-flipping protocols. We also highlight the following two ideas regarding our technique: (a) The simulator algorithm is obtained by a carefully designed “competition” between efficient algorithms attempting to forecast \((X_\kappa,Y_\kappa)|_{T_\kappa=t}\). The winner is used to simulate the outputs of the protocol. (b) Our key-agreement protocol uses the simulation to reduce to an information theoretic setup and is, in some sense, a non-black-box.