Author: Matt Corallo 2021-07-05 13:46:21
Published on: 2021-07-05T13:46:21+00:00
The discussion on enabling covenants in Bitcoin has been a topic of concern for several individuals. However, recent research has reduced the weight of arguments against covenants, and AJ's point has further weakened anti-covenant arguments. Multisig alone can enable recursive covenants, as a government can deposit funds into a multisig wallet that requires KYC and refuse to sign with their key unless the funds are spent to a new address following the same rules. This process is more efficient than an explicit covenant since it is off-chain. This is what Liquid already does, locking bitcoins into a multisig and enforcing an "off-chain" covenant that those bitcoins can only be redeemed after some valid set of signatures are entered into the Liquid blockchain. The difference between escaping from a recursive covenant and escaping from any consensus-enforced covenant seems to be a difference in procedure and difficulty rather than a fundamental difference in kind.
Updated on: 2023-05-21T03:13:10.806918+00:00