Author: alicexbt 2022-07-19 14:46:46
Published on: 2022-07-19T14:46:46+00:00
The issue of whether to allow soft forks for covenants in Bitcoin is a topic of debate, and the potential danger of losing coins to covenants and thus fungibility and freedom to transact is a significant risk. While most UTXOs are already distinguishable from one another, the introduction of covenants could further break down fungibility. The term 'covenants' has a connotation of permanency, but the proposed use of covenants in Bitcoin involves adding temporary conditions that enable smarter transactions while coins remain in the owner's possession. The ability to add conditions to coins is desirable, but permanent non-terminating covenants would be undesirable. It is important to note that unlike real estate covenants, users can decide the exact set of encumbrances that will be placed on their coins when creating the receiving address. It is suggested that the term 'transaction introspection' or 'output introspection' be used instead of 'covenants.' Transaction introspection would allow a script or witness from the input of a transaction to specify that the validator examines components of the transaction itself, ensuring that some set of requirements imposed by the script/witness is fulfilled. Signatures already involve transaction/output introspection, and the CLTV and CSV opcodes also do transaction introspection. Therefore, seemingly unrelated opcodes like CAT, SUBSTR, or SHA256STREAM could also enable covenants in Bitcoin.
Updated on: 2023-06-15T21:29:08.344244+00:00