Bitcoin covenants are inevitable

Summary:

The bitcoin-dev mailing list has been discussing the implementation of covenants on Bitcoin protocol. While some may argue that covenants are not necessary and may have less than ideal reasons for their implementation, there are several technical benefits to adding them. These include better self custody solutions that don't rely on named third parties, more efficient DLCs, and significantly more tractable solutions for things like coin pools. These are the main reasons why people advocate for covenants, and they are not just "hackathon project" reasons. In response to a user who suggested that covenants could improve funding for Bitcoin developers and projects, John Carvalho pointed out that changes to Bitcoin software will never be justifiable simply because a few people think it's cool or will make them more popular. However, the OP argued that covenants are inevitable and will eventually be implemented via a soft fork. They also listed several other potential benefits of covenants, including allowing developers to build interesting projects with real demand in the market, providing better tooling for application developers, and potentially increasing demand for block space beyond just exchanges and coinjoin. While some may argue that covenants are contentious, the OP noted that there are zero technical NACKs for CTV and that all the developers who participated in the discussion are either okay with CTV or OP_TX or covenants in general. The OP believes that covenants should be implemented sooner rather than later, and that the review process for soft fork BIPs should be improved to facilitate this. They suggest using BIP 8 or an improved version of it for the soft fork, but are open to using other methods if it improves Bitcoin. The OP also notes that covenants implemented before the next cycle would provide an opportunity for developers to build interesting things during the bear market.

Updated on: 2023-06-15T21:24:10.403871+00:00