P2QRH / BIP-360 Update

The discussion revolves around the development and challenges faced in integrating libbitcoinpqc with existing Bitcoin protocol standards, specifically focusing on key entropy and BIP-32 support. The necessity for libbitcoinpqc to require key entropy is acknowledged, with an assurance that it will maintain compatibility with Hierarchical Deterministic (HD) wallets' features. This compatibility is crucial for ensuring that users can benefit from the security and efficiency advantages HD wallets offer without compromising on the new capabilities introduced by libbitcoinpqc.

A more complex issue highlighted is the integration of full BIP-32 support, especially concerning how extended public keys (xpubs) or watch-only wallets would function within this framework. The original message indicates uncertainty around this aspect, suggesting it as a significant hurdle to be addressed. The feedback received from the community regarding the initially proposed NIST V standard for security suggests it might be excessively stringent. In response, there's a consideration to update the specification to align with NIST I, which could potentially offer a more balanced approach to security without overwhelming the system's design. Additionally, for those seeking enhanced security beyond NIST I, the message proposes the option to utilize all three algorithms alongside Schnorr signatures, offering a pathway for users to tailor their security needs.

This exchange highlights the ongoing dialogue and collaborative problem-solving efforts within the Bitcoin development community, aimed at refining and advancing the cryptocurrency's underlying technologies. It underscores the balance developers must strike between introducing innovative features and maintaining the integrity and compatibility of the Bitcoin ecosystem.