Human meaningful witness versioning

Ava Chow has put forth a proposal to the Bitcoin Development Mailing List, suggesting a new criterion for the allocation of Witness versions that emphasizes human meaningfulness. The current system, as outlined in Bech32 (BIP-0173), allocates Witness Versions in a sequential numeric order starting from 0, with each version having a specific prefix following the "bc1" address prefix. For instance, Witness Version 0 is denoted by "bc1q", Witness Version 1 by "bc1p", and so on through the versions.

Chow proposes shifting from this numeric sequence to an allocation method that assigns Witness Versions based on mnemonic significance. This approach aims to simplify the identification of output types by their addresses. The discussion was initially sparked by considerations over whether BIP-360 should use Witness Version 3, which would result in a "bc1r" prefix (with "r" symbolizing resistance), or proceed with the next numerically available option, which would be 2. The suggested mnemonic system could see other versions being allocated based on characteristics or functions they represent, such as "z" for compressed or zipped outputs and "y" for yield outputs.

The rationale behind this proposal is to enhance user understanding and safety. As the cryptocurrency space evolves, with certain output types being retired, restricted, or becoming insecure due to cryptographic vulnerabilities, it becomes increasingly important for users to easily recognize and understand the types of transactions they are conducting. While digital wallet software may alert users to dangerous output types, not all wallets may incorporate such features, and users relying on paper wallets would lack this layer of protection entirely. This mnemonic system is analogous to the existing practice of using "bc" and "tc" prefixes for mainnet and testnet addresses, respectively, furthering the initiative for clarity and security within the Bitcoin ecosystem.