CTV + CSFS: a letter

In the ongoing discussions within the Bitcoin development community, a critique was raised regarding BIP-300's complexity, arguing for simpler alternatives that have been theoretically possible since 2009. These simpler solutions can be implemented using raw Script, enhancing their portability across various altcoins that share Bitcoin's source code and among different address types, with the exception of TapScript due to its incompatibility with OP_SIZE when applied to DER signatures. The conversation included references to example implementations demonstrated through testnet transactions and addresses, showcasing the practicality of these ideas.

The proposed method utilizes a scripting condition where the coin sender dictates the difficulty level for a transaction output by setting a size requirement. This approach introduces a Proof of Work (PoW) concept directly into transaction outputs, where the difficulty can be adjusted by changing the required size, thereby affecting how many hashes need to be grinded. Specifically, requiring a size less than 60 means the coin can be moved after approximately 256 hash attempts, and increasing the difficulty further is possible by decreasing this size value, down to a minimum that still allows for a valid 9-byte signature.

This technique suggests that it’s feasible to lock output Scripts with PoW without any consensus changes, sidestepping the complexities and requirements for soft forks. The only noted necessity for further development is in the area of Merged Mining, due to the distinct hashing methodologies between transactions and block headers. The discourse implies that deploying such mechanisms could pave the way for the realization of decentralized sidechains atop existing blockchain networks, encouraging practical experimentation and observation of their utility in real-world applications.