CTV+CSFS: Can we reach consensus on a first step towards covenants?

The discourse centers around the integration of Discreet Log Contracts (DLCs) and their relevance to Bitcoin protocol enhancements, specifically in relation to a potential CheckTemplateVerify (CTV) soft fork. The primary standpoint suggests that Bitcoin end users typically interact with applications developed atop the Bitcoin protocol rather than the protocol itself. Consequently, the discussion emphasizes that advancements like DLCs should primarily focus on benefits they bring to application developers, which in turn could enrich the user experience.

A critical view is presented on the narrative that solely highlights either successful or unsuccessful endeavors in leveraging DLCs for building applications, recognizing that such one-sided perspectives can be misleading. Although some companies have failed in their attempts to innovate with DLCs, others have secured significant funding, indicating a mixed reception from the market. This revelation underlines the necessity of assessing DLCs based on their potential to foster applications that resonate with Bitcoin users.

The conversation also touches upon BitVM, a project described as nascent yet gaining traction among developers. Despite its complexity and early stage, BitVM has attracted interest and investment, signaling a budding ecosystem of implementations. However, the dialogue raises concerns about justifying soft forks within the Bitcoin network, arguing that speculative applications of emerging protocols alone should not drive consensus changes. Instead, there should be a clear demonstration of user demand for the new functionalities these forks would enable.

Funding emerges as a double-edged sword in this context; while it serves as an indicator of market interest and confidence, it cannot be the sole consideration in decision-making about Bitcoin's consensus rules. The overarching sentiment advocates for a balanced approach that weighs developer expressiveness against tangible benefits for the end-user community.

In essence, the discussion encapsulates the complexities surrounding Bitcoin protocol development, highlighting the need for a careful balance between innovation and practical utility. The debate underscores the importance of grounding protocol enhancements in real-world use cases and user demand, rather than speculative potential alone. Furthermore, the reference to a "power user exploration phase" as part of the fork proposal process suggests a pragmatic pathway to evaluating new features, emphasizing the value of conceptual exploration ahead of full-scale implementation.