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

The discourse surrounding the implementation and potential uses of CheckTemplateVerify (CTV) and related technologies like CSFS (Covenants Script Fragment Selection), CAT, and TXHASH offers an in-depth analysis of their implications for Bitcoin's network and development. The comparison between CTV+CSFS and SIGHASH_ANYPREVOUT (APO) reveals that while they aim to enable functionalities similar to Lightning Symmetry (formerly Eltoo), the technical requirements and outcomes differ significantly. CTV+CSFS, as opposed to APO, demands the explicit inclusion of the CTV hash in the witness data, making it more costly and less efficient. However, the proposed TXHASH approach presents a potentially better solution by being taproot-only and simplifying changes without requiring precalculated segwit-related hashes for non-segwit transactions, thus avoiding possible slowdowns during Initial Block Download (IBD) periods.

There is also skepticism regarding the practicability and prioritization of eltoo/ln-symmetry within the lightning space, despite its theoretical benefits. The lack of successful replication of Greg Maxwell's results on ln-symmetry and the heavy reliance on APO, the annex, and custom relay rules call into question the viability and immediate applicability of these technologies in their current form. Moreover, the discussion extends to the utility of covenants and how they might be misinterpreted or misused within the community, highlighting a general hesitancy towards their integration despite their potential to enable a variety of second-layer protocols.

On the other hand, the use of CAT and CSFS in conjunction is seen as a promising avenue for simplifying protocols involving Discreet Log Contracts (DLCs) and reducing script sizes in applications like BitVM, suggesting a broader scope for improvement and optimization in Bitcoin's scripting capabilities. Additionally, the limited implementation of vaults using only CTV points to a need for more comprehensive solutions that address both spending and storage considerations in a nuanced manner.

Further critique is directed at the lack of implementations and practical experimentation with proposed upgrades like CTV and CSFS. Drawing parallels with the deployment of taproot, the text argues for a more cautious and thorough testing process to uncover issues that might not be evident through theoretical examination alone. The importance of tangible demonstrations of utility and robustness before widespread adoption is emphasized, alongside a call for revising the motivation and rationale behind proposals like BIP 119 (CTV) to foster a more productive and informed discussion about future protocol upgrades.

In conclusion, while there is clear recognition of the potential benefits that CTV, CSFS, CAT, and TXHASH could bring to the Bitcoin ecosystem, the discourse underscores the necessity for careful consideration, extensive testing, and community consensus prior to their implementation. The exploration of these technologies highlights ongoing debates within the developer community regarding the best paths forward for enhancing Bitcoin's functionality while maintaining its security and decentralization principles.