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

The discussion on the practicality and implementation of vaults in Bitcoin's security and management landscape has drawn varied opinions from several industry leaders. The CEO of a prominent hardware wallet expressed support for implementing vaults, despite concerns about their practicality based on existing proposals such as OP_VAULT. Similarly, the head of the only custodial insurance product for Bitcoin also showed interest in vaults, although his reference did not explicitly mention OP_CTV. AnchorWatch, a company with a short operational history, was mentioned favorably, but its newness was noted.

Bob McElrath, from Fidelity Digital Assets, a leading custodian, shared insights from years of research indicating that vaults might not be as beneficial as theorized. This sentiment was echoed by the CEO of Nunchuk, a Bitcoin wallet provider since 2021, who believed vaults were impractical for everyday users. Likewise, the experience of Wizardsardine’s CEO, who spent years developing vaults and custody products, suggested that managing a vault imposes burdens that most people prefer to avoid. The skepticism towards vaults stemmed from the extensive infrastructure required, such as watchtowers, which complicates their use for the average user.

These discussions highlight a broader skepticism towards the current vault-related proposals and the challenges they present in real-world applications. However, the conversation shifts focus to the potential applications of combining OP_CTV and OP_CSFS. These combinations could offer significant benefits, such as enabling Lightning Network (LN) symmetry for developers, simplifying the upgrade path to Point Time Locked Contracts (PTLCs) for the Lightning Network, enhancing certain improvements within Ark, reducing interactivity in various protocols and applications, and potentially aiding UTxO management for Liquid watchmen and custodial sidechains in general. This pivot suggests a move towards exploring how these technical advancements can address some of the limitations currently associated with vaults and other Bitcoin transaction structures.