The unsuitability of presigned transactions for vaults

A notable discussion revolves around the implementation of vault-like constructions, such as Revault, Liana, and Bryan Bishop's prototype, which aim to mitigate these risks. The concept of OP_VAULT emerges as a potential improvement over traditional methods by simplifying key management and introducing emergency paths for compromised transactions, an enhancement over the need to securely delete keys after signing with current protocols.

The debate extends into the practicality of ephemeral keys versus nonces in transaction signing, revealing a divergence in their application due to hardware limitations. This leads to the suggestion that incorporating tapleaf recovery options in presigned vault transactions could address some of the operational challenges faced, though this is yet unadopted in open-source software. Furthermore, the comparison between presigned and OP_VAULT transactions uncovers potential efficiencies in security and operation, highlighting the cumbersome nature of managing multiple UTXOs and transactions in presigned schemes.

Address reuse and the management of Unspent Transaction Outputs (UTXOs) present critical problems in presigned vault designs, pointing towards the inherent risks and operational complexities introduced. Additionally, the necessity for indefinite storage of "toxic" data poses significant security concerns, underscoring inefficiencies in chain usage and the broader implications for users' financial safety.

Conversations within the community, including those found on delvingbitcoin.org, critique the usability and practical adoption challenges of presigned transaction vaults. These discussions underline the technical sophistication required and the security vulnerabilities introduced through the generation of ephemeral keys. The exploration of alternatives like OP_VAULT and CheckTemplateVerify (CTV) hints at a continuous search for more viable solutions in cryptocurrency custody, aiming to address the noted limitations of presigned transactions and improve the overall security infrastructure of digital assets.

In conclusion, while the theoretical framework for using presigned transactions for vaults offers an innovative approach to securing cryptocurrency assets, its real-world application encounters significant obstacles. These range from user experience issues to technical challenges, limiting its utility and necessitating the exploration of alternatives like CTV and OP_VAULT. The ongoing dialogue within the cryptocurrency community is crucial in navigating these complexities, driving toward solutions that balance security needs with practical usability.