The unsuitability of presigned transactions for vaults

The discussion revolves around the comparison of vault designs in cryptocurrency management, specifically focusing on presigned vaults versus a proposed superior design. The key points address various aspects of these systems, including security concerns, user experience, and operational challenges.

One significant concern with presigned vaults is their reliance on ephemeral keys for securing transactions. These temporary keys must be securely generated and destroyed after use, a process that poses substantial security risks and operational difficulties. The comparison between ephemeral keys and nonces highlights a broader issue with cryptographic security in this context, suggesting that neither ECDSA nor schnorr signatures may offer adequate protection if keys are mishandled or leaked.

Address reuse emerges as another critical problem for presigned vaults. Due to the pregeneration of transaction graphs, any coins sent to an already used vault address are effectively lost. This necessitates a careful handling of vault addresses, preventing their public sharing and complicating the deposit process. The suggestion to include a tapleaf for recovery by a secure key offers a potential solution, yet it doesn't fully mitigate the inherent risks of address reuse and the operational complexities it introduces.

The management of Unspent Transaction Outputs (UTXOs) and transaction fees in presigned vaults presents additional challenges. Creating a vault requires generating ephemeral keys each time, complicating coin consolidation efforts. Fee management is also problematic due to the need for upfront determination and the reliance on inefficient strategies for fee adjustment. Suggestions for improvements include utilizing sighash flags and deploying ephemeral anchors to alleviate some of these issues.

Finally, the requirement for indefinite data storage for presigned transaction vaults raises concerns about data security and efficiency. This "toxic" data, akin to revoked states in Lightning Network nodes, must be securely stored indefinitely, posing a risk of financial loss if compromised. Moreover, the inefficiency of chain use due to the inability to batch withdrawals or recoveries is noted as a significant drawback, leading to increased operational costs.

In summary, while presigned vaults offer certain benefits, they are hampered by several critical issues, including security vulnerabilities, operational complexities, and inefficiencies. These challenges underscore the need for further optimization and development to make vault-based cryptocurrency management more secure, user-friendly, and efficient.