Question about OP_CTV and Non-Recursive Covenants

The discussion delves into the potential of utilizing Bitcoin for the issuance of stocks and other securities, highlighting a unique perspective that contrasts with current dominant views. The primary argument in favor of this approach is focused on the advantages it would offer to public companies like Microstrategy / Strategy that aim to raise capital directly from bitcoin holders. This method would allow these entities to bypass traditional financial intermediaries and processes, which are often seen as cumbersome and risky by bitcoin holders who prefer not to move their assets to exchanges or deal with fiat currencies and KYC requirements. The proposition suggests that issuing stocks natively on Bitcoin could facilitate a direct secondary market between bitcoin and company stock, enabling straightforward transactions for raising capital, share buybacks, and dividend issuance without the need for intermediaries.

Moreover, the conversation transitions to a technical problem related to creating efficient and scalable buy offers for runes (a type of digital asset) on Bitcoin. The current method, which involves creating a Partially Signed Bitcoin Transaction (PSBT) with a signature hash option that commits to the entire transaction for a single Unspent Transaction Output (UTXO), is deemed impractical for large-scale operations due to the necessity of generating a vast number of signatures. An alternative approach is considered, where a bidder would commit to multiple transaction templates with a single signature, allowing sellers of specific runes to complete the transaction on their behalf. This would involve a complex process of creating a base transaction that commits to a Pay-to-Taproot (P2TR) output with unique script spend paths for each UTXO being bid on, without including signatures in the script spend path. However, challenges remain with this approach, notably the inability to commit to the spent outpoint in a way that is compatible with current Bitcoin transaction standards, such as CheckTemplateVerify (CTV).

This exploration underscores the innovative possibilities and technical hurdles associated with expanding Bitcoin's utility beyond its current applications. While the concept of issuing securities directly on Bitcoin presents a compelling case for simplifying and securing capital-raising activities for companies, the execution of such ideas faces significant technical challenges, particularly when trying to scale these solutions to meet broader market needs. The dialogue exemplifies the ongoing efforts within the cryptocurrency community to tackle these issues, aiming to enhance Bitcoin’s functionality and appeal to a wider array of financial activities.