On the possibility of evil covenants and implications for soft fork proposals

In a thought-provoking discourse, the potential for introducing "perpetual KYC contracts" within Bitcoin's framework is examined through the lens of proposed soft fork additions such as OP_CTV, OP_CSFS, OP_CAT, and OP_EXPIRE. This exploration raises a fundamental philosophical debate on whether proposals that could enable restrictive covenants—termed "evil covenants"—should be categorically dismissed. The argument pivots on the premise that outright rejection of these proposals might overlook their broader implications and utility in enhancing or securing the Bitcoin ecosystem.

The author argues against the blanket dismissal of soft fork proposals based on their potential to facilitate evil covenants, pointing out two main reasons. Firstly, the practicality of alternatives that oppressive regimes could adopt is highlighted. Should Bitcoin lack the capability to enforce KYC through covenants, it's conceivable that tyrants would resort to other methods to control cryptocurrency use. Examples include schemes like a Perpetual One-Way Peg (P1WP), co-signer arrangements (e.g., AMP), custodian requirements, or mandating self-custody with stringent transaction rules, all aimed at ensuring compliance with authoritarian mandates.

On the flip side, the discussion also embraces the positive aspects of covenant capabilities, emphasizing their potential to make Bitcoin more private, fungible, scalable, and ultimately a better instrument for freedom. Drawing parallels with the dual-use nature of technologies like firearms and the internet—which can serve both oppressive and liberatory purposes—the narrative suggests that Bitcoin, with or without covenants, harbors similar dual potentials. The emphasis is placed on the responsibility of individuals and organizations in using these tools ethically and the importance of robust judicial systems to counter misuse and ensure justice.

Thus, the dialogue concludes on a reflective note, championing the pursuit of technological advancement within Bitcoin while advocating for a balanced approach that weighs the good against the bad, urging the community to focus on harnessing the positive capabilities of covenants for the greater good of ensuring financial freedom and integrity.