Efficient Multi-Input Transaction Grinding for OP_CAT-based Bitcoin Covenants

By adopting a specialized technique for key selection, this method addresses the inherent limitations of Bitcoin Script's OP_ADD operation, which struggles with directly incrementing a 256-bit integer. This integer is crucial as it represents the SHA256 hash of transaction data. The conventional workaround, which involves dividing the hash into two segments and incrementally adjusting the least significant byte, mimics a proof-of-work system but faces efficiency challenges, especially in transactions with multiple inputs. The process, known as "transaction grinding," becomes increasingly time-consuming as the number of inputs grows, due to the limited range of adjustable fields like nLocktime.

To mitigate these issues, a novel solution extends the range of acceptable values for the least significant byte. This expansion significantly reduces the effort required for hash modification across transactions with varying numbers of inputs by allowing for a broader spectrum of adjustments. Further improvements are made by increasing the range of the least significant byte, excluding only values that could lead to underflows or overflows. Additionally, this approach introduces a signed magnitude representation for integers within Bitcoin Script, enabling the incrementation of negative integers more effectively.

This innovative method not only alleviates the computational demands of transaction grinding but also demonstrates its potential through sCrypt code examples. These examples illustrate the practical application and effectiveness of the proposed changes in enhancing Bitcoin covenants. For a more detailed understanding of the technical implementations and their implications, interested parties are encouraged to review the documentation available in the Github commit. This commit offers an in-depth look at the advancements made in this area, highlighting the potential benefits for the broader Bitcoin network.