Standardizing an exposure classification for existing outputs (pre-BIP)

The discussion about the revision of BIP 360 emphasizes the need for accurate terminology and citations in drafting such documents. It is highlighted that terms like EXPOSED_AT_REST and EXPOSED_ON_SPEND should be clearly defined to match their descriptions in BIP 360. The former term refers to vulnerabilities associated with long-term exposure, while the latter pertains only to risks present during short-term exposure activities, such as spending.

There was an error identified in the draft concerning the classification of P2MR (Pay-to-Merkle-Root). Initially, it was incorrectly categorized as NOT_EXPOSED. However, upon review, it became evident that P2MR should be classified as EXPOSED_ON_SPEND because the process of spending exposes the leaf key, script, and Merkle path in the mempool, which is analogous to the exposure risk in Pay-to-Witness-Script-Hash (P2WSH) transactions until advancements like post-quantum cryptographic methods are implemented.

Moreover, the draft adds significant operational details to what BIP 360 outlines under its footnote regarding when a script reveals a public key. These additions include specifications on what constitutes being revealed, such as actions taken per script across every Unspent Transaction Output (UTXO) paying into it, conditions specific to multi-signature setups, and complete spend recipes for script trees. Also included are guidelines on how to report when transaction history is truncated and the tools that can verify these conditions. The revised document will be submitted for consideration as Informational content to aid further in the understanding and application of these protocols.