BIP 322 use case

BIP 322 use case

Original Postby Luke Dashjr

Posted on: May 4, 2024 00:11 UTC

The discussion around the use of signed messages for Know Your Customer (KYC) processes highlights a significant divergence from its intended applications, contributing to the stagnation in the development of BIP322.

The suggestion is made that for entities requiring confirmation of ownership over withdrawal addresses, a more traditional method such as a checkbox for user affirmation should be considered. This approach contrasts sharply with the demand for cryptographic proof, which seems disproportionate compared to the attestation methods accepted within traditional finance.

Furthermore, the core envisioned utility of BIP322, facilitating agreement on contracts prior to the transfer of funds, has not garnered significant interest. Despite this, there has been some adoption for secondary purposes like using Bitcoin addresses for login mechanisms, as seen with platforms like Bitcoin-OTC and OCEAN. However, the demand for capabilities such as proof-of-funds and proof-of-sender, which BIP322 began to address, reveals the complexity and challenges inherent in these requirements. These aspects have proven to be more intricate than initially perceived, prompting a reconsideration of their implementation.

Despite these challenges, BIP322 has seen adoption by some wallets, indicating a level of utility and acceptance even in its incomplete state. The ongoing dialogue suggests that further development or the introduction of new proposals (BIPs) would be necessary to fully realize the potential of these features, underscoring the dynamic and evolving nature of cryptocurrency protocols and their applications.