BIP 322 use case

BIP 322 use case

Original Postby Ali Sherief

Posted on: May 5, 2024 12:09 UTC

The dialogue between Luke Dashjr and ProfEduStream brings to light the complexities and challenges surrounding BIP322, particularly in its application to proof-of-sender and the signing of messages with a multi-signature wallet.

Luke Dashjr delves into the intricacies of BIP322, noting its primary focus on establishing a method for collecting an authentic Unspent Transaction Output (UTXO) set for a given list of addresses and the creation of signed messages. Despite some progress, only the latter has been effectively addressed. The suggestion for an RPC to retrieve the UTXO set directly in Core is posited as a potential solution to make BIP322 more viable. Furthermore, the concept of splitting BIP322 into two parts is introduced: one for unofficial use as it currently stands, and another for the actual authentication/contract mechanism, leveraging the Partially Signed Bitcoin Transactions (PSBTs) framework already present in Core.

Moreover, the communication touches upon the misuse of signed messages for Know Your Customer (KYC) purposes, which is seen as a significant deterrent to further development of BIP322. The emphasis is placed on the limited interest in its intended use case, which is to facilitate agreement to a contract before funds are transferred, and the secondary use case of using Bitcoin addresses as login mechanisms. Despite these hurdles, BIP322 has seen adoption in some wallets, indicating a level of demand for the functionalities it aims to provide.

ProfEduStream's message highlights the practical implications of the current limitations of BIP322 from the perspective of a Bitcoin association. The inability to sign messages with a multi-signature wallet poses operational challenges, especially in contexts where such signatures are legally required or preferred for proving ownership of a Bitcoin address. This limitation affects applications like "Swiss Bitcoin Pay" and Peach, which rely on this feature for user onboarding and merchant management. The necessity of BIP322's advancement is underscored by the need to decentralize treasury operations among companies opting for multi-signature wallets. Both correspondences underline the urgent requirement for improvements within the Bitcoin ecosystem to address these deficiencies and enable broader functionality and security through the implementation of BIP322 or subsequent proposals.