Combined summary - Covenant tools softfork

Combined summary - Covenant tools softfork

The growing complexity of Bitcoin's governance is illustrated by the increasing politicization of protocol changes, as the community expands and the need for consensus becomes more intricate.

The diversity of stakeholders in the Bitcoin network now requires that protocol modifications offer wide-ranging benefits to gain substantial support. In light of these challenges, the concept of omnibus soft forks has been proposed. These omnibus soft forks bundle multiple features or improvements together, which may lead to a higher likelihood of achieving the necessary agreement among the diverse interests within the Bitcoin community. This strategy aims to satisfy a broader range of users, which could facilitate the implementation of changes within the decentralized ecosystem.

A soft fork deployment has been suggested that would activate several consensus changes, including BIP-118 (SIGHASH_ANYPREVOUT for Taproot Scripts), BIP-119 (CHECKTEMPLATEVERIFY), and BIP-345 (OP_VAULT). These updates aim to enable a variety of broadly beneficial use cases for Bitcoin users, such as enhanced security through reactive custodial solutions known as vaults, LN-Symmetry for improved Lightning Network operations, Discreet Log Contracts (DLCs) for more efficient implementations, non-interactive channel openings, congestion control mechanisms, decentralized mining pools, numerous Lightning efficiency enhancements, and expansive channel factories. Furthermore, speculative scaling solutions like Ark and Spacechains require the functionality provided by these proposed changes to lock coins into specific outputs without further authorization.

The patches for BIP-118 and BIP-119 have been stable and thoroughly reviewed for some time. Although BIP-345 (OP_VAULT) is newer, it has been included in this proposal due to its potential immediate usability, particularly for creating secure vaults which are in high demand among both industrial and individual users. An example of wallet implementation for BIP-345 already exists, suggesting readiness for adoption. The consensus change implementation, including tests, comprises roughly 7,000 lines of code, which is relatively modest compared to previous soft forks. This limited scope provides confidence in proposing the new but scrutinized code for BIP-345. The suggested activation mechanism follows a modified version of BIP-9 as described in BIP-341, although the specific signaling period remains undetermined pending further consensus indicators. The proposal seeks feedback on these points and will be submitted as a draft PR to the Core repository for further discussion.

Discussion History

jamesobOriginal Post
September 28, 2023 18:38 UTC
December 30, 2023 18:02 UTC