Perpetually KYC'd Coins Using Evil Covenants

Perpetually KYC'd Coins Using Evil Covenants

Original Postby juangalt

Posted on: February 13, 2024 20:15 UTC

The discourse revolves around the comparative analysis of covenant KYC (Know Your Customer) pools and multisig (multiple signature) KYC pools within the realm of Bitcoin and related technologies.

The analysis begins by acknowledging a potential advantage of covenant KYC pools for government institutions, highlighting their efficiency derived possibly from the structured nature of these covenants. This efficiency is juxtaposed against the backdrop of existing capabilities provided by standard enterprise Bitcoin software, hardware, and best practices, suggesting that while covenants may offer an advantage, the foundational framework for such governance already exists.

A pivotal aspect of this discussion centers on the transparency and verifiability of the terms governing these covenants. It posits that if the terms of a covenant can be publicly verified, then the covenant itself is inherently constrained by its structure and rules. This public accountability ensures that any amendments to the covenant's terms are made visible to the public, fostering a layer of transparency absent in multisig KYC pools. Multisig arrangements, by contrast, are characterized by their flexibility, with terms and rules that can be arbitrarily adjusted by the key holders without public oversight or disclosure.

Drawing from these observations, the writer expresses a preference for covenant KYC pools over their multisig counterparts. This preference is rooted in the belief that the structured, rule-bound, and transparent nature of covenant arrangements offers a more reliable and accountable framework for managing KYC protocols within the context of Bitcoin transactions and governance.