That is the primary article in a collection deep diving into particular person covenant proposals which have reached some extent of maturity meriting an in depth breakdown.
CHECKTEMPLATEVERIFY (CTV), put ahead by Jeremy Rubin with BIP 119, is essentially the most mature and absolutely fleshed out covenant proposal, not solely out of the proposals we will probably be protecting, however out of all the covenant proposals of their entirety. As I discussed within the introduction article to this collection, there are lots of considerations within the ecosystem relating to covenants which can be too versatile enabling issues that wind up having very detrimental penalties for Bitcoin.
CTV was designed particularly to constrain its capabilities tightly sufficient to keep away from any of these considerations. To first perceive how CTV capabilities, we have to perceive the person elements of a Bitcoin transaction.
It is a very excessive degree view of a Bitcoin transaction. It has inputs, or unspent cash (UTXOs), and outputs, the brand new unspent cash that the transaction will create when it’s confirmed in a block. There are much more items we are going to undergo, however that is the very best degree view of a transaction’s construction.
Each transaction additionally has a model quantity discipline for the entire transaction, indicating applicability of latest variations of guidelines or options. There may be additionally the marker and the flag, that are set to particular values to point the transaction makes use of Segwit. After that is the enter rely, the variety of inputs within the transaction. Then come the precise inputs.
Every enter comprises a TXID of the transaction that created the unspent coin being spent, a VOUT which marks what output in that transaction is being spent, the dimensions of the ScriptSig, and the ScriptSig, which is the unlocking script proving the enter being spent is permitted by its locking script guidelines, and at last a Sequence quantity which is used to make sure the enter being spent is following relative timelock guidelines. i.e. the enter has existed for a sure variety of blocks or size of time since its creation.
The output rely is the subsequent piece of information, the variety of outputs within the transaction. After this comes the precise outputs, which include an quantity of satoshis assigned to that output, the ScriptPubKey measurement, and the precise ScriptPubKey, which is the locking script for that output. Lastly the nLocktime discipline applies a timelock worth in timestamp or block top that applies to the complete transaction.
Every Segwit transaction additionally comprises a Witness part, the place every enter has a corresponding witness containing a Stack Objects rely, what number of issues will probably be placed on the script stack, a Dimension discipline for every merchandise, and the precise knowledge Merchandise to go on the stack.
How CTV Works
CTV is an opcode that allows essentially the most primary type of introspection and ahead knowledge finishing up of all of the covenant proposals. It permits a script to take a pre-defined 32 byte hash and evaluate that towards a hash of a lot of the fields of the spending transaction. If the hash derived from the precise spending transaction doesn’t match the pre-defined hash, the transaction is invalid.
The fields it commits to are:
nVersion nLocktime Enter rely A hash of all of the nSequence fields Output rely A hash of all of the outputs Enter index (the place the enter has within the transaction, 1st enter, 2nd, and so forth.)
These are all of the fields dedicated to by the CTV hash, of their entirety, and with no potential to select and select. That is the diploma of introspection CTV permits, “does the hash of those fields within the spending transaction match the hash within the locking script of the enter being spent,” that’s it. The hash commits to basically the complete transaction besides the precise inputs. There’s a purpose the hash doesn’t embody the inputs. With a purpose to lock an output to a 32 byte hash with CTV, you want to know the hash of the transaction that you’re guaranteeing is the one approach for it to be spent. The enter locked with CTV being spent should embody this hash with the intention to be verified towards CTV. That necessitates having the hash of that transaction earlier than you create the entire transaction. That isn’t doable.
You too can nest CTV scripts, i.e. have an preliminary CTV script decide to a transaction with outputs that additionally embody CTV scripts. That is what permits CTV to “carry ahead” knowledge. All it carries ahead in follow although is no matter knowledge is contained within the chain of transactions. You are able to do this in idea to an infinite depth, however you might be restricted in follow to a finite depth as a result of the nesting have to be generated backwards ranging from the top. It is because every degree, or “hop,” should have the hash of the transaction transferring to the subsequent one, in any other case you’ll be able to’t create the locking script within the first place. In case you don’t already know the subsequent transaction, you’ll be able to’t generate the earlier one.
What Is CTV Helpful For
CTV lets you prohibit an output in order that it may possibly solely be spent, in response to consensus guidelines, by an actual pre-defined transaction. A few of you could be asking what the massive deal is, we will already pre-sign transactions. If the extent of introspection is so restricted that it may possibly solely accomplish one thing we will already do exactly pre-signing, what’s the worth add?
First, pre-signed transactions all the time depart open the potential for the keyholder(s) signing new transactions and spending these cash otherwise. It’s a must to belief that the keyholder is not going to do that, or will delete the important thing wanted to signal with (which you additionally must belief them on). CTV removes that belief fully. As soon as the spending transaction is outlined and the output locked to that CTV hash is created, there is no such thing as a chance of being spent one other approach, enforced by consensus.
At present the one approach round that belief is to be concerned in pre-signing transactions your self utilizing multisig. Then you definitely might be utterly sure that except you select to signal one your self, no different legitimate transaction spending a coin otherwise might be created. The issue is the extra persons are concerned, the harder and unreliable coordinating everybody to pre-sign a transaction on the similar time turns into. Previous small sizes it turns into a completely impractical drawback to resolve reliably.
CTV provides a approach for folks to know a set of transactions is dedicated with out everybody having to get on-line on the similar time to signal them. It vastly simplifies the coordination course of by permitting everybody to get the wanted data to anybody else each time they will, and as soon as that particular person has everybody’s data they will create the chain of CTV transactions with out anybody else’s involvement, and everybody can confirm and make sure that the proper final result is the one doable one.
That’s extremely invaluable by itself, however CTV may allow much more invaluable issues together with different opcodes, which we’ll see within the subsequent article.
Closing Ideas
CTV is a tightly restricted covenant that allows a level of introspection and ahead knowledge carrying that’s so restricted it doesn’t exceed the precise performance of something that may be finished with pre-signed transactions. The worth proposition is just not in enabling new performance in its personal proper, however drastically enhancing the effectivity, scalability, and safety ensures of what might be constructed at present utilizing pre-signed transactions. This alone is a large profit to virtually each at present deployed protocol utilizing pre-signed transactions.
Listed below are a number of the initiatives demonstrating how completely fleshed out and explored this explicit covenant is in comparison with the others:
A primary cost pool instance by stutxo. A CTV vault implementation by James O’Beirne, who went on to suggest OP_VAULT (which nonetheless makes use of CTV). A proof-of-concept port of the pre-signed transaction primarily based Ark implementation from Second by Steven Roose to make use of CTV as a substitute. The Sapio Language by Jeremy Rubin himself, the next degree language for constructing contracts with CTV (additionally supporting using pre-signed transactions as a substitute). Timeout Timber, a proposal for a really primary coinpool design by John Legislation. Quite a few different doable protocols, comparable to optimized Discreet Log Contracts (DLCs), non-interactive Lightning channels one social gathering may open with out the opposite, and even decentralized methods for miners to pool collectively.
CTV is an extremely mature proposal at this level, with a excessive worth add, and no threat of enabling something driving the considerations round covenants. This could not solely be very severely thought of, however in my private opinion ought to have been activated years in the past.
