That is the primary article in a sequence deep diving into particular person covenant proposals which have reached a degree 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 might be overlaying, however out of the entire covenant proposals of their entirety. As I discussed within the introduction article to this sequence, there are lots of considerations within the ecosystem concerning covenants which might 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 features, we have to perceive the person elements of a Bitcoin transaction.
This can be 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’ll undergo, however that is the best degree view of a transaction’s construction.
Each transaction additionally has a model quantity area for the entire transaction, indicating applicability of latest variations of guidelines or options. There’s 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 depend, the variety of inputs within the transaction. Then come the precise inputs.
Every enter accommodates 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 allowed 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 depend is the following 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 dimension, and the precise ScriptPubKey, which is the locking script for that output. Lastly the nLocktime area applies a timelock worth in timestamp or block top that applies to your complete transaction.
Every Segwit transaction additionally accommodates a Witness part, the place every enter has a corresponding witness containing a Stack Gadgets depend, what number of issues might be placed on the script stack, a Measurement area for every merchandise, and the precise knowledge Merchandise to go on the stack.
How CTV Works
CTV is an opcode that permits essentially the most fundamental 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 examine 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 depend A hash of all of the nSequence fields Output depend A hash of all of the outputs Enter index (the place the enter has within the transaction, 1st enter, 2nd, and so on.)
These are all of the fields dedicated to by the CTV hash, of their entirety, and with no capacity 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 primarily your complete transaction besides the precise inputs. There’s a motive the hash doesn’t embody the inputs. With the intention to lock an output to a 32 byte hash with CTV, you must know the hash of the transaction that you’re guaranteeing is the one method for it to be spent. The enter locked with CTV being spent must embody this hash with a view to be verified towards CTV. That necessitates having the hash of that transaction earlier than you create the entire transaction. That’s not attainable.
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 apply although is no matter knowledge is contained within the chain of transactions. You are able to do this in concept to an infinite depth, however you might be restricted in apply 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 following one, in any other case you may’t create the locking script within the first place. Should you don’t already know the following transaction, you may’t generate the earlier one.
What Is CTV Helpful For
CTV lets you prohibit an output in order that it might probably solely be spent, based on consensus guidelines, by a precise pre-defined transaction. A few of you could be asking what the large deal is, we will already pre-sign transactions. If the extent of introspection is so restricted that it might probably 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 opportunity of the keyholder(s) signing new transactions and spending these cash another way. It’s important to belief that the keyholder won’t do that, or will delete the important thing wanted to signal with (which you additionally should 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 risk of being spent one other method, enforced by consensus.
Presently the one method round that belief is to be concerned in pre-signing transactions your self utilizing multisig. Then you definitely could be utterly sure that except you select to signal one your self, no different legitimate transaction spending a coin another way could be created. The issue is the extra persons are concerned, the harder and unreliable coordinating everybody to pre-sign a transaction on the identical time turns into. Previous small sizes it turns into a completely impractical drawback to unravel reliably.
CTV provides a method for individuals to know a set of transactions is dedicated with out everybody having to get on-line on the identical time to signal them. It vastly simplifies the coordination course of by permitting everybody to get the wanted info to anybody else at any time when they will, and as soon as that individual has everybody’s info they will create the chain of CTV transactions with out anybody else’s involvement, and everybody can confirm and be sure that the proper final result is the one attainable one.
That’s extremely worthwhile by itself, however CTV may also allow much more worthwhile issues together with different opcodes, which we’ll see within the subsequent article.
Closing Ideas
CTV is a tightly restricted covenant that permits a level of introspection and ahead knowledge carrying that’s so restricted it doesn’t exceed the precise performance of something that may be carried out with pre-signed transactions. The worth proposition shouldn’t be in enabling new performance in its personal proper, however drastically bettering the effectivity, scalability, and safety ensures of what could be constructed presently utilizing pre-signed transactions. This alone is an enormous profit to virtually each presently deployed protocol utilizing pre-signed transactions.
Listed below are among the initiatives demonstrating how totally fleshed out and explored this explicit covenant is in comparison with the others:
A fundamental 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 an alternative. The Sapio Language by Jeremy Rubin himself, a better degree language for constructing contracts with CTV (additionally supporting using pre-signed transactions as an alternative). Timeout Timber, a proposal for a really fundamental coinpool design by John Regulation. Quite a few different attainable protocols, akin to optimized Discreet Log Contracts (DLCs), non-interactive Lightning channels one social gathering might 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 danger of enabling something driving the considerations round covenants. This could not solely be very significantly thought-about, however in my private opinion ought to have been activated years in the past.
