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 will likely be overlaying, however out of the entire covenant proposals of their entirety. As I discussed within the introduction article to this sequence, there are a lot of issues within the ecosystem relating to 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 issues. To first perceive how CTV capabilities, we have to perceive the person elements of a Bitcoin transaction.
This can be a very excessive stage 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 stage view of a transaction’s construction.
Each transaction additionally has a model quantity subject for the entire transaction, indicating applicability of recent 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 rely, 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 rely is the following piece of knowledge, 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 subject applies a timelock worth in timestamp or block top that applies to the whole transaction.
Every Segwit transaction additionally accommodates a Witness part, the place every enter has a corresponding witness containing a Stack Gadgets rely, what number of issues will likely be placed on the script stack, a Dimension subject for every merchandise, and the precise information Merchandise to go on the stack.
How CTV Works
CTV is an opcode that permits essentially the most fundamental type of introspection and ahead information finishing up of all of the covenant proposals. It permits a script to take a pre-defined 32 byte hash and evaluate that in opposition to 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 capacity to choose and select. That is the diploma of introspection CTV allows, “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 the whole transaction besides the precise inputs. There’s a purpose the hash doesn’t embody the inputs. So as to lock an output to a 32 byte hash with CTV, it’s essential 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 a view to be verified in opposition to CTV. That necessitates having the hash of that transaction earlier than you create the entire transaction. That’s not attainable.
You may also 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” information. All it carries ahead in follow although is no matter information is contained within the chain of transactions. You are able to do this in idea to an infinite depth, however you’re restricted in follow to a finite depth as a result of the nesting have to be generated backwards ranging from the top. It’s because every stage, 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. If you happen to don’t already know the following transaction, you may’t generate the earlier one.
What Is CTV Helpful For
CTV lets you limit an output in order that it may solely be spent, in keeping with consensus guidelines, by an actual pre-defined transaction. A few of you could be asking what the massive deal is, we are able to already pre-sign transactions. If the extent of introspection is so restricted that it may solely accomplish one thing we are able to already just do pre-signing, what’s the worth add?
First, pre-signed transactions at all times go away open the opportunity of the keyholder(s) signing new transactions and spending these cash differently. You must belief that the keyholder won’t do that, or will delete the important thing wanted to signal with (which you additionally need to 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 isn’t any chance of being spent one other approach, enforced by consensus.
At the moment the one approach round that belief is to be concerned in pre-signing transactions your self utilizing multisig. You then might be utterly sure that except you select to signal one your self, no different legitimate transaction spending a coin differently might be created. The issue is the extra individuals 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 downside to resolve reliably.
CTV offers a approach 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 tremendously simplifies the coordination course of by permitting everybody to get the wanted data to anybody else at any time when they’ll, and as soon as that particular person has everybody’s data they’ll create the chain of CTV transactions with out anybody else’s involvement, and everybody can confirm and make sure that the right end result is the one attainable one.
That’s extremely invaluable by itself, however CTV can even 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 permits a level of introspection and ahead information carrying that’s so restricted it doesn’t exceed the precise performance of something that may be executed 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 an enormous 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 fundamental fee 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 based mostly Ark implementation from Second by Steven Roose to make use of CTV as a substitute.
- The Sapio Language by Jeremy Rubin himself, the next stage language for constructing contracts with CTV (additionally supporting using pre-signed transactions as a substitute).
- 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 occasion 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 danger of enabling something driving the issues round covenants. This could not solely be very severely thought-about, however in my private opinion ought to have been activated years in the past.
