Jeremy Rubin A proposal titled Un’FE’d Covenants (FE = Functional Encryption). Given Discussions about the covenants are ongoing. Bitcoin In the past year or so, this proposal has been a more practical solution. All Covenant proposals require, so far, a “soft fork” (actually opcodes), as well as the implementation and development of cryptography that is not proven.Functional EncryptionIt is either a ridiculously expensive monetary expense to use it (ColliderScript) or a purely arbitrary cost.
Jeremy’s proposal requires no softforks, and does not impose a burdensome and impractical cost on users to utilize. The The tradeoff is a completely different security model. By In order to emulate covenants on BitVM-based bonds, a system of oracles is required. Bitcoin Right now.
The Oracles
The Oracles enforce covenant conditions. This It is relatively easy to set up and it’s the foundation for any building. Jeremy’s proposal. The Oracle is in charge of this scheme’s funds and has been entrusted to enforce the covenant terms. You Oracles should not be required to track the conditions of each covenant locally. This introduces state risk where if the oracles database is corrupted or lost it has no idea how to handle honest enforcement for everyone’s coins. In To get around the problem, Jeremy Use of Taproot.
Schnorr based keys can be “tweaked” by using the hash of data to modify a public key. This The tweaking of a private key allows it to sign the key and to prove what data has been committed by the key. Having Oracles generate keys, but the covenant programs are tweaked by the users. They can commit to what oracles should be enforcing while still keeping that burden on the user.
Oracles It is possible to federate the systems to reduce the need for trust in one party. From Users can load this address and then, when they are ready to enforce a condition, present the oracle with the spend transaction, oracle programme, and any witness information necessary to demonstrate that the given transaction meets the conditions. If The oracle will sign the contract if it is in compliance with the covenant.
For If the outcome of a simple covenant is known in advance, as with CHECKTEMPLATEVERIFY(CTV), the user can have the Oracle pre-sign all transactions enforcing that covenant. They then simply wait until they are needed.
An The state-based covenants (such as rollups) that are regularly updated and track the actual status of their users should be considered. In If you have a covenant, then the transaction that is signed by the oracle must be committed to the current status of the covenant. Use OP_RETURN to ensure the oracle has the ability to verify the update of each transaction in the system rollup without downloading witness data. This It is important to avoid the need for oracles to physically store data locally, as this can be a risky process.
In On the long-term, the data needs of oracles are optimized when using zero knowledge proofs. That way the oracle only has to check that the proof they have is that the agreement that was signed follows all the rules. Again In the case of rollups it is important to design them in a way that ensures the data needed to leave the system can be made accessible to the users. This will allow the user to have the information they require if they want to directly contact the Oracle to retrieve their money.
The BitVM Bond
So The scheme has been a complete success. You In essence, you are giving away your money in the hope that they will enforce arbitrary agreements. By Modifying the above scheme slightly, it can be protected with crypto-economic incentives rather than just pure trust.
Above In the previous section, it was discussed how OP_RETURN can be used to track state in stateful covenants. OP_RETURN is also able to be used for publishing witness data to any covenant transaction to ensure that the conditions have been met.
BitVM circuits can be built to test whether the transaction that the oracle signs matches with the conditions it’s enforcing. Remember The key generated, and the funds that are sent to enforce any covenants. Meaning BitVM can receive the data as well as the transaction that is being made from an address.
Oracles You can be asked to deposit a bail with BitVM (who will also have to place a bond on behalf of the Oracle To claim (if someone is falsely accused). This As long as the bond’s value is higher than the amount secured by covenants, this system can be used. There Oracles cannot violate covenant conditions without causing them to lose money.
Trade Offs
There Here, there are tradeoffs which are far worse than simply using covenants as part of consensus rules. FirstlyOracle-imposed covenants must be available online. With the exception of pre-signed covenants such as CTV, if the oracle is offline when users need to enforce a covenant, they can’t. The Oracle is required to be present for signing.
SecondlyIf the oracle bond system is ever adopted widely, then the required liquidity can be massive. This This is an ineffective solution compared with the native implementation at consensus of Covenant opcodes.
LastlyThe extra data that must be added to the chain in order to make the BitVM Bond Scheme work are much less efficient when it comes to blockspace usage than native covenant implementations.
OverallThe proposal does not come close to being as effective and as secure as Native Covenants. On If we end up with a pre-mature ossification scenario, then this would be a great way to sneak covenants in. Bitcoin Without relying on cryptography that is unproven or costs to end users which are completely unreasonable.
Jeremy Has given us an alternative to the worst possible scenario of expanding what can be constructed on Bitcoin.
Every trader who trades cryptocurrency on the Binance exchange wants to know about the upcoming pumping in the value of coins in order to make huge profits in a short period of time.
This article contains instructions on how to find out when and which coin will participate in the next “Pump”. Every day, the community on Telegram channel Crypto Pump Signals for Binance publishes 10 free signals about the upcoming “Pump” and reports on successful “Pumps” which have been successfully completed by the organizers of the VIP community.Watch a video on how to find out about the upcoming cryptocurrency pump and earn huge profits.
These trading signals help earn huge profit in just a few hours after purchasing the coins published on the Telegram channel.Are you already making a profit using these trading signals? If not, then try it!We wish you good luck in trading cryptocurrency and wish to receive the same profit as VIP subscribers of the Crypto Pump Signals for Binance channel.
