That is the third article in a collection deep diving into particular person covenant proposals which have reached a degree of maturity meriting an in-depth breakdown.
TXHASH and CHECKTXHASHVERIFY (TXHASH), put ahead by Steven Roose and Brandon Black with a BIP quantity at the moment unassigned, is a “template based” covenant that may conceptually seen as an extension or extra superior model of CHECKTEMPLATEVERIFY (CTV).
Earlier than stepping into the nitty gritty of how TXHASH works, let’s refresh on the items of knowledge in a Bitcoin transaction.
At a excessive degree you’ve gotten the outputs, the inputs, and the witness (or script sig for non-Segwit transactions within the enter).
International transaction fields:
- Model
- Marker, indicating Segwit with a flag worth
- Flag, indicating Segwit with a flag worth
- Enter rely
- Output rely
- nLocktime, used for timelocks
Every enter incorporates:
- TXID of the earlier transaction
- VOUT (index) of the output from that transaction being spent
- ScriptSig dimension
- ScriptSig (if a non-segwit transaction)
- Sequence quantity (used for RBF flagging and relative timelocks).
Every output incorporates:
- Quantity of satoshis assigned to the output
- ScriptPubKeySize, the scale of the locking script
- ScriptPubkey, the precise locking script
We are able to ignore the witness discipline when contemplating TXHASH or CHECKTXHASHVERIFY as neither opcode constrains the witness discipline to retain sure properties.
How TXHASH Works
Each TXHASH (tapscript solely) and CHECKTXHASHVERIFY (legacy script and tapscript) have completely different behaviors on the stack due to the variations between legacy script and tapscript. For the needs of this text, these variations aren’t materials, so we’re merely going to disregard them.
If CTV is a covenant opcode that constrains a bitcoin output to solely be spent in a singular and precisely outlined manner, TXHASH is a supercharged model of CTV that permits you to decide and select precisely what items of a transaction are constrained and have to be spent within the precisely pre-defined manner, and which items of a transaction might be no matter somebody desires at spending time.
It provides you the perfect of each worlds, requiring one thing be executed when spending a covenant restricted coin, however then permitting a consumer to do no matter they need with the remainder of the funds obtainable to them or the transaction they’re crafting.
That is completed utilizing the ‘TxFieldSelector’.
CTV merely makes use of a single hash of the pre-defined transaction with the intention to confirm at spending time. With TXHASH, you want a strategy to talk what items of knowledge that hash is committing to, and what items of knowledge it isn’t. That’s the TxFieldSelector’s job.
TxFieldSelector is basically a collection of bytes (that may be variable in size), with every bit speaking what fields in a transaction are dedicated to by the hash that can be verified towards. This lets you choose particular fields of the transaction, nLocktime, model and so forth. It lets you choose particular fields of the inputs and outputs, i.e. embody or not the sequence quantity, or the earlier output id, or the taproot annex (a datafield particular to taproot scripts). The outputs, whether or not to decide to the ScriptPubkey, the quantity values, each, or neither. You can even determine precisely which outputs and inputs these restrictions apply to.
There may be some complexity and suppleness in how the TxFieldSelector is put collectively, and you’ll learn all of the finer particulars right here within the proposed BIP in the event you’re concerned about these, however the chief level to remove is it means that you can decide precisely which components of the transaction are restricted by the covenant when somebody goes to spend the encumbered output, and which components aren’t, to a really granular diploma.
What Is TXHASH Helpful For
Firstly, TXHASH means that you can do every thing that you would be able to with CTV. So all the worth offered by CTV to optimize the coordination prices of something at the moment attainable with pre-signed transactions can also be offered by TXHASH. But it surely supercharges that functionality massively. As a substitute of getting to decide to the whole thing of a transaction, you’ll be able to commit to simply the components you care about.
This has two huge advantages in principle proper off the bat. To begin with, in band price administration for layer twos turns into simpler to cope with. At present using anchor outputs is required to fee-bump layer two settlement transactions with Baby Pays For Mother or father, the place a transaction spending an output from an unconfirmed one can add to the online charges for each. TXHASH enables you to decide to solely your counterparties outputs in a multiparty transaction, and depart yours free to do no matter you need with (caveat right here that different issues have to be executed to make this protected so a 3rd get together can’t burn your entire funds to charges), together with decrementing barely to RBF the transaction.
Second, the door is now open for multiparty protocols to permit granular ensures about what off-chain transactions are committing to. Some customers can now obtain a assure about how their cash can be spent, however not need to care about what another group of customers does with theirs. I can make sure that one TxFieldSelector ensures my cash are dealt with correctly, and I don’t need to care about the place anybody else’s cash go.
Together with CHECKSIGFROMSTACK (CSFS), TXHASH can facilitate a totally generalized SIGHASH system. The SIGHASH flag is part of a signature that communicates what components of the transaction to examine the signature towards. They’re at the moment:
- SIGHASH_ALL – indicators all inputs and outputs
- SIGHASH_NONE – indicators all inputs and no outputs
- SIGHASH_SINGLE – indicators all inputs and the output with the identical index as this enter
None of those SIGHASH flags permit including any new inputs to a transaction with out invalidating them, however every has an ANYONECANPAY model that solely indicators its personal enter and the suitable outputs, permitting anybody else to then add new inputs, and new outputs for the ANYONECANPAY model of SIGHASH_NONE and SIGHASH_SINGLE.
By with the ability to “sideload” new TxFieldSelectors utilizing CSFS, customers can emulate a SIGHASH system that enables them to select and select precisely which particular person items of a transaction the signature commits to or not.
TXHASH additionally permits implementing equality between the worth of inputs and outputs through the use of particular person TxFieldSelectors that commit solely to a single worth discipline of an enter or output you want to examine, after which guaranteeing their hashes are the identical on the stack.
Closing Ideas
TXHASH is a possible supercharging of CTV, enabling an extremely granular diploma of introspection of the spending transaction which might be extremely highly effective, particularly together with one thing like CSFS.
Nonetheless, that energy is expressive sufficient that it opens up the door to an extremely giant design area. One that might probably have a cloth impact on the general incentives of Bitcoin. Issues like guaranteeing quantity equality throughout outputs or inputs is getting very near the territory of what’s wanted for trustless automated trade on-chain. That may be a critical supply of Miner Extractable Worth (MEV), which has been a really critical incentive and centralization drawback for different blockchains to cope with.
TXHASH ought to completely not be dismissed, because it offers extremely highly effective primitives for protocol builders to make the most of, however the potential second order implications of what individuals will construct with it must be weighed towards the positives.
