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 mostly” covenant that may conceptually seen as an extension or extra superior model of CHECKTEMPLATEVERIFY (CTV).
Earlier than moving into the nitty gritty of how TXHASH works, let’s refresh on the items of information in a Bitcoin transaction.
At a excessive degree you may have the outputs, the inputs, and the witness (or script sig for non-Segwit transactions within the enter).
World 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 comprises:
TXID of the earlier transaction VOUT (index) of the output from that transaction being spent ScriptSig measurement ScriptSig (if a non-segwit transaction) Sequence quantity (used for RBF flagging and relative timelocks).
Every output comprises:
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 subject when contemplating TXHASH or CHECKTXHASHVERIFY as neither opcode constrains the witness subject to retain sure properties.
How TXHASH Works
Each TXHASH (tapscript solely) and CHECKTXHASHVERIFY (legacy script and tapscript) have totally different behaviors on the stack due to the variations between legacy script and tapscript. For the needs of this text, these variations are usually not 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 method, TXHASH is a supercharged model of CTV that permits you to choose and select precisely what items of a transaction are constrained and should be spent within the precisely pre-defined method, and which items of a transaction may be no matter somebody desires at spending time.
It provides you the very best of each worlds, requiring one thing be completed when spending a covenant restricted coin, however then permitting a consumer to do no matter they need with the remainder of the funds out there 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 so as to confirm at spending time. With TXHASH, you want a method to talk what items of knowledge that hash is committing to, and what items of knowledge it’s not. That’s the TxFieldSelector’s job.
TxFieldSelector is actually 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 shall be verified towards. This lets you choose particular fields of the transaction, nLocktime, model and so on. It lets you choose particular fields of the inputs and outputs, i.e. embrace 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 too can determine precisely which outputs and inputs these restrictions apply to.
There may be some complexity and adaptability in how the TxFieldSelector is put collectively, and you’ll learn all of the finer particulars right here within the proposed BIP when you’re interested by these, however the chief level to remove is it means that you can choose precisely which elements of the transaction are restricted by the covenant when somebody goes to spend the encumbered output, and which elements are usually not, to a really granular diploma.
What Is TXHASH Helpful For
Firstly, TXHASH means that you can do all the things that you would be able to with CTV. So the entire 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. Nevertheless it supercharges that functionality massively. As a substitute of getting to decide to the whole lot of a transaction, you’ll be able to commit to simply the elements you care about.
This has two huge advantages in idea proper off the bat. Initially, in band price administration for layer twos turns into simpler to cope with. At the moment using anchor outputs is required to fee-bump layer two settlement transactions with Baby Pays For Father or mother, the place a transaction spending an output from an unconfirmed one can add to the online charges for each. TXHASH permits you to decide to solely your counterparties outputs in a multiparty transaction, and go away yours free to do no matter you need with (caveat right here that different issues should be completed to make this secure so a 3rd celebration can’t burn your whole 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 shall be spent, however not should care about what another group of customers does with theirs. I can make certain that one TxFieldSelector ensures my cash are dealt with correctly, and I don’t should care about the place anybody else’s cash go.
Together with CHECKSIGFROMSTACK (CSFS), TXHASH can facilitate a very generalized SIGHASH system. The SIGHASH flag is part of a signature that communicates what elements of the transaction to verify 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 having 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 imposing equality between the worth of inputs and outputs by utilizing particular person TxFieldSelectors that commit solely to a single worth subject of an enter or output you want to examine, after which making certain 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 may 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 house. One that might probably have a cloth impact on the general incentives of Bitcoin. Issues like making certain quantity equality throughout outputs or inputs is getting very near the territory of what’s wanted for trustless automated change on-chain. That may be a severe supply of Miner Extractable Worth (MEV), which has been a really severe incentive and centralization downside for different blockchains to cope with.
TXHASH ought to completely not be dismissed, because it supplies extremely highly effective primitives for protocol builders to benefit from, however the potential second order implications of what individuals will construct with it must be weighed towards the positives.
