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 present 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 stage you’ve 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 accommodates:
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 accommodates:
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 area when contemplating TXHASH or CHECKTXHASHVERIFY as neither opcode constrains the witness area 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 approach, TXHASH is a supercharged model of CTV that permits you to decide and select precisely what items of a transaction are constrained and should be spent within the precisely pre-defined approach, and which items of a transaction may be no matter somebody needs at spending time.
It provides you the very best of each worlds, requiring one thing be performed when spending a covenant restricted coin, however then permitting a person to do no matter they need with the remainder of the funds obtainable to them or the transaction they’re crafting.
That is achieved 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 approach to talk what items of data that hash is committing to, and what items of data it’s not. 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 will probably 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 may as well determine precisely which outputs and inputs these restrictions apply to.
There’s some complexity and suppleness in how the TxFieldSelector is put collectively, and you may learn all of the finer particulars right here within the proposed BIP when you’re keen on these, however the chief level to remove is it means that you can decide precisely which elements of the transaction are restricted by the covenant when somebody goes to spend the encumbered output, and which elements aren’t, to a really granular diploma.
What Is TXHASH Helpful For
Firstly, TXHASH means that you can do all the pieces you can with CTV. So the entire worth supplied by CTV to optimize the coordination prices of something at present doable with pre-signed transactions can be supplied by TXHASH. But it surely supercharges that functionality massively. As a substitute of getting to decide to the whole lot of a transaction, you possibly can commit to only the elements you care about.
This has two massive advantages in principle proper off the bat. To begin with, in band price administration for layer twos turns into simpler to take care of. At the moment using anchor outputs is required to fee-bump layer two settlement transactions with Youngster 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 enables 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 performed to make this secure so a 3rd occasion 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 will probably be spent, however not must 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 must 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 elements of the transaction to verify the signature towards. They’re at present:
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 enable 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 permits 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 by utilizing particular person TxFieldSelectors that commit solely to a single worth area 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 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 massive design area. One that might probably have a fabric 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 alternate on-chain. That could be a severe supply of Miner Extractable Worth (MEV), which has been a really severe incentive and centralization drawback for different blockchains to take care of.
TXHASH ought to completely not be dismissed, because it supplies extremely highly effective primitives for protocol builders to reap the benefits of, however the potential second order implications of what folks will construct with it must be weighed towards the positives.
