Subject: Re: [bitcoin-dev] Wallet policies for descriptor wallets

From: darosior <[email-masked]>
Date: Mon, 23 Jan 2023 19:53:18 +0000

Hello Salvatore,

It's not something about the specifications of wallet policies, but regarding the guidelines for implementers on signing devices. Quoting BIP-wallet-policies:

> Moreover, other limitations like the limited size of the screen might affect what design choices are available in practice. Therefore, minimizing the size of the information shown on-screen is important for a good user experience; that is crucial since the ability for the user to completely validate on-screen the kind of script used (and each of the involved keys) is a prerequisite for secure usage, as the machine that is interacting with the hardware signer (and running the software wallet) is considered untrusted.

> The device shows the wallet policy to the user using the secure screen.

​

> - Template with miniscript for "1 of 2 equally likely keys":
>   wsh(or_b(pk(@0/**),s:pk(@1/**)))

​

Actually you can save a few more characters, and gain some clarity, by showing the "semantic policy" instead of the actual Miniscript.

If the intent is for the user to verify the semantic of the Bitcoin Script they are importing, you can just drop all the type information.

For instance, for a Miniscript representing the Miniscript policy "a 3-of-3 that becomes a 2-of-3 after 90 days" instead of showing:

thresh(3,pk(Alice),s:pk(Bob),s:pk(Carol),sln:older(12960))

You could show:

thresh(3,pk(Alice),pk(Bob),pk(Carol),older(12960))

For this specific example you'd save 8 (confusing) characters to be verified on the signing device.

I wonder if signing devices could even go further and display a plain english verification to the user, like "This policy contains 4 spending paths. Be ready to verify the 4 spending paths. The first spending path is Alice, Bob and Carol signing together. The second spending path is Bob and Carol signing together after 90 days. The third spending path is Alice and Carol signing together after 90 days.

The third spending path is Alice and Bob signing together after 90 days

."

It seems feasible to be doable in a general manner from a Miniscript "semantic policy".

I guess it clashes with the user willing to check their backup against the policy registered on the device. You could always have the user-friendly policy check at first and have an option to show the raw descriptor for them to be able to cross-check it with their backup.

PS: the numerous usage of the word "policy" is getting complex lol, is it a Miniscript concrete policy, a Miniscript semantic policy, a BIP-wallet-policies policy? :)

Antoine Poinsot

------- Original Message -------
Le lundi 21 novembre 2022 à 12:27 PM, Salvatore Ingala via bitcoin-dev <[email-masked]> a écrit :

> Hi list,
>
> Following up on this topic, I now opened a pull request with the BIP proposal:
>
> https://github.com/bitcoin/bips/pull/1389
>
> I also attempted a proof-of-concept of how an integration of wallet policies to HWI might look like:
>
> https://github.com/bitcoin-core/HWI/pull/647
>
> which might help to provide context, and also serves as a demo of the possible UX flows with hardware signers (as currently implemented in the Ledger bitcoin app).
>
> There are no substantial changes to the initial version proposed to the list:
> - some additional restrictions to the allowed descriptors were added as further simplifications;
> - added test vectors and observations on backwards compatibility;
> - general improvements to the text.
>
> I look forward to your comments and improvements.
> Salvatore Ingala
>
> On Thu, 5 May 2022 at 16:32, Salvatore Ingala <[email-masked]> wrote:
>
>> In the implementation work to implement descriptors and miniscript support in hardware wallets [a][b], I encountered a number of challenges. Some of them are technical in nature (e.g. due to constraints of embedded development). Others are related to the attempts of shaping a good user experience; with bitcoin reaching more people who are not tech-savvy, self-custody is only as secure as what those newcomers can use easily enough.
>>
>> The main tool that I am using to address some of these challenges is a layer that sits _on top_ of descriptors/miniscript, while staying very close to it. Since there is nothing that is vendor-specific in the vast majority of the approach I'm currently using, I tried to distill it here for your comments, and will propose a BIP if this is deemed valuable.
>>
>> I called the language "wallet policies" (suggestions for a better name are welcome). I believe an approach based on wallet policies can benefit all hardware wallets (stateless or not) that want to securely support complex scripts; moreover, wallet policies are close enough to descriptors that their integration should be extremely easy for any software wallet that is currently using descriptors.
>>
>> [a]: https://blog.ledger.com/bitcoin-2 - early demo
>> [b]: https://blog.ledger.com/miniscript-is-coming - miniscript example
>>
>> Salvatore Ingala
>>
>> ======================================================
>>
>> This document starts with a discussion on the motivation for wallet policies, followed by their formal definition, and some recommendations for implementations.
>>
>> == Rationale ==
>> Output script descriptors [1] were introduced in bitcoin-core as a way to represent collections of output scripts. It is a very general and flexible language, designed to catch all the possible use-cases of bitcoin wallets (that is, if you know the script and you have the necessary keys, it will be possible to sign transactions with bitcoin-core's descriptor-based wallets).
>>
>> Unfortunately, descriptors are not a perfect match for the typical usage of hardware wallets. Most hardware wallets have the following limitations compared to a general-purpose machine running bitcoin-core:
>>
>> - they are embedded devices with limited RAM and computational power;
>> - they might not be able to import additional private keys (all the keys are generated from a single seed via [BIP-32](https://github.com/bitcoin/bips/blob/master/bip-0032.mediawiki));
>> - they might not have permanent storage (*stateless* hardware wallet design).
>>
>> Moreover, other limitations like the limited size of the screen might affect what design choices are available in practice. Therefore, minimizing the size of the information shown on-screen is important for a good user experience.
>>
>> A more native, compact representation of the wallet receive/change would also benefit the UX of software wallets using descriptors to represent software wallets using descriptors/miniscript for multisignature or other complex locking conditions.
>>
>> === Security and UX concerns of scripts in hardware wallets ===
>> For a hardware wallet, allowing the usage of complex scripts presents challenges in terms of both security and user experience.
>>
>> ==== Security issues ====
>>
>> One of the security properties that hardware wallets strive to guarantee is the following: **as long as the user correctly verifies the information that is shown on the hardware wallet's screen before approving, no action can be performed without the user's consent**.
>> This must hold even in scenarios where the attacker has full control of the machine that is connected to the hardware wallet, and can execute arbitrary requests or tamper with the legitimate user's requests.
>>
>> Therefore, it is not at all trivial to allow complex scripts, especially if they contain keys that belong to third parties.
>> The hardware wallet must guarantee that the user knows precisely *what* "policy" is being used to spend the funds, and that the "unspent" funds (if any) will be protected by the same policy. This makes it impossible for an attacker to surreptitiously modify the policy, therefore stealing or burning user's funds.
>>
>> ==== UX issues ====
>>
>> With miniscript (and taproot trees) allowing substantially more complex spending policies to be used, it becomes more challenging to make sure that the user is able _in practice_ to verify the information on the screen. Therefore, there are two fundamental design goals to strive for:
>> - Minimize the amount of information that is shown on screen - so that the user can actually validate it.
>> - Minimize the number of times the user has to validate such information.
>>
>> Designing a secure protocol for the coordination of a descriptor wallet among distant parties is also a challenging problem that is out of scope in this document. See BIP-129 [2] for an approach designed for multisignature wallets.
>>
>> === Policy registration as a solution ===
>>
>> A solution to address the security concerns, and part of the UX concerns, is to have a *registration* flow for the wallet policy in the hardware wallet. The "wallet policy" must contain enough information to generate all the relevant addresses/scripts, and for the hardware wallet to identify the keys that it controls and that are needed to spend the funds sent to those addresses.
>>
>> Before a new policy is used for the first time, the user will register a `wallet policy` into the hardware wallet. While the details of the process are out of scope in this document, the flow should be something similar to the following:
>>
>> 1) The software wallet initiates a _wallet policy registration_ on the hardware wallet; the information should include the wallet policy, but also a unique *name* that identifies the policy.
>> 2) The hardware wallet shows the wallet policy to the user using the secure screen.
>> 3) After inspecting the policy and comparing it with a trusted source (for example a printed backup), the user approves the policy.
>> 4) If stateful, the hardware wallet persists the policy in its permanent memory; if stateless, it returns a "proof of registration".
>>
>> The details of how to create a proof of registration are out of scope for this document; using a *message authentication codes* on a hash committing to the wallet policy, its name and any additional metadata is an effective solution if correctly executed.
>>
>> Once a policy is registered, the hardware wallet can perform the usual operations securely:
>> - generating receive and change addresses;
>> - showing addresses on the secure screen;
>> - sign transactions spending from a wallet, while correctly identifying change addresses and computing the transaction fees.
>>
>> Before any of the actions mentioned above, the hardware wallet will retrieve the policy from its permanent storage if stateful; if stateless it will validate the _proof of registration_ before using the wallet policy provided by the client.
>> Once the previously registered policy is correctly identified and approved by the user (for example by its name), and *as long as the policy registration was executed securely*, hardware wallets can provide a user experience similar to the usual one for single-signature transactions.
>>
>> === Avoiding blowup in descriptor size ===
>>
>> While reusing a pubkey in different branches of a miniscript is explicitly forbidden by miniscript (as it has certain negative security implications), it is still reasonable to reuse the same *xpub* in multiple places, albeit with different final steps of derivation (so that the actual pubkeys that are used in the script are indeed different).
>>
>> For example, using Taproot, a *3*-of-*5* multisignature wallet could use:
>> - a key path with a 5-of-5 MuSig
>> - a script tree with a tree of 10 different 3-of-3 MuSig2 scripts, that are generated, plus a leaf with a fallback *3*-of-*5* multisignature using plain multisignature (with `OP_CHECKSIGADD`).
>>
>> This could look similar to:
>>
>> ```
>> tr(musig2(xpubA,xpubB,xpubC,xpubD,xpubE)/<0;1>/*), {
>> {
>> {
>> pk(musig2(xpubA,xpubB,xpubC)/<2;3>/*),
>> {
>> pk(musig2(xpubA,xpubB,xpubD)/<4;5>/*)
>> pk(musig2(xpubA,xpubB,xpubE)/<6;7>/*),
>> }
>> },
>> {
>> pk(musig2(xpubA,xpubC,xpubD)/<8;9>/*),
>> {
>> pk(musig2(xpubA,xpubC,xpubE)/<10;11>/*),
>> pk(musig2(xpubA,xpubD,xpubE)/<12;13>/*)
>> }
>> }
>> },
>> {
>> {
>> pk(musig2(xpubB,xpubC,xpubD)/<14;15>/*),
>> pk(musig2(xpubB,xpubC,xpubE)/<16;17>/*)
>> },
>> {
>> pk(musig2(xpubB,xpubD,xpubE)/<18;19>/*),
>> {
>> pk(musig2(xpubC,xpubD,xpubE)/<20;21>/*),
>> sortedmulti_a(3,
>> xpubA/<22;23>/*,
>> xpubB/<22;23>/*,
>> xpubC/<22;23>/*,
>> xpubD/<22;23>/*,
>> xpubE/<22;23>/*)
>> }
>> }
>> }
>> })
>> ```
>>
>> Note that each root xpub appears 8 times. With xpubs being up to 118 bytes long, the length of the full descriptor can get extremely long (the problem gets *exponentially* worse with larger multisignature schemes).
>>
>> Replacing the common part of the key with a short key placeholder and moving the key expression separately helps to keep the size of the wallet policy small, which is crucial to allow human inspection in the registration flow.
>>
>> === Restrictions on the supported descriptors ====
>>
>> The policy language proposed in this document purposely targets only a stricter subset of the output descriptors language, and it attempts to generalize in the most natural way the approach that is already used for single-signature *accounts* (as described in BIP-44 [3], BIP-49 [4], BIP-84 [5], or BIP-86 [6]), or in multisignature setups (see for example BIP-48 [7] and BIP-87 [8]).
>>
>> Unlike the BIPs mentioned above, it is not tied to any specific script template, as it applies to arbitrary scripts that can be represented with descriptors and miniscript.
>>
>> Supporting only a reduced feature set when compared to output descriptors helps in implementations (especially on hardware wallets), while attempting to capture all the common use cases. More features can be added in the future if motivated by real world necessity.
>>
>> By keeping the structure of the wallet policy language very close to that of descriptors, it should be straightforward to:
>> - write wallet policy parsers;
>> - extract the descriptors defined by a wallet policy;
>> - convert a pair of descriptors describing a wallet "account" used in current implementations into the corresponding wallet policy.
>>
>> == Wallet policies ==
>>
>> This section formally defines wallet policies, and how they relate to output script descriptors.
>>
>> === Formal definition ===
>>
>> A wallet policy is composed by a wallet descriptor template, together with a vector of key information items.
>>
>> ==== Wallet descriptor template ====
>>
>> A wallet descriptor template is a `SCRIPT` expression.
>>
>> `SCRIPT` expressions:
>> - `sh(SCRIPT)` (top level only): P2SH embed the argument.
>> - `wsh(SCRIPT)` (top level or inside `sh` only): P2WSH embed the argument.
>> - `pkh(KP)` (not inside `tr`): P2PKH output for the given public key (use `addr` if you only know the pubkey hash).
>> - `wpkh(KP)` (top level or inside `sh` only): P2WPKH output for the given compressed pubkey.
>> - `multi(k,KP_1,KP_2,...,KP_n)`: k-of-n multisig script.
>> - `sortedmulti(k,KP_1,KP_2,...,KP_n)`: k-of-n multisig script with keys sorted lexicographically in the resulting script.
>> - `tr(KP)` or `tr(KP,TREE)` (top level only): P2TR output with the specified key as internal key, and optionally a tree of script paths.
>> - any valid miniscript template (inside `wsh` or `tr` only).
>>
>> `TREE` expressions:
>> - any `SCRIPT` expression
>> - An open brace `{`, a `TREE` expression, a comma `,`, a `TREE` expression, and a closing brace `}`
>>
>> Note: "miniscript templates" are not formally defined in this version of the document, but it is straightforward to adapt this approach.
>> `KP` expressions (key placeholders) consist of
>> - a single character `@`
>> - followed by a non-negative decimal number, with no leading zeros (except for `@0`).
>> - possibly followed by either:
>> - the string `/**`, or
>> - a string of the form `/<NUM;NUM>/*`, for two distinct decimal numbers `NUM` representing unhardened derivations
>>
>> The `/**` in the placeholder template represents commonly used paths for receive/change addresses, and is equivalent to `<0;1>`.
>>
>> The placeholder `@i` for some number *i* represents the *i*-th key in the vector of key origin information (which must be of size at least *i* + 1, or the wallet policy is invalid).
>>
>> ==== Key informations vector ====
>>
>> Each element of the key origin information vector is a `KEY` expression.
>>
>> - Optionally, key origin information, consisting of:
>> - An open bracket `[`
>> - Exactly 8 hex characters for the fingerprint of the master key from which this key is derived from (see [BIP32](https://github.com/bitcoin/bips/blob/master/bip-0032.mediawiki) for details)
>> - Followed by zero or more `/NUM'` path elements to indicate hardened derivation steps between the fingerprint and the xpub that follows
>> - A closing bracket `]`
>> - Followed by the actual key, which is either
>> - a hex-encoded pubkey, which is either
>> - inside `wpkh` and `wsh`, only compressed public keys are permitted (exactly 66 hex characters starting with `02` or `03`.
>> - inside `tr`, x-only pubkeys are also permitted (exactly 64 hex characters).
>> - a serialized extended public key (`xpub`) (as defined in [BIP 32](https://github.com/bitcoin/bips/blob/master/bip-0032.mediawiki))
>>
>> The placeholder `@i` for some number *i* represents the *i*-th key in the vector of key orIgin information (which must be of size at least *i* + 1, or the wallet policy is invalid).
>>
>> The policy template is invalid if any placeholder `@i` has derivation steps while the corresponding `(i+1)`-th element of the keys vector is not an xpub.
>>
>> ==== Additional rules ====
>>
>> The wallet policy is invalid if any placeholder expression with additional derivation steps is used when the corresponding key information is not an xpub.
>>
>> The key information vector *should* be ordered so that placeholder `@i` never appear for the first time before an occurrence of `@j` for some `j < i`; for example, the first placeholder is always `@0`, the next one is `@1`, etc.
>>
>> === Descriptor derivation ===
>>
>> From a wallet descriptor template (and the associated vector of key informations), one can therefore obtain the 1-dimensional descriptor for receive and change addresses by:
>>
>> - replacing each key placeholder with the corresponding key origin information;
>> - replacing every `/**` with `/0/*` for the receive descriptor, and `/1/*` for the change descriptor;
>> - replacing every `/<M,N>` with `/M` for the receive descriptor, and `/N` for the change descriptor.
>>
>> For example, the wallet descriptor `pkh(@0/**)` with key information `["[d34db33f/44'/0'/0']xpub6ERApfZwUNrhLCkDtcHTcxd75RbzS1ed54G1LkBUHQVHQKqhMkhgbmJbZRkrgZw4koxb5JaHWkY4ALHY2grBGRjaDMzQLcgJvLJuZZvRcEL"]` produces the following two descriptors:
>>
>> - Receive descriptor: `pkh([d34db33f/44'/0'/0']xpub6ERApfZwUNrhLCkDtcHTcxd75RbzS1ed54G1LkBUHQVHQKqhMkhgbmJbZRkrgZw4koxb5JaHWkY4ALHY2grBGRjaDMzQLcgJvLJuZZvRcEL/0/*)`
>>
>> - Change descriptor: `pkh([d34db33f/44'/0'/0']xpub6ERApfZwUNrhLCkDtcHTcxd75RbzS1ed54G1LkBUHQVHQKqhMkhgbmJbZRkrgZw4koxb5JaHWkY4ALHY2grBGRjaDMzQLcgJvLJuZZvRcEL/1/*)`
>>
>> === Implementation guidelines ===
>>
>> Implementations must not necessarily implement all of the possible wallet policies defined by this standard, but it is recommended to clearly document any limitation.
>>
>> Implementations can add additional metadata that is stored together with the wallet policy for the purpose of wallet policy registration and later usage. Metadata can be vendor-specific and is out of the scope of this document.
>>
>> Any implementation in a general-purpose software wallet allowing arbitrary scripts (or any scripts that involve external cosigners) should put great care into a process for backing up a wallet policy. In fact, unlike typical single-signature scenarios, the seed alone is no longer enough to discover wallet policies with existing funds, and the loss of the backup is likely to lead to permanent loss of funds.
>>
>> Avoiding key reuse among different wallet accounts is also extremely important, but out of scope for this document.
>>
>> == Examples ==
>>
>> Some examples of wallet descriptor templates (vectors of keys omitted for simplicity):
>> - Template for a native segwit account:
>> wpkh(@0/**)
>>
>> - Template for a taproot BIP86 account:
>> tr(@0/**)
>> - Template for a native segwit 2-of-3:
>> wsh(sortedmulti(2,@0/**,@1/**,@2/**))
>> - Template with miniscript for "1 of 2 equally likely keys":
>> wsh(or_b(pk(@0/**),s:pk(@1/**)))
>>
>> More examples (esp. targeting miniscript on taproot) will be added in the future.
>>
>> == References ==
>>
>> * [1] - Output Script Descriptors: https://github.com/bitcoin/bitcoin/blob/master/doc/descriptors.md
>> * [2] - BIP-129 (Bitcoin Secure Multisig Setup): https://github.com/bitcoin/bips/blob/master/bip-0129.mediawiki
>> * [3] - BIP-44: https://github.com/bitcoin/bips/blob/master/bip-0044.mediawiki
>> * [4] - BIP-49: https://github.com/bitcoin/bips/blob/master/bip-0049.mediawiki
>> * [5] - BIP-84: https://github.com/bitcoin/bips/blob/master/bip-0084.mediawiki
>> * [6] - BIP-86: https://github.com/bitcoin/bips/blob/master/bip-0086.mediawiki
>> * [7] - BIP-48: https://github.com/bitcoin/bips/blob/master/bip-0048.mediawiki
>> * [8] - BIP-87: https://github.com/bitcoin/bips/blob/master/bip-0087.mediawiki