Hey James,

Really cool proposal. I’ve been thinking a lot lately about script paths for inheritance. In a lot of the “have a relative time lock that allows a different key to spend coins, or allows a smaller threshold of a multisig to spend” schemes, you have the problem of needing to “refresh” all of your coins when the timelock is close to maturation. In a lot of the “use multisig with ephemeral keys to emulate covenants” schemes, you have to pre-commit to the terminal destination well in advance of the spend-path being used, which leads to all kinds of thorny questions about security and availability of *those* keys. In other words, you either have to have unbound destinations but a timer that needs resetting, or you have unbound time but fixed destinations. This design gets you the best of both because the destination SPKs aren’t committed to until the unvaulting process starts. This (or something like this with destination binding at unvault-time) would be an incredibly useful tool for inheritance designs in wallets.

I need to think a bit more about the recovery path not having any real encumbrances on it. Maybe in practice if you’re worried about DoS, you have UTXOs that commit to multiple vault paths that have tweaked recovery destinations or something, or maybe it really is the right move to say that if recovery is triggered, you probably do want it for all of your inflight unvaultings.

Looking forward to reading this a few more times and talking more about it.

Thanks!
rijndael

On Mon, Jan 9, 2023 at 11:07 AM, James O'Beirne via bitcoin-dev <bitcoin-dev@lists.linuxfoundation.org> wrote:

> For the last few years, I've been interested in vaults as a way to
> substantially derisk custodying Bitcoin, both at personal and commercial
> scales. Instead of abating with familiarity, as enthusiasm sometimes
> does, my conviction that vaults are an almost necessary part of bitcoin's
> viability has only grown over the years.
>
> Since people first started discussing vaults, it's been pretty clear that
> some kind of covenant-enabling consensus functionality is necessary to
> provide the feature set necessary to make vault use practical.
>
> Earlier last year I experimented with using OP_CTV[1], a limited covenant
> mechanism, to implement a "minimum-viable" vault design. I found that the
> inherent limitations of a precomputed covenant scheme left the resulting
> vault implementation wanting, even though it was an improvement over
> existing strategies that rely on presigned transactions and (hopefully)
> ephemeral keys.
>
> But I also found proposed "general" covenant schemes to be
> unsuitable for this use. The bloated scriptPubKeys, both in size and
> complexity, that would result when implementing something like a vault
> weren't encouraging. Also importantly, the social-consensus quagmire
> regarding which covenant proposal to actually deploy feels at times
> intractable.
>
> As a result, I wanted to explore a middle way: a design solely concerned
> with making the best vault use possible, with covenant functionality as a
> secondary consideration. In other words, a proposal that would deliver
> the safety benefits of vaults to users without getting hung up on
> trying to solve the general problem of covenants.
>
> At first this design, OP_VAULT, was just sort of a pipe dream. But as I
> did more thinking (and eventually implementing) I became more convinced
> that, even if it isn't considered for soft-fork, it is a worthwhile
> device to serve as a standard benchmark against which other proposals
> might be judged.
>
> I wrote a paper that summarizes my findings and the resulting proposal:
> https://jameso.be/vaults.pdf
>
> along with an accompanying draft implementation:
> https://github.com/bitcoin/bitcoin/pull/26857
>
> I might work on a BIP if there's interest.
>
> James
> [1]: https://github.com/jamesob/simple-ctv-vault