Subject: Re: [bitcoin-dev] Vaulting (Was: Automatically reverting ("transitory") soft forks)

From: Nadav Ivgi <[email-masked]>
Date: Fri, 29 Apr 2022 02:14:03 +0300

> The whole point of a wallet vault is that you can get the security of a
multisig wallet without having to sign using as many keys.

In my view, the point of a vault is the ability to keep your primary wallet
keys in *highly* deep cold storage (e.g. metal backup only, not loaded on
any HW wallets, with geographically distributed shares and a slow
cumbersome process for collecting them), which is made possible because
you're not supposed to actually need to use these keys, except for the
extraordinary (typically once or twice in a lifetime?) circumstances of
theft.

The user can then use a warmer model for the keys they use more frequently
for the covenant-encumbered two-step spending. But these warmer keys can
themselves also be cold and/or multi-sig, yet more accessible. For example,
a 2-of-2 with standard hardware wallets you have within reach in your
apartment.

So if you have a cold wallet that you anticipate having to access once
every, say, 2-3 months, no matter what scheme you currently use to secure
it, you can improve your overall security by using that same scheme for
securing the covenant-encumbered keys, then use a colder more secure scheme
for your primary keys under the assumption that you'll only have to access
them at most once every several years.

IIUC what you were describing is that you can use your regular multisig
scheme for the primary cold wallet keys, and a 1-of-1 for the
covenant-encumbered keys (which can even be hot on your phone etc).

Both approaches are valid, one gets you more security while the other gets
you more convenience. And there is of course a whole range of options that
can be chosen in between that gets you some of both.

shesek

On Wed, Apr 27, 2022 at 11:09 AM Billy Tetrud via bitcoin-dev <
[email-masked]> wrote:

> @Russell
> > OP_PUBKEY, and OP_PUBKEYHASH as wildcards
>
> Ah I see. Very interesting. Thanks for clarifying.
>
> @Nadav
> > You can have a CTV vault where the hot key signer is a multisig to get
> the advantages of both.
>
> Yes, you can create a CTV vault setup where you unvault to a multisig
> wallet, but you don't get the advantages of both. Rather you get none of
> the advantages and still have all the downsides you get with a multisig
> wallet. The whole point of a wallet vault is that you can get the security
> of a multisig wallet without having to sign using as many keys.
>
> On Mon, Apr 25, 2022 at 5:28 PM Russell O'Connor <[email-masked]>
> wrote:
>
>> On Sun, Apr 24, 2022 at 7:04 PM Billy Tetrud <[email-masked]>
>> wrote:
>>
>>> @Russel
>>> > the original MES vault .. commits to the destination address during
>>> unvaulting
>>>
>>> I see. Looking at the MES16 paper, OP_COV isn't described clearly enough
>>> for me to understand that it does that. However, I can imagine how it
>>> *might* do that.
>>>
>>> One possibility is that the intended destination is predetermined and
>>> hardcoded. This wouldn't be very useful, and also wouldn't be different
>>> than how CTV could do it, so I assume that isn't what you envisioned this
>>> doing.
>>>
>>> I can imagine instead that the definition of the pattern could be
>>> specified as a number indicating the number of stack items in the pattern,
>>> followed by that number of stack items. If that's how it is done, I can see
>>> the user inputting an intended destination script (corresponding to the
>>> intended destination address) which would then be somehow rotated in to the
>>> right spot within the pattern, allowing the pattern to specify the coins
>>> eventually reaching an address with that script. However, this could be
>>> quite cumbersome, and would require fully specifying the scripts along the
>>> covenant pathways leading to a fair amount of information duplication
>>> (since scripts must be specified both in the covenant and in spending the
>>> subsequent output). Both of these things would seem to make OP_COV in
>>> practice quite an expensive opcode to spend with. It also means that, since
>>> the transactor must fully specify the script, its not possible to take
>>> advantage of taproot's script hiding capabilities (were it to send to a
>>> taproot address).
>>>
>>
>> So my understanding is that the COV proposal in MES lets you check that
>> the output's scriptPubKey matches the corresponding script item from the
>> stack, but the script item's value additionally allows some wildcard
>> values.  In particular, it makes use of the otherwise reserved opcodes
>> OP_PUBKEY, and OP_PUBKEYHASH as wildcards representing any, let's say,
>> 32-byte or 20-byte push value.
>>
>> If you just used COV by itself, then these wildcards would be third-party
>> malleable, but you also have to sign the transaction with the hot wallet
>> key, which removes the malleability.
>>
>> No need to rotate anything into place.
>>
>> I hope this makes sense.
>>
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