> Furthermore, the Taro script is not enforced by Bitcoin, meaning those who
> control the Bitcoin script can always choose to ignore the Taro script and
> destroy the Taro assets as a result.
This is correct, as a result in most contexts, an incentive exists for the
holder of an asset to observe the Taro validation rules as otherwise, their
assets are burnt in the process from the PoV of asset verifiers. In the
single
party case things are pretty straight forward, but more care needs to be
taken
in cases where one attempts to express partial application and permits
anyone
to spend a UTXO in question.
By strongly binding all assets to Bitcoin UTXOs, we resolve issues related
to
double spending or duplicate assets, but needs to mind the fact that assets
can
be burnt if a user doesn't supply a valid witness. There're likely ways to
get
around this by lessening the binding to Bitcoin UTXO's, but then the system
would need to be able to collect, retain and order all the set of possible
spends, essentially requiring a parallel network. The core of the system as
it
stands today is pretty simple (which was an explicit design goal to avoid
getting forever distracted by the large design space), with a minimal
implementation being relatively compact given all the Bitcoin context/design
re-use.
The TARO set of tradeoffs is fairly coherent but is subject to certain limitations (modulo my understanding of it being off):
The witnesses for transactions need to be put into Bitcoin transactions even though the Bitcoin layer doesn't understand them
There needs to be a constraint on Taro transactions which is understood by the Bitcoin layer (which often/usually happens naturally because there's a user signature but sometimes doesn't. It's a limitation)
Multiple Taro coins can't consolidate their value into a single output because they only support a single linear history
Taro issuance is limited to a single event rather than potentially multiple events over time subject to special per-asset rules.
This seems like a fairly logical approach (although my understanding of the limitations/tradeoffs could be wrong, especially with regards to consolidation). There's nothing wrong with a system having well documented limitations, but I am puzzled by the announcement saying Taro assets are 'analogous with' colored coins. Taro assets are straightforwardly and unambiguously colored coins and that isn't something to be ashamed of.