Re: [bitcoin-dev] CheckTemplateVerify Does Not Scale Due to UTXO's Required For Fee Payment

From: Peter Todd <pete@petertodd•org>
To: alicexbt <alicexbt@protonmail•com>
Cc: bitcoin-dev@lists•linuxfoundation.org
Subject: Re: [bitcoin-dev] CheckTemplateVerify Does Not Scale Due to UTXO's Required For Fee Payment
Date: Tue, 30 Jan 2024 04:41:30 +0000	[thread overview]
Message-ID: <Zbh9+oNDuPEapFwQ@petertodd.org> (raw)
In-Reply-To: <Plx5nCQxEjS8u-XLGEza0bBGgztkCh7wMTckN95VNqqM6HZfbXxywAqMxiwhO-VIIJq9vioSr7jPwWTIksLkgdTM9aBn6mkmlfHGm-1LhbM=@protonmail.com>

[-- Attachment #1: Type: text/plain, Size: 3367 bytes --]

On Sat, Jan 27, 2024 at 05:50:27PM +0000, alicexbt wrote:
> Hi Peter,
> 
> In addition to the various methods shared by Brandon, users also have the option of using multiple templates, each with different fee rates. While this introduces some trade-offs, it remains a possibility that some users might prefer.

I mentioned this possibility in the email that you are replying to. It is
difficult to impossible to implement in many (but not all!) CTV-using
constructions because you get an exponential "blow-up" of possible fee
variants.

> OP_IF
>     //Template-A
>    OP_PUSHBYTES_32 HASH1 OP_CHECKTEMPLATEVERIFY
> OP_ELSE
>     //Template-B
>    OP_PUSHBYTES_32 HASH2 OP_CHECKTEMPLATEVERIFY
> OP_ENDIF

Note that with taproot, it is more efficient to do this via taproot leafs than
with IF statements.

> /dev/fd0
> floppy disk guy
> 
> Sent with Proton Mail secure email.
> 
> On Wednesday, January 24th, 2024 at 7:31 PM, Peter Todd via bitcoin-dev <bitcoin-dev@lists•linuxfoundation.org> wrote:
> 
> > CheckTemplateVerify(1) is a proposed covenant opcode that commits to the
> > transaction that can spend an output. Namely, # of inputs, # of outputs,
> > outputs hash, etc. In practice, in many if not most CTV use-cases intended to
> > allow multiple parties to share a single UTXO, it is difficult to impossible to
> > allow for sufficient CTV variants to cover all possible fee-rates. It is
> > expected that CTV would be usually used with anchor outputs to pay fees; by
> > creating an input of the correct size in a separate transaction and including
> > it in the CTV-committed transaction; or possibly, via a transaction sponsor
> > soft-fork.
> > 
> > This poses a scalability problem: to be genuinely self-sovereign in a protocol
> > with reactive security, such as Lightning, you must be able to get transactions
> > mined within certain deadlines. To do that, you must pay fees. All of the
> > intended exogenous fee-payment mechanisms for CTV require users to have at
> > least one UTXO of suitable size to pay for those fees.
> > 
> > This requirement for all users to have a UTXO to pay fees negates the
> > efficiency of CTV-using UTXO sharing schemes, as in an effort to share a UTXO,
> > CTV requires each user to have an extra UTXO. The only realistic alternative is
> > to use a third party to pay for the UTXO, eg via a LN payment, but at that
> > point it would be more efficient to pay an out-of-band mining fee. That of
> > course is highly undesirable from a mining centralization perspective.(2)
> > 
> > Recommendations: CTV in its current form be abandoned as design foot-gun. Other
> > convenant schemes should be designed to work well with replace-by-fee, to avoid
> > requirements for extra UTXOs, and to maximize on-chain efficiency.
> > 
> > 1) https://github.com/bitcoin/bips/blob/deae64bfd31f6938253c05392aa355bf6d7e7605/bip-0119.mediawiki
> > 2) https://petertodd.org/2023/v3-transactions-review#anchor-outputs-are-a-danger-to-mining-decentralization
> > 
> > --
> > https://petertodd.org 'peter'[:-1]@petertodd.org
> > _______________________________________________
> > bitcoin-dev mailing list
> > bitcoin-dev@lists•linuxfoundation.org
> > https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev

-- 
https://petertodd.org 'peter'[:-1]@petertodd.org

[-- Attachment #2: signature.asc --]
[-- Type: application/pgp-signature, Size: 833 bytes --]