Jeremy Rubin, a Bitcoin Core developer, is lobbying for a Speedy Trial of his BIP-119 Miner Activated Soft Fork. Rubin’s BIP-119 seeks to make use of a new operation code.
The new opcode allows for the implementation of covenants, which have several useful applications and could help scale Bitcoin.
However, there are some among the Bitcoin community who are critical of the proposal and worry that BIP-119 will hinder Bitcoin’s fungibility, one of Bitcoin’s core characteristics, while other concerns relate to the speed at which it’s being pushed.
What Is Bitcoin BIP-119?
Bitcoin Improvement Proposal 119 is an improvement proposal to Bitcoin, championed by Jeremy Rubin, seeking to implement the OP_CHECKTEMPLATEVERIFY opcode. This new opcode allows for the integration of covenants.
What Are Covenants?
Covenants are restrictions on how bitcoin can be spent beyond key ownership. In bitcoin transactions, covenants refer mainly to restrictions on where coins can be transferred after acquisition.
For example, wallet A places a covenant on bitcoins it holds, adding a whitelist of related addresses. Wallet A sends bitcoin to wallet B. Wallet B can only send those bitcoins to other wallets on the whitelist.
Why BIP-119?
BIP-119’s proposed OP_CHECKTEMPLATEVERIFY (CTV) allows for the implementation of covenants. Covenants are useful for constructing smart contracts with several useful use cases, such as preventing your funds from being stolen in case of hacking and helping scale the network.
Through the use of CTV, you can create a wallet vault. These can be a useful tool for increasing security for cold storage solutions; they are provided with default transactional paths that move your funds from your cold storage to a hot wallet. This way, if your wallet is hacked, stolen, or lost, they won’t be able to steal your funds.
CTV can also help scale Bitcoin through the implementation of Congestion Controlled Transactions….
