Cloud Hosting

Share this article

The OP_CAT covenant proposal has been formally introduced as BIP-420, with the aim of enabling smart contracts, secure bridges, and on-chain trading on the Bitcoin network.

The proposal, authored by Ethan Heilman and Armin Sabouri, seeks to reintroduce the OP_CAT opcode to Bitcoin via a backward-compatible soft fork by redefining the opcode OP_SUCCESS126. This is the same opcode value used by the original OP_CAT, which was disabled by Satoshi Nakamoto in 2010 due to concerns surrounding potential vulnerabilities.

BIP-420 enables covenants on bitcoin, allowing for smart contracts, secure bridges, on-chain trading, zk proof verification and more, OP_CAT advocate and co-founder of Taproot Wizards Udi Wertheimer said.

Covenants on Bitcoin are advanced scripting features that allow for specific conditions on how bitcoins can be spent in future transactions. They could enable use cases such as creating secure vaults for reversible transactions, automated recurring payments, time-locked transfers for inheritance, and complex financial instruments like escrows and bonds.

In this sense, Bitcoin covenants currently exist as proposed mechanisms to enforce the conditions on how BTC will be transferred in the future. They serve as a set of rules that govern how a particular Bitcoin can be spent, adding an extra layer of security and functionality to the network. Bitcoin covenants operate through Bitcoins scripting language, setting forth conditions that must be met for a Bitcoin transaction to be processed.

There are different types of covenants, each with its own set of advantages and disadvantages. The most common types include:

Value-based covenants: restricts the value of the output of a transaction.

Address-based covenants: restricts the address of the output of a transaction.

Script-based covenants: restricts the script of the output of a transaction.

Bitcoin covenants could revolutionize the way we use Bitcoin today by enabling a wider range of financial products and services to be built on top of the Bitcoin network. They could make Bitcoin more versatile, allowing for more complex transactions and smart contracts.

However, the implementation of Bitcoin covenants is not without challenges. The primary risks include potential issues with fungibility, added complexity, and the introduction of new security vulnerabilities. The concept of covenants in Bitcoin has been discussed since at least 2013.

According to the proposal, the OP_CAT opcode would simplify and expand Bitcoins functionalities, making decentralized protocols more practical and supporting advanced multi-sig setups. Essentially, OP_CAT would significantly increase the power and flexibility of Bitcoin scripting, making it easier to develop more sophisticated applications directly on the Bitcoin blockchain.

Notably, the chances of an OP_CAT soft fork actually happening depends on a combination of factors that include technical capacities from the core developers, on-chain security considerations, and community consensus.

OP_CAT is not the only Bitcoin covenant proposal under discussion though. Other proposals include Check Template Verify (CTV), OP_CHECKSIGFROMSTACK (CSFS), and LNHANCE, each varying in its approach and trade-offs and at different stages of research and debate.

Share this article

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

Crypto Briefing may augment articles with AI-generated content created by Crypto Briefings own proprietary AI platform. We use AI as a tool to deliver fast, valuable and actionable information without losing the insight - and oversight - of experienced crypto natives. All AI augmented content is carefully reviewed, including for factural accuracy, by our editors and writers, and always draws from multiple primary and secondary sources when available to create our stories and articles.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.

Excerpt from:

Bitcoin covenants are coming OP_CAT gets formally introduced as BIP-420 - Crypto Briefing