Key Points
- BIP-420, a Bitcoin Improvement Proposal, introduces the OP_CAT proposal for covenants on Bitcoin.
- OP_CAT could enable advanced scripting features like smart contracts, secure bridges, on-chain trading, and zk proof verification.
The OP_CAT proposal has officially been assigned a Bitcoin Improvement Proposal number, BIP-420. This comes amidst ongoing discussions around the implementation of covenants on Bitcoin.
Udi Wertheimer, an OP_CAT advocate and co-founder of Taproot Wizards, announced the news. He stated that BIP-420 could enable covenants on Bitcoin, which would allow for the creation of smart contracts, secure bridges, on-chain trading, and zk proof verification.
Understanding Covenants and OP_CAT
Covenants on Bitcoin refer to advanced scripting features. These features could set specific conditions for how bitcoins can be spent in future transactions. This could facilitate the creation of secure “vaults” for reversible transactions, automated recurring payments, time-locked transfers for scenarios like inheritance, and complex financial instruments such as escrows and bonds.
OP_CAT was originally one of the first opcodes in Bitcoin. However, it was disabled in 2010 due to concerns about the potential for creating scripts that could lead to vulnerabilities.
The BIP-420 proposal, authored by Ethan Heilman and Armin Sabouri, aims to reintroduce OP_CAT to Bitcoin through a backward-compatible soft fork. This would be achieved by “redefining the opcode OP_SUCCESS126.”
The Impact of OP_CAT
The reintroduction of OP_CAT could simplify and expand Bitcoin’s functionalities. This includes making decentralized protocols more practical, supporting advanced multi-sig setups, and increasing the power and flexibility of Bitcoin scripting. However, the successful implementation of an OP_CAT soft fork depends on a combination of technical, security, and community consensus considerations.
Covenants in Bitcoin have been discussed for several years, dating back to at least 2013. The integration of covenants into Bitcoin could significantly enhance its functionality, bringing it closer to programmatically flexible platforms like Ethereum. However, this also raises concerns regarding complexity and potential security risks.
There are other Bitcoin covenant proposals currently being considered, including CTV, CSFS, and LNHANCE. Each proposal varies in its approach and trade-offs and is at different stages of research and debate.
Jeremy Rubin proposed Check Template Verify (CTV) in BIP-119. This new opcode ensures only transactions matching a predefined template can spend the bitcoins. This could enable use cases like vaults, congestion control, and legacy multisig migration.
OP_CHECKSIGFROMSTACK (CSFS) was proposed by various developers, including Rubin. This allows the validation of a signature with a message and public key specified in the script, independent of the transaction. CSFS is considered more flexible and powerful than CTV in some ways, potentially enabling a broader range of applications.
LNHANCE proposes adding even more flexible scripting possibilities, including loops and conditional execution based on external data. This is a more conceptual and less formalized proposal compared to others.
