A group of developers has discovered a new way to add programming features to the Bitcoin blockchain called “covenants.” These covenants will enable the introduction of new wallet and vault functions and make second layer protocol development more efficient. The best part is that the new process does not require any changes to Bitcoin’s core code, thus avoiding the consensus-requiring and complicated update process known as a soft fork.
A “covenant” is a programming mechanism that allows certain restrictions to be imposed on the use of transactions or the transfer of funds. The new technology has been presented in a study called ColliderScript: Covenants in Bitcoin via 160-bit hash collisions, and its main aim is to increase the programmability of the Bitcoin blockchain.
This will help it catch up with the opportunities offered by Ethereum without violating Bitcoin’s strong security fundamentals. The research was led by Ethan Heilman, who previously proposed a technique called OP_CAT that also increases programmability. However, that solution would have required a software update.
The new method was developed by Victor Kobolov and Avihu Levy from the StarkWare project and Andrew Poelstra, head of research at Blockstream. StarkWare emphasized that the solution does not require new opcodes such as OP_CTV or OP_CAT. The new approach is still computationally intensive, but the developers believe there are significant optimization opportunities.
Robin Linus, developer of the Bitcoin programmability projects BitVM and BitVM2, called the new approach a “brilliant idea” but noted that it is not practical in its current form. The cost of implementing such “covenants” is estimated to be more than 10 million dollars. However, he hopes further developments will make practical application of the method possible.
