{"type":"rich","version":"1.0","author_name":"npub17rld56k4365lfphyd8u8kwuejey5xcazdxptserx03wc4jc9g24stx9l2h","author_url":"https://nostr.ae/npub17rld56k4365lfphyd8u8kwuejey5xcazdxptserx03wc4jc9g24stx9l2h","provider_name":"njump","provider_url":"https://nostr.ae","html":"📅 Original date posted:2022-02-17\n📝 Original message:On Fri, Feb 11, 2022 at 12:12:28PM -0600, digital vagabond via bitcoin-dev wrote:\n\u003e Imagine a covenant design that was\n\u003e flexible enough to create an encumbrance like this: a script specifies a\n\u003e specific key in a multisig controlled by some authority figure (or a branch\n\u003e in the script that would allow unilateral control by such an authority),\n\u003e and the conditions of the covenant would perpetually require than any spend\n\u003e from the covenant can only be sent to a script involving that key from said\n\u003e authority, preventing by consensus any removal of that central authorities\n\u003e involvement in control over that UTXO.\n\n\u003e I know that such a walled garden could easily be constructed now with\n\u003e multisig and restrictions on where coins can be withdrawn to from exchanges\n\u003e or whatever [...], but I think the important distinction\n\u003e between such non-consensus system designed to enforce such restrictions and\n\u003e a recursive covenant to accomplish the same is that in the case of a\n\u003e multisig/non-consensus based system, exit from that restriction is still\n\u003e possible under the consensus rules of the protocol.\n\nI think that sort of encumberance is already possible: you send bitcoin\nto an OP_RETURN address and that is registered on some other system as a\nway of \"minting\" coins there (ie, \"proof of burn\") at which point rules\nother than bitcoin's apply. Bitcoin consensus guarantees the value can't\nbe extracted back out of the OP_RETURN value.\n\nI think spacechains effectively takes up this concept for their one-way\npeg:\n\n  https://bitcoin.stackexchange.com/questions/100537/what-is-spacechain\n\n  https://medium.com/@RubenSomsen/21-million-bitcoins-to-rule-all-sidechains-the-perpetual-one-way-peg-96cb2f8ac302\n\n(I think spacechains requires a covenant construct to track the\nsingle-tx-per-bitcoin-block that commits to the spacechain, but that's\nnot directly used for the BTC value that was pegged into the spacechain)\n\nIf we didn't have OP_RETURN, you could instead pay to a pubkey that's\nconstructed from a NUMS point / or a pedersen commitment, that's (roughly)\nguaranteed unspendable, at least until secp256k1 is broken via bitcoin's\nconsensus rules (with the obvious disadvantage that nodes then can't\nremove these outputs from the utxo set).\n\nThat was also used for XCP/Counterparty's ICO in 2014, at about 823 uBTC\nper XCP on average (depending on when you got in it was between 666\nuBTC/XCP and 1000 uBTC/XCP apparently), falling to a current price of\nabout 208 uBTC per XCP. It was about 1000 uBTC/XCP until mid 2018 though.\n\n  https://counterparty.io/news/why-proof-of-burn/\n  https://github.com/CounterpartyXCP/Documentation/blob/master/Basics/FAQ-XCP.md\n\nThese seem like they might be bad things for people to actually do\n(why would you want to be paid to mine a spacechain in coins that can\nonly fall in value relative to bitcoin?), and certainly I don't think\nwe should do things just to make this easier; but it seems more like a\n\"here's why you're hurting yourself if you do this\" thing, rather than a\n\"we can prevent you from doing it and we will\" thing.\n\nCheers,\naj"}