Research Summary: Bitcoin Covenants Unchained

BitML is the evolution of the work presented here. It’s essentially a compiler that can be used to create practical programs that make use of this technology.

In terms of use-cases, there are several that come to mind. One could create financial derivatives with complex clauses, or multi-layered spending policies to add additional security layers to their custody scheme, or even clawback techniques that can “recover” funds in the event of a hack.

It used to be that these programs had to be limited to 520-bytes with P2SH, but the advent of Taproot really makes these use cases feasible. Due to how Tapscript contracts are structured, any arbitrarily complex contract can be represented as a hash digest weighing only 256 bits.

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