Bitcoin (BTC) educator, author, and entrepreneur Andreas Antonopoulos has voiced concern regarding a possible far-reaching consequence of the Bitcoin Improvement Proposal (BIP) 119 that he says could “kill” Bitcoin.
Proposed by Jeremy Rubin, a Bitcoin developer and founder of Bitcoin research and development organization Judica, BIP-119, also known as CheckTemplateVerify (CTV), is a soft fork proposal that aims to enable new use cases for the Bitcoin network by adding a type of “covenant.”
A covenant is similar to what is known as a smart contract on the Ethereum (ETH) blockchain. In simple terms, a covenant is a mechanism that would enable users to enforce conditions on the way BTC coins within a wallet can be transferred in the future.
As of now, Bitcoin programmability is largely limited to the base level of transactions. For instance, using Bitcoin Script, a programmer can restrict what can be done before a transaction is spent. Similarly, using a timelock, one can set a specific amount of time before a transaction can be spent.
Covenant aims to bring more programmability to Bitcoin by allowing programmers to control how bitcoins can be spent in the future. Using covenant, one would be able to whitelist or blacklist certain addresses, restricting where BTC can be spent even for the person who has the key to those bitcoins.
While the author of BIP-119 claims the proposal for CTV largely includes simple covenants, Antonopoulos has argued that the proposal could potentially enable unexpected or unintended consequences.
More specifically, Antonopoulos noted that the proposal could “kill” Bitcoin if it brings support for recursive covenants. A recursive covenant is when a programmer not only limits the next transaction but also “limits it in such a way that it limits the transaction after it, which limits the transaction after it, etc,” he said.
This would create very significant challenges for Bitcoin. For instance, using a recursive covenant, a programmer could limit the list of addresses where BTC could be sent in the future. This way, that specific BTC would no longer be fungible and would become distinct from other bitcoins that can be sent to everyone, basically creating a new category of bitcoins.
Moreover, when users have the ability to blacklist certain addresses, there is a high probability that governments and regulators would step in and start banning some addresses.
“And then you will end up with essentially PayPal, only not very scalable,” Antonopoulos said. “This is how you kill Bitcoin.”
It is worth noting that this is the worst-case scenario. Nonetheless, there is more controversy around the proposal.
More notably, Rubin claims that BIP-119 is ready and has asked for the upgrade to be implemented via the speedy trial process, where miners would have three or four months to signal support for the proposal. During this period, if more than 95% of miners vote in support of the proposal during any two weeks period then it will be activated.
However, for a proposal to be implemented, it needs massive support from users, developers, wallets, and exchanges as well – not only miners. And if a proposal gets through without support from all these categories, it could even result in a hard fork.
As of now, the proposal does not seem to have overwhelming support from all these categories, also known as constituencies of consensus, Antonopoulos said.
He added that the proposal also needs extensive testing, reviewing, and auditing before it can be implemented.
Echoing this point of view, Adam Back, co-founder of the blockchain technology company Blockstream, said that the proposal needs a thorough review. He also argued that developers should consider other alternatives before proceeding.
“It’s disappointing to see someone make a run at bypassing or ignoring review or whatever the rationale,” he tweeted. Back stated that there are “multiple alternatives that have been proposed on the dev-list.”
Similarly, Matt Corallo, also a Blockstream co-founder and open source engineer at Block/Spiral, opined that the push for BIP-119 feels “wrong in just about every way.” “Instead of collaborative engineering it feels like “I built this, lets do it” while ignoring any feedback,” he wrote.
Rubin, however, has listed a number of reasons why he thinks the proposal is valuable. Among the more notable advantages, the proposal would improve Bitcoin programmability, enabling payments to be scheduled for a specific date or multiple dates.