The Bitcoin Core developers have been discussing the possibility of standardizing a method for storing arbitrary data in Bitcoin through a feature called the Taproot append.
According to the proposal of Joost Jager, an engineer and developer of Bitcoin and the Lightning network, currently “establishing an exact format [para el anexo] may require a significant amount of time.”
The Taproot annex is a format for adding data in an extension of the field known as Witness, where the validating signatures of common Bitcoin transactions are included. This is relevant today because the Taproot Transaction Witness is the space where the Ordinals NFTs are stored, a protocol that since its creation at the end of last year has generated all kinds of debates due to its effect on the network and in the markets. .
This free format “allows the usual transaction fields to be extended with new data records,” explains Antoine Riard, developer of Bitcoin, in a proposal submitted in July 2022 that served as the basis for Jager’s proposal. In addition, it foresees that these data may be subject to new validation rules.
In other words, the appendix is an optional part of Taproot transactions, the purpose of which is not yet defined, although it is ideally reserved for future soft forks. A notable aspect is that, in the annexes, transaction signatures and appended data are compromised or linked. This makes it impossible for you to change anything in the registry.
A free format for Taproot attachments
Jager acknowledges that there is one important factor that may slow the progress of the Taproot addendum, which seems to be widely accepted among developers for its potential. “Conversations about standardization seem to lean towards adopting a flexible format type-length-value (TLV)”, Explain. In short, if the annex uses this format to record any data in transactions, there would be many benefits; but the price would be the time that must be paid.
Meanwhile, the benefits of making the annex available in an unstructured form are obvious and immediate. By allowing developers to use the taproot plugin without delay, we can take advantage of its features today, without the need to wait for a longer standardization process to finish.
Joost Jager, Bitcoin and Lightning developer and engineer.
What Jager proposes is a free format, “without additional restrictions”, for all those attachments that begin with “0”. That is, they do not have instructions.
The developer concludes that there are at least 3 benefits to adopting a format like the one he proposes.
The former “opens the door for developers to use the Taproot addendum for a variety of applications right out of the boxthus eliminating the need to wait for the implementation of TLV or any other structured format.
The second consists of keeping the options open for future developments, while advancing in a standardization of the annex.
The third concerns the efficient use of space on the blockchain, since “unstructured data may require fewer bytes compared to a likely TLV format, which would require length encoding even when there is only one field.”
Although Riard’s proposal was not widely accepted, Jager’s idea could spark interest from other developers. In this sense, Greg Sanders, another developer of Bitcoin Core and Lightning, brought to the discussion table an idea that had been proposed by Riard himself in October of last year.
It is about the possibility of using attachments to test the LN-Symetry or Eltoo protocol, a tool that replaces the current transaction penalty system in the Lightning Network, which is executed when a user issues an old and already invalid string transaction of blocks, by a mechanism that automatically updates the payment channels. This way, no one can use an old channel update, showing a fake balance (something that could be exploited to steal BTC).
Eltoo needs to use a specific transaction type that could take advantage of the properties of attachments: soft fork SIGHASH_ANYPREVOUT, “a signing hash (sighash) where the identifier of the UTXO being spent is unsigned, allowing the signature to be used with any UTXO that is protected by a similar script (i.e. uses the same public key)” . UTXO stands for unspent transaction outputor ‘unspent output transaction’, in Spanish.
For his part, Jager replied that Vaults could be created to store time-locked bitcoin using pre-signed transactions with ephemeral keys. the developer He suggested that there may be previous research in Bitcoin Core that fixes the attachment retransmission issue in some multi-party protocols.
In any case, the developers talked about how the attachments could increase the efficiency of witnesses by being able to include arbitrary data without committing themselves financially, beyond the expense generated by that specific transaction. Somehow, like the Ordinals protocol does. “I think the real advantage is that it eliminates the need to post and pay for the commit transaction in the first place. Any spend from a parent UTXO can be supplemented with arbitrary data in a single transactionJagger added.
Certainly, when talking about arbitrary data in Bitcoin, the first thing that comes to mind is NFTs and BRC-20 tokens that have a great influence in the ecosystem today. And, in that sense, it is impossible to predict what would be the ultimate fate of a standard that provides similar utility. Only time will tell what has the most value to people who use Bitcoin.