Most people are unaware of the true nature of bitcoin. Once referred to as programmable money, there are many scripts for bitcoin that dictate how future bitcoin transactions can be spent. More specifically, these scripts can control who can spend the sent coins, along with other variables.
Blockstream Core technology developer Russell O’Connor said this week he has been testing out new scripts on a sidechain; Elements Alpha. Elements Alpha is known as the bitcoin testnet. O’Connor believes these scripts could add brand new functionality to the bitcoin world.
O’Connor calls these scripts covenants, and said that they could control, and restrict spending of the coins for user protection. This idea was previously examined by researchers Malte Moser, Ittay Eyal, and Emin Gun Sirer. One use for these new scripts could be to help users retain their coins in the event of online attacks.
“It is potentially a boon to bitcoin users who may be worried about losing their bitcoins of otherwise having them compromised or stolen”, Eyal stated.
Blockstream has taken a particular interest in two scripts, both of which check for script validities, and whether or not the transactions are spendable based on any restrictions. These are elements brand new to bitcoin. Currently the scripting system is simple, for the sake of security due to the fact that new additions can bring on unfavorable situations and take some time to test them out.
Researchers hope these new “opcodes” work as the foundation for many new functionalities that could eliminate exchanges and users alike from losing funds to thieves.
Blockstream wasn’t the originator of these new script ideas however. Researchers at Cornell are responsible for the idea. Researchers Malte Moser, Ittay Eyal and Emin Gun Sirer came up with the idea of bitcoin vaults that used the new scripts. These vaults enabled bitcoin users to pull funds back and store them safely in case of a cyber-attack. These vaults saw a new beginning in the wake of the Bitfinex hack where users lost around 120,000 bitcoins.
“If the attacker can’t gain control of the money, it takes away the motivation for stealing it in the first place,” Eyal noted.
He went on to say that:
These two requirements are often conflicting: if a user creates new keys to avoid losing them, that means it’s easier for them to be stolen. Meanwhile, if you create a smaller number of total keys, it’s easier to lose them.
So far, Blockstream tested the covenant scripts on the vault idea, but the potential for other uses in the future include lending. Since, researchers have been trying to figure out if their idea has enough viability to start implementing them into the bitcoin world; with the sidechain tests signifying a step in a positive direction.
Research continues on the subject, even though it has gained a skeptical following. Most notable is Peter Todd for questioning whether the functionality should be built in the infrastructure layer of the code or not, but there seemed to be some optimism from Todd about it working successfully.
“Trivially so, if implemented correctly,” Greg Maxwell, Bitcoin Core developer stated after he was asked if the new scripts would be safe or not.