Miniscript and its importance. Bitcoin Tech Talk Issue #188

Bitcoin has had, from its inception a smart contract language called Script. It’s an extensive non-Turing-complete language similar to Forth. While the language has a lot of capabilities, what we’ve found over the past 11 years is that the vast, vast majority of transactions on the Bitcoin network use only a small set of well-defined smart contracts. These are all very useful smart contracts, like single-key locked (p2pkh, p2wpkh), multisig (often done using p2sh or p2wsh) and some HTLC for lightning. This is a bit of a strange situation as most of the capabilities of Script aren’t being used at all.

For example, there are OP codes (or smart contract program instructions) like 2DUP or SWAP which are rarely, if ever, used. There are two reasons for this. The first is that many of these OP codes are not useful for much. That is, they allow for smart contracts that aren’t very interesting to the market. The second is that some such OP codes are useful, but they haven’t had an application take advantage of it. Something like OP_CHECKLOCKTIMEVERIFY is very useful, but few, if any, wallets allow users to create a time locked address in this manner.

Part of why this is the case is that Script is hard to reason about. That is, Script is difficult to compose or evaluate when you look at a bunch of OP codes. The conditions to satisfy a particular script are not exactly obvious and that mean it’s hard to communicate with the user what’s actually going on. In other words, the utility of an OP code is hampered by the difficulty of reasoning about it.

This is where Miniscript comes in. Miniscript is a subset of Script that make it easy to reason about what the conditions to satisfy a smart contract might be. And this is where we can bridge that gap between utility and application writing. Once Bitcoin applications (particularly wallets) can speak Miniscript instead of Script, it will be much easier to write user interfaces that show the user what conditions they are needed to unlock Bitcoins.

What’s new this week is that Magical Bitcoin has written a playground for Miniscript. This is a very useful way to get a feel for the policy language that Miniscript is built off of. As we create better and better security systems, using the full suite of tools available will become more critical. Miniscript is a significant step toward that reality and tools like this will help in its adoption.

Bitcoin

Tobias Huber has published a paper about Bitcoin Bubbles as Innovation Accelerators. The paper has a lot of insights about technology and economics working together to be reflected in the Bitcoin price. The bubbles feature prominently, and the paper makes the argument that Bitcoin’s specific properties led to the speculative adoption and explain the current monetization.

The popular bitcoin.org domain name will be transferred by the end of the year according to the current owner, Cobra-Bitcoin. The main candidates seem to be Will Binns and Craig Watkins, who are long-term contributors to bitcoin.org. This will be welcome news to all those familiar with the drama around that domain, which Satoshi left to Cobra shortly before disappearing.

Coinmetrics has some relevant statistics for the past few months. The article covers how stablecoins gone up significantly in market cap since March 12, which indicates more money flowing into the space. In addition, it also looks like a lot more people are choosing to hold their own keys instead of keeping their coins on an exchange.

Lightning

Lightning Labs has announced an upgrade to loop, multi-loop. Loop is a way to do submarine swaps, or getting paid out of or refilling a payment channel on lightning on chain. Multi-loop is the logical consequence of Multi-path payments, meaning that instead of getting paid out/refilling a single channel with a submarine swap, you can now get paid out or refill multiple channels with a single on-chain transaction. This is a pretty big deal as the channels you open can be much longer-lived and require much fewer on-chain transactions on a per-channel basis going forward. As on-chain transaction fees can be amortized over many more channels and many more transactions, lightning transactions become much more economical as a result.

A pull request to Bitcoin Core shows how you can download Bitcoin blocks over the Lightning Network! Instead of using the normal Bitcoin networking module (or TOR or radio or satellite), the transport layer uses normal Lightning connections to convey block headers to each other. This is a bit like Bitcoin inception in that this is Bitcoin data sent through Lightning running on top of Bitcoin. One of the most underrated aspects of the Lightning network is that it’s useful for general purpose peer-to-peer networking, which was the original design of the internet. As Lightning nodes have some Bitcoin amounts associated with them, this makes Sybil attacks against them much more expensive and creates the right sort of network for all sorts of network transmission like encrypted chats and Bitcoin block data.

Economics, Engineering, Etc.

Allen Farrington has a nice review of what the halving means from what he calls a spiritual perspective. He argues that we are witnessing Bitcoin “trolling” its way to victory. I agree with the article in calling the immutability of Bitcoin a “spiritual” perspective, as the very nature of Bitcoin is not physical, but metaphysical. The fact that Bitcoin has worked all this time and that the halvening happened without any central intervention itself is remarkable. The steadiness and predictability in an uncertain world is a large part of what gives Bitcoin value.

Reddit has launched an ERC-20 token for two of its subreddits. These are specific to the two subreddits chosen, r/Cryptocurrency and r/FortniteBR and they are meant to be used to buy stickers, flair and reddit gold to help support the reddit website. This apparently was tried before on r/ethtrader but ended up causing a lot of misaligned incentives leading to a split of that community. This seems like an idea that may have worked to better shore up Reddit’s finances a few years ago, but right now seems hopelessly late and headed for unnecessary drama.

Gilles Cadignan makes the case for Bitcoin from a technical perspective, that is one of building on the best foundation. He makes the important point that the most important property of a foundation is its security and that altcoins represent additional complexity that necessarily compromise security. He also amusingly refers to Bitcoin as an “immaculate conception” and altcoins as “original sin.” There’s probably a lot of mileage left in that analogy which I hope Gilles pursues.

Unchained Capital has an article on the resilience to exponential change that Bitcoin has as a core property. This is one of the most remarkable properties of Bitcoin and the article discusses in depth how possible technological improvements are cleverly accounted for, leading to a system that remains impervious to disruption.

Podcasts, etc.

I did an epic live stream with Tone on Monday for 12 hours straight. Also on Tone’s channel was a news show covering some of the reddit stuff, etc and a show debunking a video claiming Adam Back is Satoshi. I also did my weekly show on the BitMex fee situation and a readthrough of Hal Finney’s Reusable Proof of Work.

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Fiat delenda est.