Hi, I have a proposal for implementing bitcoin vaults in a way that does not require any soft-forks or other software upgrades, although it could benefit from SIGHASH_NOINPUT which I'll describe later.
I call them pre-signed vaults. Vault definition ================ Here, a vault is defined as a transaction setup scheme that binds both the user and the attacker to always using a public observation and delay period before a weakly-secured hot key is allowed to arbitrarily spend coins. This is the same definition previously used. During the delay period, there is an opportunity to initiate recovery/clawback which can either trigger deeper cold storage parameters or at least reset the delay period to start over again for the same keys. One of the important components of this is the delete-the-key pre-signed transaction concept, where only a single transaction is (pre)signed before deleting the key. This is basically an emulation of a covenant and enforces a certain outcome. Background and motivation ========================= I was looking at Eyal and Sirer's 2016 vaults paper , and I saw this headscratcher: > Vault transactions use a delay mechanism. We note that vault transactions > cannot be implemented with existing timing mechanisms such as > CHECKLOCKTIMEVERIFY opcode or transaction locktime. This was probably written before the introduction of OP_CHECKSEQUENCEVERIFY. Still, a viable construction would have more steps than just using OP_CSV. They were probably not thinking about what those steps might be, because in the context of the paper they were proposing a bitcoin vault implemented using recursive consensus-enforced covenants via a new opcode, which obviously cannot be deployed without an upgrade fork. Covenants have been discussed for years, but require new opcodes or other consensus-enforcement changes. Relative locktimes are useful here because there is no knowledge as to when the transactions might be broadcasted in the future. The delays need to be relative to after the transaction is included in the blockchain, not to setup initialization time. Also, from : > We show that a [vault transaction] mechanism is currently not possible in all > cryptocurrencies [...] Bitcoin's scripting language requires support for > covenants. I haven't seen any previous proposal for how to implement recursive bitcoin vaults without a fork and without a covenant. After asking around, I am pretty sure this is somewhat novel. The closest I guess is . Vaults are particularly interesting as a bitcoin cold storage security mechanism because they enable a publicly observable delay period during which time a user could be alerted by a watchtower that a thief might be in the process of stealing their coins, and then the user may take some actions to place the coins back into the vault before the relative timelock expires. There seems to be no way to get this notification or observation period without a vault construction. It might have been assumed it required a covenant. Having a vault construction might go a long way to discourage would-be attackers, on principle that the attacker might be incapable of recovering their cost-of-attack because the recovery mechanism can lock up the coins indefinitely. Griefing or denial-of-service would still be possible, of course, but with multisig there might be some ways to put a halt to that as well. I am working under the assumption that the attacker knows that the user is a vault user. Vaults ====== The idea is to have a sequence of pre-generated pre-signed transactions that are generated in a certain way. The basic components are a vaulting transaction that locks coins into a vault, a delayed-spend transaction which is the only way to spend from a vault, and a re-vaulting transaction which can recover/clawback coins from the delayed-spend transaction. The security of this scheme is enforced by pre-signing transactions and deleting private keys, or with the help of SIGHASH_NOINPUT then there's another scheme where private keys are provably never known. This enforces that there's only a specific set of possible outcomes at every step of the vault. Some examples of what the set of broadcasted transactions might look like in regular usage: coins -> VT -> DST -> exit via hot wallet key coins -> VT -> DST -> RVT coins -> VT -> DST -> RVT -> DST -> ... coins -> VT -> ... -> RVT998 -> nuclear abort where: VT = vault transaction DST = delayed-spend transaction RVT = re-vaulting transaction The delayed-spending transaction would have a single output with a script like: ( 30 days AND hot wallet key OR 10 days AND re-vaulting public key OR 1 day AND 4-of-7 multisig OR 0 days and super-secure nuclear abort ragequit key ) Another diagram: VT_100 -> DST -> (optionally) RVT -> coins are now in VT_99 VT_99 -> DST -> (optionally) RVT -> coins are now in VT_98 ... VT_1 -> burn-all-coins nuclear abort ragequit (final) Definitions =========== Transactions and components: * Commitment/funding vault setup transaction. Signed after setting up the transaction tree, and it is broadcasted whenever funds are to be placed into the vault. * Delayed-spend transaction. Signed during the vault transaction tree setup, and it is broadcasted when the user wants to withdraw coins from cold storage or otherwise manipulate the coins. The output script template used by the delayed-spend transaction was defined earlier. * Hot wallet key: Somewhat insecure key. This can also be multisig using multiple hot keys. * Re-vaulting key: It is important to note that the private key either never existed (SIGHASH_NOINPUT + P2WPK for the re-vaulting transaction) or the private key was deleted after pre-signing the re-vaulting transaction. * 4-of-7 multisig: This is a group of differently-motivated individuals who are responsible for signing transactions. This multisig group is not necessry to describe the technique, I just think it's a useful feature for a vault to include. * Nuclear abort key: Also unnecessary. This is a key for which only a single signed transaction will ever exist, and that single transaction will spend to a proof-of-burn key like 0x00. This key must be extremely secure, and if there is any doubt about the ability to keep such a key secured, then it is better to not include this in the protocol. Alternatively, maybe include it as an option 50 layers down in the revaulting sequence. * Nuclear-abort pre-signed transaction. This is signed during transaction tree setup, before constructing the delayed-spend transaction. It is broadcasted only if the user wants to provably relinquish coins forever without giving the attacker any coins. * Re-vaulting transaction. This is where the magic happens. The re-vaulting transaction is signed during transaction tree setup, before constructing the delayed-spend transaction for the parent vault. The re-vaulting transaction is broadcasted when someone wants to prevent a coin withdrawal during the public observation delay period. The re-vaulting transaction spends the delayed-spend transaction outputs. It has a single output with a script created by running the entire vault setup function again. Hence, when the re-vaulting transaction is confirmed, all of the coins go back into a new identically-configured vault instead of being relinquished through the delayed-spend transaction timeout for hot wallet key signing. * Special case: final transaction. This is the very first pre-signed transaction during setup, and the transaction spends the coins using any provable burn technique. This is broadcasted only at the end of the game, as an ultimate abort and forfeiture of coins without giving in to an adversary. It's similar to the nuclear-abort ragequit transaction but it sits at the same place that a delayed-spend transaction would, at the very end of the rainbow or yellow brick road. Example log during vault setup ============================== When running the recursive vault setup function, the created artifacts (in order) will look like: 1) choose one of: (first iteration) pre-signed burn-all-coins nuclear abort ragequit (final) (all others) a new vault setup transaction spendable only by its delayed-spend transaction 2) pre-signed re-vaulting transaction sending to vault setup or final transaction, with a unique private key 3) pre-signed delayed-spend transaction, with a unique private key 4) vault transaction spendable only by the delayed-spend public key Pseudocode ========== In pseudocode (where PTX is a pre-signed transaction function with private key deletion): VT(counter, *args, **kwargs) = if counter == 0: DST = PTX("burn-all-coins") else: next_vault = VT(counter-1, *args, **kwargs) revaulting = PTX("only spendable by next_vault public key") DST = PTX("DST policy including revaulting and other conditions") vault = PTX("spendable only by this DST") return vault Pre-signed transactions ======================= What has been known for a while is that a covenant can be somewhat emulated using a pre-signed transaction where the user then deletes the private key, enforcing that the user's chosen policy must be enforced since there is only one existing option and there will only ever be one option. Such a scheme has been previously described for simple one-time and chained vaults . I have learned that the author has an implementation that is in preparation, for a non-recursive version. Note that a series of pre-signed transactions can be considered to be an emulation of a covenant. Imagine a linear chain of pre-signed transactions where each hop has a relative locktime before being able to broadcast the next transaction. To recover the coins at the end of the rainbow, one would need to broadcast each sequential transaction in order and wait for the relative timelocks to expire each time. Here, covenants provide something like an undo for bitcoin, but only between pre-determined addresses and scripts. Fees for pre-signed transactions ================================ There's a few different techniques to talk about: 1) SIGHASH_SINGLE|SIGHASH_ANYONECANPAY to let someone add inputs and outputs. This can get pretty complex though. 2) Add a zero-value OP_TRUE output and let anyone spend the zero-value output and attach a child-pays-for-parent (CPFP) transaction to pay for everything. 3) Pre-sign a variety of different possible fee rates. Unfortunately this involves an explosive blow-up in the amount of transaction data to generate. It might actually be a reasonable blow-up amount, only resulting in a few hundred megabytes of additional data. But given the other options, this is unnecessary. Delete the key (for pre-signed transactions) ============================================ The delete-the-key trick is simple. The idea is to pre-sign at least one transaction and then delete the private key, thus locking in that course of action. Unfortunately, delete-the-key doesn't really work for multisig scenarios because nobody would trust that anyone else in the scheme has actually deleted the secret. If they haven't deleted the secret, then they have full unilateral control to sign anything in that branch of the transaction tree. The only time that delete-the-key might be appropriate would be where the user who deletes the key and controls the key during the setup process is also the sole beneficiary of the entire setup with the multisig participants. Alternative fee rates are easier to deal with using delete-the-key, compared to a technique where the private key never existed which can only be used to sign one fee rate per public key, requiring an entirely new vault subtree for each alternative fee rate. With delete-the-key, the alternative fee rates are signed with the private key before the private key is deleted. Multisig gated by ECDSA pubkey recovery for provably-unknown keys ================================================================= A group can participate in a multisig scheme with provably-unknown ECDSA keys. Instead of deleting the key, the idea is to agree on a blockheight and then select the blockhash (or some function of the chosen blockhash like H(H(H(blockhash)))) as the signature. Next, the group agrees on a transaction and they recover the public key from the signature using ECDSA pubkey recovery. A pre-signed transaction is created, which will trigger the start of the public observation period described earlier and also start the clock for the bip112 relative timelock on its output. In the output script, an OR branch is added that enables the use of a re-vaulting key which could also be its own separate multisig construction. This is incompatible with P2WPKH because the P2WPKH spending scriptSig needs to have the pubkey (to check the hash of the pubkey against the pubkeyhash in the scriptPubKey), which in turn makes it incompatible with ECDSA pubkey recovery which requires a hash of the message. However, with P2WPK and SIGHASH_NOINPUT instead of P2WPKH it could conceivably work. SIGHASH_NOINPUT is required because otherwise the input includes a txid which references the public key. With P2WPK, the scriptSig only needs a signature and not a public key. Note that what would be required is a version of SIGHASH_NOINPUT that does not commit to the public key, and I think a few of the NOINPUT proposals are committing to the public key. Alternatively, there may be some constructions using the 2-party ECDSA techniques or m-n party ECDSA techniques. Deploying exceedingly large scripts =================================== A brief interlude to share a somewhat obvious construction. I haven't seen this written down yet. Suppose there is a bitcoin script that someone is interested in using, but it far exceeds the size limits and sigop limits. To fix this, they would split up the script into usable chunks, and then use the delete-the-key mechanism (or the other one) to create an OR branch that is signable by a single key for which only a single signature is known. That new pre-signed transaction would spend to a script that has the output with the remainder of the script of interest. Re-vaulting or clawback clauses can be added to that output as well, but spending back to the original root script will only work by generating new scripts and keys (since the final hash isn't known until the whole tree is constructed, it's a dependency loop). Recursively-enforced multi-party multisig bitcoin vaults ======================================================== Ideally, to enforce a covenant with impossible fairy dust magic, we would ask for a bitcoin transaction that could be self-referential because the only-one-signature-ever trick requires that the signed message be known before producing the signature, and the signature has to be known before the public key can be known, and the public key would have to be included in the self-referential message/transaction hash value. So, that's a dependency loop and it doesn't work. It would be interesting to explore a variation of this idea with masking, such that a value X can be replaced by a hash over the whole script with the X value, even though the real script will have the hash. Someone else can figure that one out for me :-). Instead of the self-referential values attempting to reference the same script that is in the process of being constructed, an alternative is to use the same script template but populate it with different parameters. The script template gets reused over and over again, all the way down the tree, until the final transaction which could be >100 years into the future once done adding up all the relative locktimes. In fact, to create and populate this terrifying recursive script tree, the final transaction needs to be created first, and then it is given as input to the script template function and that output is then given to the script template function itself-- and so on. At each stage, there are additional pre-signed transactions and values to remember. This can be written as: final_transaction = TX(spend to 0x0000 to burn the coins) initial_transaction = F(F(...F(final_transaction)) (This is missing parameters to indicate to the function what the spending keys requirements are to be.) See earlier explanation for more details. Each call to the template populating function produces values that each must be preserved for a very long time. It is less safe to store all of the pre-signed transactions together at the same time, but more convenient. With less redundancy, there is an increased chance of losing data over time, which could render the coins completely frozen. This doesn't particularly worry me because forgetting a key has that property already, and this could be likened to hundreds of megabytes of extra key data or something. Unlike the much smaller covenant-based (opcode-based covenant) vault construction, the multiple layers here can be separately stored and protected, which might be able to protect against an adversary that has stolen some of the re-vaulting keys but not all of them. Optimizations can be made to store parameters for generating the remainder of the tree, such as using deterministic key derivation, such that megabytes of data wouldn't need to be long-term stored. Only the initial parameters would need to be stored. Financial privacy for custody ============================= One of the concerns raised in  is that if all coins at an exchange are stored together in the same vault, then attackers would be able to learn about access control policies by observing scripts and keys. Some privacy can be recovered by using segregated vaults, at the cost of additional setup complexity and keeping more data in long-term storage. However, note that I think vaults are also useful for personal cold storage solutions. Fail-deadly mechanism ===================== An early nuclear abort option can be added to these scripts. This idea was explored in . This would be a very cold very secret key that would abort the re-vaulting procedure and send all coins to a (provably) nonsense key. This allows a vault user to destroy the coins instead of continuously monitoring the bitcoin blockchain for the rest of his life. The attacker can't recover their cost of attack if they never get the coins, and this eliminates an entire class of potential attackers who are directly interested only in financial gain. The disadvantage is that if the attacker finds the secret key for the fail-deadly mechanism and uses it, then all of the coins are gone forever. Multisig variations =================== The re-vaulting key could be the same key at each layer, or only sometimes the same key, or always a unique key stored separately in another secure location. Additionally, these re-vaulting keys could be subjected to multisig schemes, as well as Shamir secret sharing schemes or other secret sharing schemes. The idea of adding the 4-of-7 multisig component is to avoid griefing situations, at the cost of the additional security requirements for the 4-of-7 multisig group. Key rotation for vaults ======================= Keeping the same hot wallet key for 100 years is not advisable. Rotate the keys by setting up a new vault construction and initiating a withdrawal transaction from the old vault to the new vault. Single-use seals ================ This proposal may have inadvertedly demonstrated a practical way to implement Peter Todd's single-use seals concept . I am hesitant to say so, though, because I think he would ask for a more sophisticated way to verify seal closure. Paid defection ============== It might be advisable to add small rewards for evidence of defection amongst multiparty multisig setups. Besides amounts spendable by individual keys from a multisig setup, it may be possible to use a zero-knowledge contingent payment for a zero-knowledge statement like: I have a signature s over some message m which validates for pubkey pk where pk is a member of the multisig group. Then the zkcp transaction would pay for knowledge of defectors. The zkcp procedure would require interaction with the defector, while the direct pubkey method would not. This is similar to companies paying employees to quit when they value the payment over the value of continued employment. Handling change =============== It is important to note that this vault setup is one-time and once-only. There must only ever be one deposit into one vault. Also, spending some coins would require sending the change amount back into a new vault. Alternatively, upfront work can be done to set a regular withdrawal stipend or assumption about how many coins are left, such that the transaction tree can be pre-generated for those possibilities, hence cutting down on future vault reinitializations. It would also be possible to commit upfront to only ever working in some minimum increment number of bitcoin or something. It is very important to only fund the vault once, and only with the amount that was configured when setting up the vault. References ==========  https://fc16.ifca.ai/bitcoin/papers/MES16.pdf  http://www0.cs.ucl.ac.uk/staff/P.McCorry/preventing-cryptocurrency-exchange.pdf  http://web.archive.org/web/20180503151920/https://blog.sldx.com/re-imagining-cold-storage-with-timelocks-1f293bfe421f?gi=da99a4a00f67  https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2017-December/015350.html or https://diyhpl.us/wiki/transcripts/building-on-bitcoin/2018/single-use-seals/ or https://petertodd.org/2016/closed-seal-sets-and-truth-lists-for-privacy Acknowledgements ================ * Jeremy Rubin for pointing out something embarrassingly broken in an earlier draft. * Bob McElrath for telling me to use SIGHASH_NOINPUT which I proceeded to promptly forget about. * Andrew Poelstra for the OP_TRUE trick. * Joe Rayhawk for paid defection. * Tadge Dryja for pointing out a few differences between SIGHASH_NOINPUT proposals. Thank you, - Bryan http://heybryan.org/ _______________________________________________ bitcoin-dev mailing list firstname.lastname@example.org https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev