See
https://gist.github.com/chris-belcher/7257763cedcc014de2cd4239857cd36e
for the latest version of this BIP.
<pre>
BIP: TBD. Preferably a two-digit number to match the bip44, bip49,
bip84, bip86 family of bips
Layer: Applications
Title: Derivation scheme for storing timelocked address fidelity
bonds in BIP39 phrases
Author: Chris Belcher <belcher at riseup dot net>
Status: Draft
Type: Standards Track
Comments-Summary: No comments yet.
Created: 2022-04-01
License: CC0-1.0
</pre>
== Abstract ==
This BIP defines the derivation scheme for BIP39 seed phrases which
create timelocked addresses used for creating fidelity bonds. It also
defines how to sign fidelity bond certificates, which are needed when
using fidelity bonds that are stored offline.
== Motivation ==
Fidelity bonds are used to resist sybil attacks in certain decentralized
anonymous protocols. They are created by locking up bitcoins using the
`OP_CHECKLOCKTIMEVERIFY` opcode.
It would be useful to have a common derivation scheme so that users of
wallet software can have a backup of their fidelity bonds by storing
only the BIP39 seed phrase and a reference to this BIP. Importantly the
user does not need to backup any timelock values.
We largely use the same approach used in BIPs 49, 84 and 86 for ease of
implementation.
This standard is already implemented and deployed in JoinMarket. As most
changes would requires a protocol change of a live system, there is
limited scope for changing this standard in review. This BIP is more
about documenting something which already exists, warts and all.
== Background ==
=== Fidelity bonds ===
A fidelity bond is a mechanism where bitcoin value is deliberately
sacrificed to make a cryptographic identity expensive to obtain. A way
to create a fidelity bond is to lock up bitcoins by sending them to a
timelocked address. The valuable thing being sacrificed is the
time-value-of-money.
The sacrifice must be done in a way that can be proven to a third party.
This proof can be made by showing the UTXO outpoint, the address
redeemscript and a signature which signs a message using the private key
corresponding to the public key in the redeemscript.
The sacrificed value is an objective measurement that can't be faked and
which can be verified by anybody (just like, for example PoW mining).
Sybil attacks can be made very expensive by forcing a hypothetical sybil
attacker to lock up many bitcoins for a long time. JoinMarket implements
fidelity bonds for protection from sybil attackers. At the time of
writing over 600 BTC in total have been locked up with some for many
years. Their UTXOs and signatures have been advertised to the world as
proof. We can calculate that for a sybil attacker to succeed in unmixing
all the CoinJoins, they would have to lock up over 100k BTC for several
years.
=== Fidelity bonds in cold storage ===
It would be useful to be able to keep the private keys of timelocked
addresses in cold storage. This would allow the sybil resistance of a
system to increase without hot wallet risk. For this reason there is an
intermediate keypair called the certificate.
UTXO key ---signs---> certificate ---signs---> endpoint (e.g. IRC
nickname or tor .onion hostname)
The certificate keypair can be kept online and used to prove ownership
of the fidelity bond. Even if the hot wallet private keys are stolen,
the coins in the timelocked address will still be safe, although the
thief will be able to impersonate the fidelity bond until the expiry.
=== Fixed timelock values ===
It would be useful for the user to avoid having to keep a record of the
timelocks in the time-locked addresses. So only a limited small set of
timelocks are defined by this BIP. This way the user must only store
their seed phrase, and knowledge that they have coins stored using this
BIP standard. The user doesn't need to remember or store any dates.
== Specifications ==
This BIP defines the two needed steps to derive multiple deterministic
addresses based on a [[bip-0032.mediawiki|BIP 32]] master private key.
It also defines the format of the certificate can be signed by the
deterministic address key.
=== Public key derivation ===
To derive a public key from the root account, this BIP uses a similar
account-structure as defined in BIP [[bip-0084.mediawiki|44]] but with
<tt>change</tt> set to <tt>2</tt>.
<pre>
m / 84' / 0' / 0' / 2 / index
</pre>
A key derived with this derivation path pattern will be referred to as
<tt>derived_key</tt> further
in this document.
For <tt>index</tt>, addresses are numbered from 0 in a sequentially
increasing manner, but index does not increase forever like in other
similar standards. The index only goes up to <tt>959</tt> inclusive.
Only 960 addresses can be derived for a given BIP32 master key.
Furthermore there is no concept of a gap limit, instead wallets must
always generate all 960 addresses and check all of them if they have a
balance and history.
=== Timelock derivation ===
The timelock used in the time-locked address is derived from the
<tt>index</tt>. The timelock is a unix time. It is always the first of
the month at midnight. The <tt>index</tt> counts upwards the months from
January 2020, ending in December 2099. At 12 months per year for 80
years this totals 960 timelocks. Note that care must be taken with the
year 2038 problem on 32-bit systems.
<pre>
year = 2020 + index // 12
month = 1 + index % 12
</pre>
=== Address derivation ===
To derive the address from the above calculated public key and timelock,
we create a <tt>redeemScript</tt> which locks the funds until the
<tt>timelock</tt>, and then checks the signature of the
<tt>derived_key</tt>. The <tt>redeemScript</tt> is hashed with SHA256 to
produce a 32-byte hash value that forms the <tt>scriptPubKey</tt> of the
P2WSH address.
redeemScript: <timelock> OP_CHECKLOCKTIMEVERIFY OP_DROP
<derived_key> OP_CHECKSIG
witness: <signature> <pubkey>
scriptSig: (empty)
scriptPubKey: 0 <32-byte-hash>
(0x0020{32-byte-hash})
=== Certificate message derivation ===
To create a certificate needed for using fidelity bonds in cold storage,
another application external to this standard will create a ECDSA
keypair. The public key of this keypair and an integer called the
`expiry` will be used to create a certificate message.
The certificate message is defined as:
'fidelity-bond-cert|' + cert_pubkey + '|' + cert_expiry
where + denotes concatenation. `cert_pubkey` is encoded as a hex string,
and `cert_expiry` is encoded as an ascii string of the integer.
This certificate message is then prepended with the string `\x18Bitcoin
Signed Message:\n` and a byte denoting the length of the certificate
message. The whole thing is then signed with the private key of the
<tt>derived_key</tt>. This part is identical to the "Sign Message"
function which many wallets already implement.
Almost all wallets implementing this standard can use their
already-existing "Sign Message" function to sign the certificate
message. As the certificate message itself is always an ascii string,
the wallet may not need to specially implement this section at all but
just rely on users copypasting their certificate message into the
already-existing "Sign Message" user interface. This works as long as
the wallet knows how to use the private key of the timelocked address
for signing messages.
It is most important for wallet implementions of this standard to
support creating the certificate signature. Verifying the certificate
signature is less important.
== Test vectors ==
<pre>
mnemonic = abandon abandon abandon abandon abandon abandon abandon
abandon abandon abandon abandon about
rootpriv =
xprv9s21ZrQH143K3GJpoapnV8SFfukcVBSfeCficPSGfubmSFDxo1kuHnLisriDvSnRRuL2Qrg5ggqHKNVpxR86QEC8w35uxmGoggxtQTPvfUu
rootpub =
xpub661MyMwAqRbcFkPHucMnrGNzDwb6teAX1RbKQmqtEF8kK3Z7LZ59qafCjB9eCRLiTVG3uxBxgKvRgbubRhqSKXnGGb1aoaqLrpMBDrVxga8
// First timelocked address = m/84'/0'/0'/2/0
derived private_key = L2tQBEdhC48YLeEWNg3e4msk94iKfyVa9hdfzRwUERabZ53TfH3d
derived public_key =
02a1b09f93073c63f205086440898141c0c3c6d24f69a18db608224bcf143fa011
unix locktime = 1577836800
string locktime = 2020-01-01 00:00:00
redeemscript =
0400e10b5eb1752102a1b09f93073c63f205086440898141c0c3c6d24f69a18db608224bcf143fa011ac
scriptPubKey =
0020bdee9515359fc9df912318523b4cd22f1c0b5410232dc943be73f9f4f07e39ad
address =
bc1qhhhf29f4nlyalyfrrpfrknxj9uwqk4qsyvkujsa7w0ulfur78xkspsqn84
// Test certificate using first timelocked address
// Note that as signatures contains a random nonce, it might not be
exactly the same when your code generates it
// p2pkh address is the p2pkh address corresponding to the derived
public key, it can be used to verify the message
// signature in any wallet that supports Verify Message.
// As mentioned before, it is more important for implementors of this
standard to support signing such messages, not verifying them
Message =
fidelity-bond-cert|020000000000000000000000000000000000000000000000000000000000000001|375
Address =
bc1qhhhf29f4nlyalyfrrpfrknxj9uwqk4qsyvkujsa7w0ulfur78xkspsqn84
p2pkh address = 16vmiGpY1rEaYnpGgtG7FZgr2uFCpeDgV6
Signature =
H2b/90XcKnIU/D1nSCPhk8OcxrHebMCr4Ok2d2yDnbKDTSThNsNKA64CT4v2kt+xA1JmGRG/dMnUUH1kKqCVSHo=
// 2nd timelocked address = m/84'/0'/0'/2/1
derived private_key = KxctaFBzetyc9KXeUr6jxESCZiCEXRuwnQMw7h7hroP6MqnWN6Pf
derived public_key =
02599f6db8b33265a44200fef0be79c927398ed0b46c6a82fa6ddaa5be2714002d
unix locktime = 1580515200
string locktime = 2020-02-01 00:00:00
redeemscript =
0480bf345eb1752102599f6db8b33265a44200fef0be79c927398ed0b46c6a82fa6ddaa5be2714002dac
scriptPubKey =
0020b8f898643991608524ed04e0c6779f632a57f1ffa3a3a306cd81432c5533e9ae
address =
bc1qhrufsepej9sg2f8dqnsvvaulvv490u0l5w36xpkds9pjc4fnaxhq7pcm4h
// timelocked address after the year 2038 problem = m/84'/0'/0'/2/240
derived private_key = L3SYqae23ZoDDcyEA8rRBK83h1MDqxaDG57imMc9FUx1J8o9anQe
derived public_key =
03ec8067418537bbb52d5d3e64e2868e67635c33cfeadeb9a46199f89ebfaab226
unix locktime = 2208988800
string locktime = 2040-01-01 00:00:00
redeemscript =
05807eaa8300b1752103ec8067418537bbb52d5d3e64e2868e67635c33cfeadeb9a46199f89ebfaab226ac
scriptPubKey =
0020e7de0ad2720ae1d6cc9b6ad91af57eb74646762cf594c91c18f6d5e7a873635a
address =
bc1qul0q45njptsadnymdtv34at7karyva3v7k2vj8qc7m2702rnvddq0z20u5
// last timelocked address = m/84'/0'/0'/2/959
derived private_key = L5Z9DDMnj5RZMyyPiQLCvN48Xt7GGmev6cjvJXD8uz5EqiY8trNJ
derived public_key =
0308c5751121b1ae5c973cdc7071312f6fc10ab864262f0cbd8134f056166e50f3
unix locktime = 4099766400
string locktime = 2099-12-01 00:00:00
redeemscript =
0580785df400b175210308c5751121b1ae5c973cdc7071312f6fc10ab864262f0cbd8134f056166e50f3ac
scriptPubKey =
0020803268e042008737cf439748cbb5a4449e311da9aa64ae3ac56d84d059654f85
address =
bc1qsqex3czzqzrn0n6rjayvhddygj0rz8df4fj2uwk9dkzdqkt9f7zs5c493u
</pre>
Code generating these test vectors can be found here:
https://github.com/chris-belcher/timelocked-addresses-fidelity-bond-bip-testvectors
==Reference==
*
[[https://gist.github.com/chris-belcher/18ea0e6acdb885a2bfbdee43dcd6b5af/|Design
for improving JoinMarket's resistance to sybil attacks using fidelity
bonds]]
*
[[https://github.com/JoinMarket-Org/joinmarket-clientserver/blob/master/docs/fidelity-bonds.md|JoinMarket
fidelity bonds doc page]]
* [[bip-0065.mediawiki|BIP86 - OP_CHECKLOCKTIMEVERIFY]]
* [[bip-0032.mediawiki|BIP32 - Hierarchical Deterministic Wallets]]
* [[bip-0044.mediawiki|BIP44 - Multi-Account Hierarchy for Deterministic
Wallets]]
* [[bip-0049.mediawiki|BIP49 - Derivation scheme for
P2WPKH-nested-in-P2SH based accounts]]
* [[bip-0084.mediawiki|BIP84 - Derivation scheme for P2WPKH based accounts]]
* [[bip-0086.mediawiki|BIP86 - Key Derivation for Single Key P2TR Outputs]]
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