Covenants have the potential to be extremely dangerous to Bitcoin censorship resistance and fungibility. It allows the enforcement of blacklists, whitelists and the ability to freeze funds and enforce KYC rules.
For instance, a regulated exchange could be required to reject a TX that doesn't have a required covenant attached. And it might attach a covenant the to all withdrawals. Wallets could be legally required to check for certain covenants
The risks outweigh the potential benefits
Jayson
npub1wz…cug32
2024-10-07 05:09:02
in reply to nevent1q…wuyf
Author Public Key
npub1wzp348tn0w5kxe2w5amsg2079w93l6hqj0new5ugzmpvr6twgy0s3cug32Published at
2024-10-07 05:09:02Event JSON
{
"id": "b03c6a5c8de797c8fe0ac89d610896b5d06b1e15c998c1b2421702ecf13db0ef",
"pubkey": "70831a9d737ba963654ea7770429fe2b8b1feae093e797538816c2c1e96e411f",
"created_at": 1728277742,
"kind": 1,
"tags": [
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[
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"content": "Covenants have the potential to be extremely dangerous to Bitcoin censorship resistance and fungibility. It allows the enforcement of blacklists, whitelists and the ability to freeze funds and enforce KYC rules. \n\nFor instance, a regulated exchange could be required to reject a TX that doesn't have a required covenant attached. And it might attach a covenant the to all withdrawals. Wallets could be legally required to check for certain covenants\n\nThe risks outweigh the potential benefits \n\n\n\n",
"sig": "8b3fbdedfc4632364ec7b48b91ebd40f5506842da42608dcc123749545be20116e864b38a1742415ba16137cc81e25df845ccb9197a4d4337db1a56db99ab0ce"
}