Simple covenants for BitcoinJune 01, 2019
Covenants are restrictions on how a coin may be spent beyond key ownership. Covenants can be useful to construct smart contracts. As covenants are complex to implement and risk of introducing fungibility discriminants they have not been seriously considered for inclusion in Bitcoin.
This BIP introduces a simple covenant called a template which enables a limited set of highly valuable use cases without significant risk.
The new opcode has applications for transaction congestion control and payment channel instantiation, among others.