Bitcoin PIPEs v2: Covenants and ZK-Gated Spending on L1
A new Delving Bitcoin post introduces Bitcoin PIPEs v2, a cryptographic approach to covenants and ZK-gated spending on L1 using witness encryption. The proposal also shows how PIPEs could compress and simplify BitVM-style dispute flows while keeping Bitcoin’s consensus unchanged.
delvingbitcoin.org
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Bitcoin PIPEs v2: Covenants and ZKPs on the Bitcoin L1 via Witness Encryption
Bitcoin’s transaction validation model is intentionally minimal. At the consensus layer, Bitcoin verifies only that a transaction correctly spends unspent outputs and that each input is authorized by a valid digital signature. This simplicity is a defining strength: it keeps consensus rules stable, auditability high, and the security model well understood. At the same time, it places hard limits on the kinds of spending policies that can be enforced directly on-chain.