This week’s newsletter includes news and action items about a feature freeze for the next major version of Bitcoin Core, increasing transaction fees, a likely renaming of the proposed SIGHASH_NOINPUT flag, and several notable recent Bitcoin Core merges.

Action items

  • Last chance to advocate for any almost-ready new features to be included in Bitcoin Core 0.17, expected to be released in August or September. The feature-freeze date mentioned in newsletter #3 has been pushed back a week to July 23rd.

Dashboard items

  • ● Transaction fees increasing: for transactions targeting confirmation within 12 blocks or sooner, recommended fees have risen up to 3x compared to this time last week. Nodes with default settings still have plenty of room in their mempools, so the trend could quickly reverse itself. It’s recommended to be careful making cheap consolidation transactions until feerates drop again or unless you can wait potentially several weeks for the consolidation transaction to confirm.

News

  • ● Coin selection groups discussion: under discussion this week was Bitcoin Core PR #12257, which adds an option to the wallet that causes every output paid to the same address to be spent whenever any one of those outputs is spent. A motivation for this PR is to enhance privacy, as otherwise spending multiple outputs received to the same address in different transactions will create a privacy-reducing link between those transactions. But this option also automatically consolidates inputs which may be of special interest to Bitcoin businesses that frequently receive multiple payments to the same address.

  • ● Continuing discussion about Schnorr signatures: no faults have been identified with the proposed BIP described in last week’s newsletter, but two developers have proposed optimizations, one of which has run afoul of security considerations and another one of which will likely not be added as its minor optimization comes at the tradeoff of removing different minor optimization.

  • ● Naming of SIGHASH_NOINPUT: BIP118 describes a new optional signature-hash (sighash) flag that doesn’t identify which set of bitcoins it is spending. The main thing used to determine whether the spend is valid is whether the signature script (witness) fulfills all the conditions of the pubkey script (encumbrance).

    For example, in the Eltoo smart contract protocol aimed augmenting Lightning Network (LN), Alice and Bob sign each change of balance in a payment channel with this new sighash flag so that, when they want to close the channel, either one of them can use the transaction with the final balance to spend from the transaction with the initial balance.

    However, naive use of this new sighash flag can cause unexpected loss of funds. For example, Alice receives some bitcoins to a particular address; she then spends those bitcoins to Bob using the new sighash flag. Later, Alice receives more bitcoins to the same address—Bob can now steal those bitcoins by reusing the same signature Alice used before. Note that this only affects people using the new sighash flag; it doesn’t affect unrelated transactions.

    The discussion this week on the bitcoin-dev and lightning-dev mailing lists was about naming the sighash flag so that developers don’t use it accidentally without realizing its dangers. A rough consensus seems to have formed around the name SIGHASH_NOINPUT_UNSAFE.

Notable Bitcoin Core merges

  • ● #13072: The createmultisig RPC can now create P2SH-wrapped segwit and native segwit addresses.

  • ● #13543: Support for the RISC-V CPU architecture added.

  • ● #13386: New specialized SHA256 functions that take advantage of CPU extensions and knowledge of specific data inputs used by Bitcoin Core (such as the very common case where the input data is exactly 64 bytes, as used for every calculation in a Bitcoin merkle tree). This can provide up to a 9x speed-up over Bitcoin Core 0.16.x for cases where the new code applies and is supported by the user’s CPU. The code mainly helps speed up validation of blocks, both historic blocks during initial sync and new blocks during normal operation.

  • ● #13452: The verifytxoutproof RPC is no longer vulnerable to a particular expensive attack against SPV proofs publicly disclosed in early June. The attack was considered unlikely given that much cheaper attacks of roughly equal effectiveness are well known. See also merged PR #13451 that adds extra information that can be used to defeat the attack to the getblock RPC. None of this mitigates the attack for actual SPV clients.

  • ● #13570: New getzmqnotifications RPC that “returns information about all active ZMQ notification endpoints. This is useful for software that layers on top of bitcoind.”

  • ● #13096: Increase the maximum size of transactions that will be relayed by default from 99,999 vbytes to 100,000 vbytes.