What does OP_CTV mean for me?
Safer Bitcoin storage with smart vaults, smoother payments, and fewer trusted intermediaries
I want to take you through some practical uses of OP_CTV. Technical documentation might describe how it works, and usecases might describe a general category of uses. This is all well and good but I want to describe, in concrete terms, how a world with OP_CTV can look to you, the everyday Bitcoin user.
So let's dive into the shallow end of a few of OP_CTV's killer apps, namely: smart vaults, smoother payments, and fewer trusted intermediaries.
Today your smartest vaults within Bitcoin are some form of multisig wallet where your cold storage requires more than one key to unlock. This is great because it protects you from someone stealing one of your keys and gaining access, or from you losing a key and losing your BTC.
However multisig wallets start and end at the keys. There's only so many things you can do with them. Every time you want to access your cold storage you need to get your keys and start signing transactions. For most people their cold storage is simply a single key because multisigs are hard to manage. In the worst case if someone gets the key(s) to your BTC they can spend it all immediately. This disastrous scenario is something that we've just collectively accepted as necessary but it doesn’t need to be this way.
But if Bitcoin was just a tiny bit smarter you could make your whole life a lot easier.
Permissioned spending: Set permissions on your cold storage so it can't be stolen even if your keys get compromised. Predefine what addresses your BTC can be sent to, or have it unlock slowly over time.
Trustless trusts: Let Bitcoin itself manage the savings you've left to your kids and loved ones. No need for a third party trustee to follow your wishes or fight it out in court. Your trust is now just part of your contingency planning.
Automatic hot wallets: Imagine a small percentage of your cold storage unlocking periodically so that your mobile Lightning wallet has the option to access it. If you don't need it then it can even automatically relock without you needing to do a thing.
Now imagine how much safer this tech will make Bitcoin businesses when safeguarding funds and moving money between their cold storage and hot wallets. Less losses, less haircuts, less intermediate steps. This is simple money management technology for the complicated world we live in.
Smoothing Out Payment Cost
You probably don't make payments to 100s of people at a time. But you likely use exchanges that do. During times of high block space demand it becomes much more expensive for them to pay you. Exchanges will pass these fees onto you with additional withdrawal fees or hide the cost in their service fees. Either way you pay these fees, not them. This isn't a big deal right now but what happens when Bitcoin's userbase hits 1 billion people? Bitcoin is going to need these congestion controls.
Today there exists no practical way for exchanges to pay 100s of people at a time without creating a large transaction and paying a large fee during times of network congestion. With OP_CTV exchanges could avoid these high costs, broadcast a very small transaction to pay 100s of people, and each of them can later spend this BTC when the transaction fees are cheaper.
This smoothing applies to not just exchanges but anyone paying a lot of employees, opening trustless Lightning channels for customers, and creating any sort of Smart Vault like we already discussed.
Many other uses
OP_CTV also gives us longer Lightning channels, better connectivity between Lightning nodes, cheaper Lightning channel closure, trustless options contracts, and many more things. Most importantly these applications decrease the amount of trust we need to put into other businesses and users when using the Bitcoin network. Decreased trust is at the heart of Bitcoin and further improving it will only make Bitcoin stronger.
Bonus fun fact for those who made it this far: The critical OP_CTV code that does all of this is tiny, just under 200 lines. This is an immensely small amount of code for the impact it could potentially have.
Thanks for Reading!
Thanks for reading, is there anything about OP_CTV that you are looking forward to? Anything you'll never use? As important as it is for developers to discuss implementations and alternatives it's also crucial for every day users to make their needs and wants known. So please comment below, tweet about it, just start talking. You don't need technical expertise to be excited about or advocate for a feature. Which way we get there is up to developers to implement, and users to demand, but we won't get there if users aren't speaking up.
Author's note: This article glossed over alternative schemes that can achieve some of this functionality today with a variety of more cumbersome methods that, in the author's opinion, are out of the reach of everyday users or introduce additional trust in third parties. Regardless of these alternative schemes not everything described above can be done without OP_CTV or similar opcodes.
Lastly, big thanks to the contributors that helped with editing this post!