Bitcoin Optech Newsletter #45

This week’s newsletter highlights some of the changes in the recently-released Bitcoin Core 0.18.0, briefly mentions two proposed BIPs, describes how bech32 addresses are forward compatible with expected protocol improvements, and summarizes notable changes in popular Bitcoin infrastructure projects.

Action items

  • Consider upgrading to Bitcoin Core 0.18.0: released last week, the latest version of Bitcoin Core brings new features, performance improvements, and bug fixes. See the news section below for more details.


  • Bitcoin Core 0.18.0 released: this new major version contains several significant new features plus many minor features and bugfixes. The project’s release notes describe all notable changes and a list of each of the 119 people whose merged PRs helped contribute to this release. Some features we think readers of this newsletter might find especially interesting include,

    • More PSBT tools and refinements: the previous major release, 0.17, introduced support for BIP174 Partially-Signed Bitcoin Transactions (PSBTs) designed to help multiple programs or devices collaboratively create and sign transactions, such as multisig wallets, hardware wallets, and cold wallets. The 0.18 release builds on that foundation with several bugfixes and improvements, including three new RPCs: joinpsbts to merge together multiple PSBTs; analyzepsbt to tell the user what they next need to do with the PSBT; and utxoupdatepsbt to add necessary information to a PSBT from a node’s UTXO set. Additionally, the PSBT section from the 0.17 release notes has been placed in a separate document and expanded to cover new features added in 0.18.

    • Initial RPC support for output script descriptors: Bitcoin software needs a way to find all the transactions on the block chain that pay a user’s wallet. This is easy if the wallet only supports one scriptPubKey format—e.g., for P2PKH, the wallet hashes each of its pubkeys and looks for any scriptPubKeys paying 0x76a9[hash160 of any wallet pubkey]88ac. But Bitcoin Core’s built-in wallet currently supports many different scriptPubKey formats—P2PK, P2PKH, P2WPKH, bare multisig, P2SH commitments, and P2WSH commitments. This provides flexibility and backwards compatibility but comes at a cost of poor scalability: the wallet expends CPU time scanning for old or rare scripts that most users never use.

      Output script descriptors are a new language developed by Pieter Wuille for concisely describing scriptPubKeys so that the wallet knows exactly what it should scan for. The ultimate goal is for Bitcoin Core’s wallet to contain a simple list of descriptors describing all of its scripts—a list that may be as short as a single descriptor for most users but supporting broad flexibility for future upgrades and advanced use cases (including multisig and hardware signing); see PR #15487 and #15764 for work towards that end. However, to allow both users and project developers to build experience working with descriptors before fundamental changes are made to the wallet, the 0.18 release updates existing RPCs and adds new RPCs that work with descriptors. Existing RPCs updated with descriptor support include scantxoutset, importmulti, getaddressinfo, and listunspent. New RPCs include deriveaddresses and getdescriptorinfo.

    • Basic hardware signer support through independent tool: released separately from 0.18, but still part of the Bitcoin Core project, is the Hardware Wallet Interaction (HWI) tool that allows users comfortable working on the command line to use Bitcoin Core with several popular models of hardware wallets. Internally, the tool makes heavy use of PSBTs and output script descriptors, allowing it to be integrated with other wallets that support those interfaces (e.g. Wasabi wallet’s experimental support). Work has already begun on more directly integrating HWI with the main Bitcoin Core tools and building graphical interfaces for it.

    • New wallet tool: alongside bitcoind and other Bitcoin programs is a new bitcoin-wallet tool. This command-line tool currently only allows the user to create a new wallet or perform some basic inspections on an existing wallet, but it’s planned to add more features to the tool in subsequent releases.

    • New architecture and new Ubuntu Snap package: this is the first release to provide pre-built binaries for Linux on the RISC-V CPU architecture. For users of Ubuntu and compatible systems, this release also provides a Snap package that replaces the PPA that was updated in previous releases. Both the RISC-V and Snap packages include binaries that are deterministically built and signed by multiple Bitcoin Core contributors.

    • Numerous testing and Quality Assurance (QA) changes: the release notes list all the PRs related to 0.18 that Bitcoin Core’s release manager thought were significant, split into twelve categories. Although the significance and categorization criteria are somewhat arbitrary, and the number of PRs doesn’t necessarily correlate to the amount of work done, we think it’s notable that the “Tests and QA” section in the release notes has more than double the number of PRs listed in any other category. We don’t often get to write about testing in this newsletter—tests are rarely news unless something goes wrong—so we wanted to take this opportunity to remind readers that testing remains an active and important part of Bitcoin Core development.

    • Plan to switch to bech32 receiving addresses by default: as mentioned in the news section of Newsletter #40, the release notes announce the project’s intention to switch to bech32 sending addresses by default in either the next major version (0.19, expected around November 2019) or the version after that (expected about a year from now). The earlier date is the current target.

  • Proposal for support of Schnorr signatures and Taproot script commitments: Pieter Wuille posted to the Bitcoin-Dev mailing list a proposed BIP for Taproot (using Schnorr signatures) and a proposed BIP for Tapscript, a small variation on Bitcoin’s current Script language to be used with Taproot encumbrances. Also provided is a reference implementation of the two proposals that makes all consensus changes in about 520 lines of code (excluding changes related to Schnorr signatures that will be added to the libsecp256k1 library; see the previously-released bip-schnorr for more information).

    The announcement of the proposals came too late in the writing process for us to provide a detailed description in this newsletter, although we did alter some other text in this newsletter to reflect the release of the proposals. We plan to provide full coverage next week.

Bech32 sending support

Week 8 of 24. Until the second anniversary of the segwit soft fork lock-in on 24 August 2019, the Optech Newsletter will contain this weekly section that provides information to help developers and organizations implement bech32 sending support—the ability to pay native segwit addresses. This doesn’t require implementing segwit yourself, but it does allow the people you pay to access all of segwit’s multiple benefits.

What do bip-taproot and bip-tapscript mean for people who have implemented bech32 sending support or who are planning to implement it? In particular, if you haven’t implemented segwit sending support yet, should you wait to implement it until the new features have been activated? In this weekly section, we’ll show why you shouldn’t wait and how implementing sending support now won’t cost you any extra effort in the future.

The designers of segwit and bech32 had a general idea what future protocol improvements would look like, so they engineered segwit scriptPubKeys and the bech32 address format to be forward compatible with those expected improvements. For example an address supporting Taproot might look like this:


You’ll notice that looks just like other bech32 addresses you’ve seen—because it is. You can use the exact same code we provided in Newsletter #40 (using the bech32 reference library for Python) to decode it.

>> import segwit_addr
>> address='bc1pqzkqvpm76ewe20lcacq740p054at9sv7vxs0jn2u0r90af0k63332hva8pt'
>> witver, witprog = segwit_addr.decode('bc', address)
>> witver
>> bytes(witprog).hex()

The differences here from the decoded bech32 addresses we’ve shown in previous newsletters are that this hypothetical Taproot address uses a witness version of 1 instead of 0 (meaning the scriptPubKey will start with OP_1 instead of OP_0) and the witness program is one byte longer than a P2WSH witness program. However, these don’t matter to your software if you’re just spending. We can use the exact same example code from Newsletter #40 to create the appropriate scriptPubKey for you to pay:

>> bytes([witver + 0x50 if witver else 0, len(witprog)] + witprog).hex()

This means anyone who implements bech32 support in the generic way described in Newsletter #40 shouldn’t need to do anything special in order to support future script upgrades. In short, the work you invest into providing bech32 sending support now is something you won’t need to repeat when future expected changes to the Bitcoin protocol are deployed.

Notable code and documentation changes

Notable changes this week in Bitcoin Core, LND, C-Lightning, Eclair, libsecp256k1, and Bitcoin Improvement Proposals (BIPs).

  • Bitcoin Core #15323 updates the getmempoolinfo RPC and /rest/mempool/info.json REST endpoints so that they return a loaded field that’s true if the saved mempool has been fully loaded from disk or false if it’s still loading.

  • Bitcoin Core #15141 takes the code that bans peers for sending invalid data and moves it from the validation code into the network-management code. Specifically, when the network code passes new data to the validation code and the validation code returns invalid, it also returns a reason for the invalidity. The network code can use this reason to determine whether the peer who sent the data should be banned, otherwise penalized, or not penalized at all (e.g. the peer sent invalid data because it’s running a node version from before a soft fork and so is unaware of the new rules). This not only creates a clearer division between layers in the system’s code but it also prepares for future improvements in the peer-handling code that will allow it to be smarter about banning peers based on multiple criteria.

  • The C-Lightning plugin repository received an autopilot plugin that can help users choose one or more channels to open to start sending LN payments. The plugin is based on an earlier PR to the main C-Lightning codebase.