[Lightning-dev] BIP sighash_noinput

[Christian Decker]

Hi all,

I'd like to pick up the discussion from a few months ago, and propose a new
sighash flag, `SIGHASH_NOINPUT`, that removes the commitment to the previous
output. This was previously mentioned on the list by Joseph Poon [1], but was
never formally proposed, so I wrote a proposal [2].

We have long known that `SIGHASH_NOINPUT` would be a great fit for Lightning.
They enable simple watch-towers, i.e., outsource the need to watch the
blockchain for channel closures, and react appropriately if our counterparty
misbehaves. In addition to this we just released the eltoo [3,4] paper which
describes a simplified update mechanism that can be used in Lightning, and other
off-chain contracts, with any number of participants.

By not committing to the previous output being spent by the transaction, we can
rebind an input to point to any outpoint with a matching output script and
value. The binding therefore is no longer explicit through a reference, but
through script compatibility, and the transaction ID reference in the input is a
hint to validators. The sighash flag is meant to enable some off-chain use-cases
and should not be used unless the tradeoffs are well-known. In particular we
suggest using contract specific key-pairs, in order to avoid having any unwanted
rebinding opportunities.

The proposal is very minimalistic, and simple. However, there are a few things
where we'd like to hear the input of the wider community with regards to the
implementation details though. We had some discussions internally on whether to
use a separate opcode or a sighash flag, some feeling that the sighash flag
could lead to some confusion with existing wallets, but given that we have
`SIGHASH_NONE`, and that existing wallets will not sign things with unknown
flags, we decided to go the sighash way. Another thing is that we still commit
to the amount of the outpoint being spent. The rationale behind this is that,
while rebinding to outpoints with the same value maintains the value
relationship between input and output, we will probably not want to bind to
something with a different value and suddenly pay a gigantic fee.

The deployment part of the proposal is left vague on purpose in order not to
collide with any other proposals. It should be possible to introduce it by
bumping the segwit script version and adding the new behavior.

I hope the proposal is well received, and I'm looking forward to discussing
variants and tradeoffs here. I think the applications we proposed so far are
quite interesting, and I'm sure there are many more we can enable with this
change.

Cheers,
Christian

[1] https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2016-February/012460.html
[2] https://github.com/cdecker/bips/blob/noinput/bip-xyz.mediawiki
[3] https://blockstream.com/2018/04/30/eltoo-next-lightning.html
[4] https://blockstream.com/eltoo.pdf