Bitcoin PIPEs v2 | Misha Komarov SLP776

Bitcoin soft-fork debates around CTV, CSFS, OP_CAT, and OP_VAULT keep stalling — and Misha Komarov of Allocinit argues you can emulate much of that covenant behavior with cryptography instead of changing consensus.

Misha joins Stephan to unpack Bitcoin PIPEs v2: a Witness Encryption design that locks a signing key under an NP statement so a valid zero-knowledge proof decrypts the key and produces an ordinary Schnorr spend. Bitcoin L1 only checks a normal signature.

They compare PIPEs v1 (Functional Encryption / richer post-covenants) with v2 (Witness Encryption / binary pre-covenants), ciphertext sizes from ~300 TB toward single-digit terabytes, DKG and 1-of-n setup assumptions, non-custodial vault and shared-pool use cases, contrasts with cosigner models like Sigbash, and how Allocinit’s Shielded Bitcoin design differs from Shielded CSV’s client-side validation approach — plus open cryptanalysis challenges and a path toward implementable code.

Timestamps:

00:00 — Intro: Misha & Bitcoin PIPEs v2

00:27 — Background: BitMessage to =nil;

01:31 — Soft-Fork Fatigue & Nice-to-Haves

03:24 — Emulate Opcodes Without Soft Forks

04:54 — Witness Encryption Unlocks Keys

06:01 — Witness Encryption vs Bitcoin Witness

09:00 — PIPEs v1 vs v2: FE to WE

11:39 — Ciphertext Size & Cost Trade-offs

15:28 — Vaults as the Unhappy Path

16:23 — PIPEs vs Sigbash Cosigner

18:05 — DKG Setup & 1-of-n Trust

21:11 — Shared Vaults & Lending Use Cases

23:24 — Beyond Canonical OP_VAULT

26:35 — Shielded Bitcoin vs Shielded CSV

32:17 — Self-Custody Peg-In and Peg-Out

37:14 — On-Chain Footprint Walkthrough

39:42 — Security Challenges & Code Roadmap

Links:

• https://x.com/nemothenoone

• https://x.com/allocinitxyz

Stephan Livera links:

• Follow me on X: @stephanlivera

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