Miniscript support in Output Descriptors #24148 (Part 1)

[rajarshimaitra]

Session Details

• Date: 06-07-2023
• Time: IST 20:00 (UTC 14:30)
• PR: Miniscript support in Output Descriptors bitcoin/bitcoin#24148
• Context: [Wallet][Miniscript]
• Difficulty: Moderate
• Language: [python][c++]
• Notes and Questions: https://bitcoincore.reviews/24148

Summary

In this PR we will dive deep into miniscripts. What are they, why they are useful, and how they were added into Bitcoin Core.
This is the first part for a 2 part miniscript PR review series.

Learnings

• Miniscript
• Output Descriptors.
• Wallet category, Legacy and Descriptor.
• Wallet functional testing.

Note: Drop your PR and review related questions below

[rajarshimaitra]

Summary

This PR bitcoin/bitcoin#24148 introduces the miniscript mechanism into Bitcoin core's
existing descriptor functionality. Without signing capability, which was added later separately.

Questions

What is a Miniscript?

A Miniscript is a subset of Bitcoin Scripts that are analyzable, composable, capable of generic signing, and provide certain guarantees against the sanity and validity of the resulting Bitcoin scripts.

A [miniscript] can be made out of one or smaller miniscripts, and each can be made of one or more miniscripts, and so on. It's a recursive structure.

Each miniscripts chunk is called a fragment, and each fragment has 1-to-1 mapping with a specific sequence of Bitcoin scripts. Thus miniscripts are "mapped" into resulting Bitcoin scripts, not compiled.

for example, in miniscript (it's a "Policy", which is a subsequent higher layer representation of miniscript but used here for brevity)

and(pk(key_user),or(99@pk(key_service),older(12960)))

This top-level miniscript is made out of two miniscript fragments.

top_minsc = and(minsc_1, minsc2)

where
minsc_1 = pk(key_user)
minsc_2 = or(99@pk(key_service),older(12960))

minsc_2 is also made out of 2 fragments. Mininiscript is a recursive structure.

more details on miniscript here: https://bitcoin.sipa.be/miniscript/

What is a Policy?

A policy is a high-level description on top of a miniscript, to make writing a miniscript easier. Policies are more human-readable and writable. Policies are compiled into a miniscript. One policy can be compiled into multiple valid miniscripts. The compiler chooses specific optimization, primarily by minimizing spending cost, and uses that to choose the most optimal miniscript from all the possible solutions.

A quick playground Policy for the miniscript compiler is available here: https://bitcoin.sipa.be/miniscript/

What is Descriptor?

A descriptor is a string that "describes" a specific sequence of script_pubkeys. This is very useful for wallets to derive, track very conveniently, and export complex chains of public key sequence. Descriptors very natural fit with miniscripts. A descriptor contains the miniscript with specific public keys or xpubs. This allows the wallet to systematically derive addresses that commit to the spending policy described by the miniscript.

This is also useful for passing around spending policies across wallet boundaries. Because descriptors and miniscripts combined with BIP32 Xpub derivation are all standards in the Bitcoin industry, any wallet software adhering to these standards can communicate spending policies with each other. This is a crucial step in wallet operation for complex Bitcoin scriptings involving multiple parties and is currently a major UX hurdle.

Descriptor + Miniscript + Bip32 fixes it.

A descriptor string looks like <type><[miniscript]><checksum>.

A descriptor with 2-of-2 multisig, with two specific public keys, contained in P2WSH script_pubkey looks as below:

wsh(multi(2,03a0434d9e47f3c86235477c7b1ae6ae5d3442d49b1943c2b752a68e2a47e247c7,03774ae7f858a9411e5ef4246b70c65aac5649980be5c17891bbec17895da008cb,03d01115d548e7561b15c38f004d734633687cf4419620095bc5b0f47070afe85a))

More details on descriptors here: https://github.com/bitcoin/bitcoin/blob/master/doc/descriptors.md

Why are they useful?

• Miniscript combined with descriptors allows complex scripting conditions to be easily portable via the descriptor string across wallets.
• Miniscript allows safe, high-level script writing for complex Bitcoin scripts.
• By generalizing the wallet mechanism via miniscripts generic wallet-building framework can be created to build any wallet doing complex scriptings, like Multisig, Vaults, Inheritance, and Swaps.
• Descriptors allow developers to be imaginative with their complex spending policies without worrying about engineering safe Bitcoin scripts.
• Miniscript, combined with Taproot, opens the door for complex and nested Bitcoin policy structures while preserving blockchain footprint and privacy.

What is min.sc?

min.sc is a web app running on top of rust-miniscript, which exposes a high-level policy writing language and can compile policy into miniscript.

Try out min.sc here: https://min.sc/

Useful tutorials.

 - To play around from policy to miniscript compilation: https://bitcoin.sipa.be/miniscript/
 - To play around using min.sc: https://min.sc/
 - Miniscript-based wallet cli tool: https://github.com/bitcoindevkit/bdk-cli
 - Minscript tutorial: https://bitcoindevkit.org/tutorials/hidden-power-of-bitcoin/
 - Miniscript-based wallet dev kit library: https://github.com/bitcoindevkit/bdk

Bonus from Braves

If you have gone through miniscripts and descriptors and feel courageous to try more, below are a few ideas.

• Use the min.sc to craft a custom descriptor for a liquid foundation (example policy in min.sc homepage). Use Xpubs instead of specific public keys, and import the descriptor into a bdk-cli wallet. Connect bdk-cli to the regtest node in the local machine and try out your spending policy. (Inspiration: https://bitcoindevkit.org/tutorials/hidden-power-of-bitcoin/)

• Use the BDK library to make a quick and small single-sig descriptor wallet. (Inspiration: https://bitcoindevkit.org/tutorials/Bitcoin_Core_RPC_Demo/)