<pre>
  BIP: 134
  Title: Flexible Transactions
  Author: Tom Zander <tomz@freedommail.ch>
  Status: Draft
  Type: Standards Track
  Created: 2016-07-27
</pre>

==Abstract==

This BIP describes the next step in making Bitcoin's most basic element,
the transaction, more flexible and easier to extend. At the same time this
fixes all known cases of malleability and resolves significant amounts of
technical debt.

==Summary==

Flexible Transactions uses the fact that the first 4 bytes in a transaction
determine the version and that the majority of the clients use a
non-consensus rule (a policy) to not accept transaction version numbers
other than those specifically defined by Bitcoin.
This BIP chooses a new version number, 4, and defines that the data
following the bytes for the version is in a format called Compact Message
Format (CMF). CMF is a flexible, token based format where each token is a
combination of a name, a format and a value. Because the name is added we
can skip unused tokens and we can freely add new tokens in a simple manner
in future. Soft fork upgrades will become much easier and cleaner this
way.

This protocol upgrade cleans up past soft fork changes like BIP68 which
reuse existing fields and do them in a much better to maintain and easier
to parse system. It creates the building blocks to allow new features to be
added much cleaner in the future.

It also shows to be possible to remove signatures from transactions with
minimal upgrades of software and still maintain a coherent transaction
history. Tests show that this can reduce space usage to about 75%.

==Motivation==

Token based file-formats are not new, systems like XML and HTMl use a
similar system to allow future growth and they have been quite successful
for decades in part because of this property.

Bitcoin needs a similar way of making the transaction future-proof because
re-purposing not used fields for new features is not good for creating
maintainable code.

Next to that this protocol upgrade will re-order the data-fields which
allows us to cleanly fix the malleability issue which means that future
technologies like Lightning Network will depend on this BIP being deployed.

At the same time, due to this re-ordering of data fields, it becomes very
easy to remove signatures from a transaction without breaking its tx-id,
which is great for future pruning features.


=== Tokens ===

In the compact message format we define tokens and in this specification we
define how these tokens are named, where they can be placed and which are
optional.  To refer to XML, this specification would be the schema of
a transaction.

CMF tokens are triplets of name, format (like PositiveInteger) and value.
Names in this scope are defined much like an enumeration where the actual
integer value (id, below) is equally important to the written name.
If any token found that is not covered in the next table will make the
transaction that contains it invalid.

{| class="wikitable"
|-
! Name !! id !! Format !! Default Value !! Description
|-
|TxEnd         ||  0 ||BoolTrue ||  Required    ||A marker that is end of the transaction.
|-
|TxInPrevHash  ||  1 ||ByteArray||  Required    ||TxId we are spending
|-
|TxPrevIndex   ||  2 ||Integer  ||      0       ||Index in prev tx we are spending (applied to previous TxInPrevHash)
|-
|TxInScript    ||  3 ||ByteArray||  Required    ||The 'input' part of the script
|-
|TxOutValue    ||  4 ||Integer  ||  Required    ||Amount of satoshi to transfer
|-
|TxOutScript   ||  5 ||ByteArray||  Required    ||The 'output' part of the script
|-
|LockByBlock   ||  6 ||Integer  ||  Optional    ||BIP68 replacement
|-
|LockByTime    ||  7 ||Integer  ||  Optional    ||BIP68 replacement
|-
|ScriptVersion ||  8 ||Integer  ||      2       ||Defines script version for outputs following
|-
|NOP_1x        || 1x || . ||  Optional    ||Values that will be ignored by anyone parsing the transaction
|}


=== Scripting changes ===

In the current version of Bitcoin-script, version 1, there are various
opcodes that are used to validate the cryptographic proofs that users have
to provide in order to spend outputs.

The OP_CHECKSIG is the most well known and, as its name implies, it
validates a signature.
In the new version of 'script' (version 2) the data that is signed is
changed to be equivalent to the transaction-id. This is a massive
simplification and also the only change between version 1 and version 2 of
script.

=== Serialization order===

The tokens defined above shall be serialized in a certain order for the
transaction to be valid.  Not serializing transactions in the
order specified would allow multiple interpretations of the data which
can't be allowed.
There is still some flexibility and for that reason it is important for
implementors to remember that the actual serialized data is used for the
calculation of the transaction-id. Reading and writing it may give you a
different output and when the txid changes, the signatures will break.

At a macro-level the transaction has these segments. The order of the
segments can not be changed, but you can skip segments.

{| class="wikitable"
!Segment !! Description
|-
|   Inputs   || Details about inputs.
|-
|  Outputs   || Details and scripts for outputs
|-
| Additional || For future expansion
|-
| Signatures || The scripts for the inputs
|-
|   TxEnd    || End of the transaction
|}

The TxId is calculated by taking the serialized transaction without the
Signatures and the TxEnd and hashing that.


{| class="wikitable"
!Segment !! Tags !! Description
|-
|Inputs||TxInPrevHash and TxInPrevIndex||Index can be skipped, but in any input the PrevHash always has to come first
|-
|Outputs||TxOutScript, TxOutValue||Order is not relevant
|-
|Additional||LockByBlock  LockByTime NOP_1x
|-
|Signatures||TxInScript||Exactly the same amount as there are inputs
|-
|TxEnd||TxEnd
|}

TxEnd is there to allow a parser to know when one transaction in a stream
has ended, allowing the next to be parsed.

Notice that the token ScriptVersion is currently not allowed because we
don't have any valid value to give it. But if we introduce a new script
version it would be placed in the outputs segment.

=== Script v2 ===

The default value of ScriptVersion is number 2, as opposed to the version 1
of script that the is in use today.  The version 2 is mostly identical
to version one, including upgrades made to it over the years and in the 
future. The only exception is that the OP_CHECKSIG is made dramatically
simpler.  The input-type for OP_CHECKSIG is now no longer configurable, it is
always '1' and the content that will be signed is the txid.

TODO: does check-multisig need its own mention?


=== Block-malleability ===

The effect of leaving the signatures out of the calculation of the
transaction-id implies that the signatures are also not used for the
calculation of the merkle tree.  This means that changes in signatures
would not be detectable. Except naturally by the fact that missing or
broken signatures breaks full validation. But it is important to detect
modifications to such signatures outside of validating all transactions.

For this reason the merkle tree is extended to include (append) the hash of
the v4 transactions. The markle tree will continue to have all the
transactions' tx-ids but appended to that are the v4 hahes that include the
signatures as well.  Specifically the hash is taken over a data-blob that
is build up from:

1. the tx-id
2. the CMF-tokens 'TxInScript'


=== Future extensibility ===

The NOP_1x wildcard used in the table explaining tokens is actually a list
of 10 values that currently are specified as NOP (no-operation) tags.

Any implementation that supports the v4 transaction format should ignore
this field in a transaction. Interpreting and using the transaction as if
that field was not present at all.

Future software may use these fields to decorate a transaction with
additional data or features. Transaction generating software should not
trivially use these tokens for their own usage without cooperation and
communication with the rest of the Bitcoin ecosystem as miners certainly
have the option to reject transactions that use unknown-to-them tokens.

==Backwards compatibility ==

Fully validating older clients are not compatible with this change.

SPV (simple payment validation) wallets need to be updated to receive or
create the new transaction type.

This BIP introduces a new transaction format without changing or
deprecating the existing one or any of its practices. Therefor it is
backwards compatible for any existing data or parsing-code.

==Reference Implementation==

Bitcoin Classic includes this in its beta releases and a reference
implementation can be found at;

https://github.com/bitcoinclassic/bitcoinclassic/pull/186


==Deployment==

To be determined

==References==

[https://github.com/bitcoinclassic/documentation/blob/master/spec/compactmessageformat.md] CMF

==Copyright==

Copyright (c) 2016 Tom Zander <tomz@freedommail.ch>

This document is licensed under the Open Publication License v1.0

Distribution of substantively modified versions of this document is prohibited without the explicit permission of the copyright holder.
Distribution of the work or derivative of the work in any standard (paper) book form is prohibited unless prior permission is obtained from the copyright holder.