This week’s newsletter provides an update on development of the RGB protocol and includes our regular sections that summarize recent updates to clients and services, announce new releases and release candidates, and describe notable changes to popular Bitcoin infrastructure software.


  • RGB update: Maxim Orlovsky posted to the Bitcoin-Dev mailing list with an update on the state of RGB development. RGB is a protocol that uses Bitcoin transactions to perform state updates in offchain contracts. A simple example involves the creation and transfer of tokens, although RGB is designed for more purposes than just token transfer.

    • Offchain, Alice creates a contract whose initial state assigns 1,000 tokens to a certain UTXO which she controls.

    • Bob wants 400 of the tokens. Alice gives him a copy of the original contract plus a transaction that spends her UTXO a new output. That output contains a non-public commitment to the new contract state. The new contract state specifies the distribution of amounts (400 to Bob; 600 back to Alice) and the identifiers for two outputs which will control those amounts. Alice broadcasts the transaction. The security of this token transfer against double spending is now equal to that of Alice’s Bitcoin transaction, e.g. when her transaction has six confirmations, the token transfer will be secure against a fork of up to six blocks.

      The outputs which control the amounts don’t need to be outputs of the transaction containing the commitment (though that would be allowed). This eliminates the ability to use onchain transaction analysis to track RGB-based transfers. The tokens could have been transferred to any existing UTXO—or to any UTXO that the receiver knows will exist in the future (e.g. a presigned spend from their cold wallet which may not appear onchain for years). The bitcoin value of the various outputs, and their other characteristics, are irrelevant to the RGB protocol, although Alice and Bob will want to ensure they’re easy to spend.

    • Later, Carol wants to buy 100 tokens from Bob in an atomic swap using a single onchain transaction. She generates an unsigned PSBT which funds the transaction from her inputs, pays Bob bitcoin via an output, and returns the bitcoin change to herself with a second output. One of those outputs also commits to the amounts and UTXO identifiers where she will receive her tokens and Bob will receive his token change.

      Bob provides Carol with the original contract and the commitment Alice previously created that proves Bob now controls 400 tokens. Bob doesn’t need to know what Alice did with her remaining 600 tokens and Alice has no involvement in the exchange between Bob and Carol. This provides both privacy and scalability. Bob updates the PSBT with a signed input for the UTXO controlling the tokens.

      Carol verifies the original contract and the history of previous state updates. She also ensures that everything else in the PSBT is correct. She provides her signature and broadcasts the transaction.

    Although each of the example transfers above was made onchain, it’s straightforward to modify the protocol to operate offchain. Carol gives Dan a copy of the contract along with the history of state updates leading to her receiving 100 tokens. She and Dan then coordinate to create an output that receives the 100 tokens and that requires signatures from both of them to spend. Offchain, they transfer the tokens back and forth by generating many different versions of a transaction that spends the multisignature output, with each offchain spend committing to the distribution of tokens and the identifiers of the outputs which will receive those tokens. Finally, one of them broadcasts one of the spending transactions, putting the state onchain.

    The outputs to which the tokens were assigned may be encumbered by a Bitcoin script that determines who will ultimately control the tokens. For example, they may pay an HTLC script that gives Carol the ability to spend the tokens at any time if she can provide a preimage and her signature, or which gives Dan the ability to spend the tokens with just his signature after a time lock expires. This allows the tokens to be used in forwarded offchain payments, such as those used in LN.

    In a reply to the thread, Federico Tenga linked to a RGB-based LN node based on a fork of LDK and that project’s LDK sample node. Following links in that project, we found useful additional information about LN compatibility. More information about the RGB protocol may be found on a website hosted by the LNP/BP Association.

    In this week’s post, Orlovsky announced the release of RGB v0.10. Most significantly, the new version is not compatible with contracts created for previous versions (but there are no known commercial RGB contracts on mainnet). The new design is intended to allow all new contracts to be upgraded over time for future changes in the protocol. A number of other improvements have also been implemented, and a roadmap for adding additional features is presented.

    As of this writing, the announcement had received a modest amount of discussion on the mailing list.

Changes to services and client software

In this monthly feature, we highlight interesting updates to Bitcoin wallets and services.

  • Descriptor wallet library adds block explorer: Descriptor wallet library is a rust descriptor-based wallet library that builds upon rust-bitcoin and supports miniscript, descriptors, PSBTs, and in recent releases, a text-based block explorer that parses and displays extended details of taproot control blocks from transaction input witnesses, as well as descriptors and miniscripts matching the transaction scripts.

  • Stratum v2 reference implementation update announced: The project posted details about the updates including the ability for miners in a pool to select transactions for a candidate block. Miners, pools, and mining firmware developers are encouraged to test and provide feedback.

  • Liana 0.4 released: Liana’s 0.4 release adds support for multiple recovery paths and additional descriptors, enabling larger quorums.

  • Coldcard firmware supports additional sighash flags: Coldcard’s version 5.1.2 firmware now supports all signature-hash (sighash) types beyond SIGHASH_ALL, enabling advanced transacting possibilities.

  • Zeus adds fee bumping features: Zeus v0.7.4 adds fee bumping, utilizing RBF and CPFP, for onchain transactions including LN channel opening and LN channel closing transactions. Fee bumping is initially just supported with an LND backend.

  • Utreexo-based Electrum Server announced: Floresta is an Electrum protocol-compatible server that uses utreexo to decrease the server’s resource requirements. The software currently supports the signet test network.

Releases and release candidates

New releases and release candidates for popular Bitcoin infrastructure projects. Please consider upgrading to new releases or helping to test release candidates.

Notable code and documentation changes

Notable changes this week in Bitcoin Core, Core Lightning, Eclair, LDK, LND, libsecp256k1, Hardware Wallet Interface (HWI), Rust Bitcoin, BTCPay Server, BDK, Bitcoin Improvement Proposals (BIPs), Lightning BOLTs, and Bitcoin Inquisition.

  • Bitcoin Core #27358 updates the script to automate the process of verifying the files for a Bitcoin Core release. A user imports the PGP keys of signers they trust. The script downloads the list of checksummed files for a release and the signatures of people who have committed to those checksums. The script then verifies at least k of the trusted signers committed to those checksums, where the user can choose how many k signers they need. If sufficient valid signatures from trusted signers were found, the script downloads the files so the user can install that version of Bitcoin Core. For additional details, see the documentation. The script is not required to use Bitcoin Core and does nothing but automate a process that users are encouraged to perform themselves before using security-sensitive files downloaded from the internet.

  • Core Lightning #6120 improves its transaction replacement logic, including implementing a set of rules for when to automatically RBF fee bump a transaction and periodically rebroadcasting unconfirmed transactions to ensure they’re relayed (see Newsletter #243).

  • Eclair #2584 adds support for splicing, both splice-ins which add funds to an existing channel and splice-outs which sends funds from a channel to an onchain destination. The PR notes that there are some differences in the implementation from the current draft specification.