Bitcoin is considered private property. That’s why the word ‘covenant’ suits it perfectly. A covenant is essentially a term used when discussing property law. This is a contract that restricts the use of an object. When it comes to bitcoin, this term related to the restrictions that are placed on transactions.
While you are the owner of your property, you are also limited in what you can do with that property.
Bitcoin As Private Property
When talking about a bitcoin covenant, this means that there are restrictions on how that coin can be used. This is after you’ve bought it. There are also restrictions regarding where you can transfer those coins.
It’s possible to compare these restrictions to what banks could place on certain merchants. Say these merchants were suspected of conducting illicit activities. In this case, the bank might place restrictions on them.
When it comes to upgrading bitcoin, covenant can be seen as very useful. However, implementing bitcoin covenants can be complex. It’s also possible for conspiracies to evolve surrounding how fungible cryptocurrency is. There could also be debates around whether bitcoin should be resistant to censorship or not. These are factors that have not yet been considered, when it comes to bitcoin.
Yes, it’s possible to improve bitcoin. BIPs, such as civenants and more are what are changing the consensus regarding bitcoin. BIPs, also known as Bitcoin Improvement Proposals, are included in covenants. With the help of covenants, bitcoin now has a script language that prevents authorized spenders from spending should certain scripts be involved.