Learning-Bitcoin-from-the-Command-Line/9_3_Using_CSV_in_Scripts.md

9.3: Using CSV in Scripts

NOTE: This is a draft in progress, so that I can get some feedback from early reviewers. It is not yet ready for learning.

nLockTime and OP_CHECKLOCKTIMEVERIFY (or CLTV) are just one side of the timelock equation. On the other are nSequence and OP_CHECKSEQUENCEVERIFY, which can be used to check against relative times rather than absolute times.

VERSION WARNING: CSV became available with Bitcoin Core 0.12.1, in spring 2016.

Understand nSequence

Every UTXO used in a transaction has an nSequence (or if you prefer sequence) value. It's been a prime tool for Bitcoin expansions as discussed previously in §5.2: Resending a Transaction with RBF and §6.4 Sending a Transaction with a Locktime.md, where it was used to signal RBF and nLockTime, respectively. However, there's one more use for nSequence, described by BIP 68: you can use it to create a relative timelock on a transaction.

A relative timelock is a lock that's placed on a specific input of a transaction and that's calculated in relation to the mining date of that UTXO. For example, if a UTXO was mined at block #468260 and a transaction was created where the input for that UTXO was given an nSequence of 100, then the new transaction could not be mined until at least block #468360.

Easy!

SEQUENCE NOTE (III): This is the third use of the nSequence value in Bitcoin. Any nSequence value from 1 to 0xf0000000-1 will be interpreted as a relative timelock if nVersion ≥ 2 (which was the default starting in Bitcoin Core 0.14.0). You should be careful to ensure that relative timelocks don't conflict with the other two uses of nSequence, for signalling nTimeLock and RBF. nTimeLock usually sets a value of 0xffffffff-1, where a relative timelock is disallowed; and RBF usually sets a value of "1", where a relative timelock is irrelevent, because it defines a timelock of 1 block. In general, remember: with a nVersion value of 2, a nSequence value of 0x00000001 to 0xf0000000-1 allows relative timelock, RBF, and nTimeLock; a nSequence value of 0xf0000000 to 0xffffffff-2 allows RBF and nTimeLock; a nSequence value of 0xffffffff-1 allows only nTimeLock; a nSequence value of 0xffffffff allows none; and nVersion can be set to 1 to disallow relative timelocks for any value of nSequence. Whew!

Create a CSV Relative Block Time

The format for using nSequence to represent relative time locks is defined in BIP 68 and is slightly more complex than just inputting a number, like you did for nTimeLock. Instead, the BIP specifications breaks up the four byte number into three parts:

• The first two bytes are used to specify a relative locktime.
• The 23rd bit is used to signal if the lock refers to a time rather than a blockheight.
• The 32nd bit is used to signal if relative timelocks are deactivated.

If you want to create a block-based relative timelock, the construction is still quite easy: you set nSequence to a value between 1 and 0xffff (65535). The new transaction can be mined that numebr of blocks after the associated UTXO was mined.

Create a CSV Relative Time

You can instead set nSequence as a relative time, where the lock lasts for 512 seconds time the value of nSequence.

In order to do that:

1. Decide how far in the future to set your relative timelock.
2. Convert that to seconds.
3. Divide by 512.
4. Round that value up or down and set it as nSequence.
5. Set bit 23 to true.

To set a time 6 months n the future, you would first calculate as follows:

$ seconds=$((6*30*24*60*60))
$ nvalue=$(($seconds/512))
$ hexvalue=$(printf '%x\n' $nvalue)
$ relativevalue=$(printf '%x\n' $((0x$hexvalue | 0x400000)))
$ echo $relativevalue
4224679

If you convert that back you'll see that 4224679 = 10000000111011010100111. The 23rd digit is set to a "1" and the first 2 bytes, 0111011010100111, convert to 76A7 in hex or 30375 in decimal. Multiply that by 512 and you get 15.55 million seconds, which indeed is 180 days.

Create a Transaction with a Relative Timelock

So you want to create a relative timelock? All you have to do is issue a tranaction where the nSequence in an input is set in accordance with the above: with the nSequence for that input set such that the first two bytes define the timelock, the 23rd bit defines the type of timelock, and the 32nd bit is set to false. It's a straight up two-byte number for a timelock based on relative blockheight and it's a two-byte number 0x400000 for a timelock based on relative time.

Issue the transaction, but it can't legally be mined until enough blocks or enough time has passed beyond the time that the transaction forming the UTXO was mined.

Except pretty much no one does this. The new BIP 68 definitions for nSequence were incorporated into Bitcoin Core at the same time as BIP 112 which describes the CSV opcode, which works with nSequence, just like the CLTV opcode works with nTimeLock. Just like CLTV, CSV offers increased capabilities. So almost all usage of relative timelocks has been with the CSV opcode, not with the raw nSequence value on its own.

| | Absolute Timelock | Relative Timelock | |:----------------:|-------------------|-------------------| | **Lock Transaction** | nTimeLock | nSequence | | **Lock Output** | OP_CHECKLOCKTIMEVERIFY| OP_CHECKSEQUENCEVERIFY |

Understand the CSV Opcode

Understand How CSV Really Works

Write a CSV Script

Spend a CSV UTXO

Summary: Using CSV in Scripts