# Bitcoin PIPEs v2: Witness Encryption and Covenant Emulation Exploring Misha Komarov's cryptographic approach to Bitcoin soft-forks. - **Source:** [Stephan Livera Podcast](https://brifing.si/source/597843ae-8d51-4318-85aa-04c1d35f69c1) - **Published:** 2026-09-24 - **Topic:** [Data & AI](https://brifing.si/c/data-ai) - **Original article:** - **On Brifing:** https://brifing.si/s/4e063bc6-db79-420b-8dcf-f880cb964bf9 ## Introduction to Bitcoin PIPEs v2 Misha Komarov introduces Bitcoin PIPEs v2, a Witness Encryption design that locks a signing key under an NP statement. This allows a valid zero-knowledge proof to decrypt the key and produce an ordinary Schnorr spend. The Bitcoin L1 only checks a normal signature, avoiding the need for consensus changes. ## Comparison with PIPEs v1 PIPEs v1 used Functional Encryption for richer post-covenants, while PIPEs v2 employs Witness Encryption for binary pre-covenants. This shift reduces ciphertext sizes from ~300 TB toward single-digit terabytes, making the approach more practical for implementation. ## Ciphertext Size Trade-offs The design focuses on reducing ciphertext sizes significantly. This reduction is crucial for practical applications, as it lowers storage and bandwidth requirements, making the system more efficient and scalable. ## DKG and 1-of-n Setup Assumptions The Distributed Key Generation (DKG) and 1-of-n setup assumptions are critical for the security and functionality of PIPEs v2. These setups ensure that the system remains non-custodial and secure, even in shared-pool use cases. ## Non-Custodial Vault Use Cases PIPEs v2 enables non-custodial vaults, allowing users to secure their Bitcoin without relying on third parties. This is particularly useful for shared-pool lending scenarios, where trust and security are paramount. ## Contrast with Cosigner Models The approach contrasts with cosigner models like Sigbash, which rely on multiple parties to authorize transactions. PIPEs v2 offers a more streamlined and secure method by leveraging cryptographic proofs. ## Shielded Bitcoin Design Allocinit’s Shielded Bitcoin design differs from Shielded CSV’s client-side validation approach. It focuses on enhancing privacy and security through advanced cryptographic techniques, ensuring robust protection for users. ## Security Challenges and Code Roadmap The design faces open cryptanalysis challenges, but a clear path toward implementable code exists. Addressing these challenges is crucial for the successful deployment and adoption of PIPEs v2 in the Bitcoin ecosystem. ## Sources covering this story - https://podcasters.spotify.com/pod/show/stephan-livera/episodes/Bitcoin-PIPEs-v2--Misha-Komarov-SLP776-e3pbdeb — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._