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Taproot Envelope

The new taproot encoding allows embedding Counterparty data in transaction witnesses. It uses an envelope script similar to Ordinals. Main Advantages:

  • Ability to embed up to 400Kb of data
  • Benefit from reduced transaction fees (witnesses being 4 times cheaper than the rest of the transaction) Main Disadvantages:
  • The need to broadcast two transactions: a Commit transaction and a Reveal transaction
  • The difficulty of signing the second Reveal transaction The Counterparty API makes this entire process smooth and easy by directly returning a Reveal transaction signed with a random key.

Composition​

To compose a transaction with the new format, you must use the parameter encoding=taproot. When this encoding is used, the Composer returns an additional field:

  • signed_reveal_rawtransaction which contains the signed Reveal transaction in hex format

Compatibility with Ordinals​

Counterparty uses two different envelope script formats:

  • A first format optimized for size and not compatible with Ordinals
  • A second format totally compatible with Ordinals inscriptions

The second format is automatically used with the following transactions:

  • Issuance
  • Fairminter
  • Broadcast

For issuances and fairminter, the description parameter is used as the content of the Ordinals inscription. For broadcasts, it's the text parameter that is used.

These 3 transactions accept a new parameter mime_type. By default, this parameter is equal to text/plain. If the MIME type designates a binary file (for example, a PNG image), the content of description or text must be in hexadecimal format.

To use the format compatible with Ordinals, you need to pass the parameter inscription=true.

Signature​

The first transaction is signed in the classic way, you can use the fields lock_scripts and inputs_values to sign it without using an external service (Electrs or Bitcoin Core).

The second transaction is already signed, you just need to broadcast it after the first one.