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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.

It is possible to prevent the automatic use of the format compatible with Ordinals by using the parameter inscription=false.

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.