Bitcoin Covenants Part 3: SIGHASH_ANYPREVOUT

APO lets a Bitcoin signature authorize any compatible UTXO rather than one fixed outpoint. It allows for rebindable pre-signed transactions for Lightning, vaults, and layer-2 protocols without new key management overhead.

This is Part 3 in the technical article series about Bitcoin covenants by Cointelegraph Research. To read the previous article click here.

SIGHASH_ANYPREVOUT, as proposed in BIP 118, builds on the earlier SIGHASH_NOINPUT concept mentioned in the 2015 Lightning Network paper by Joseph Poon and Thaddeus Dryja, and later formally proposed by Joseph Poon on the bitcoin-dev mailing list in February 2016.

SIGHASH_ANYPREVOUT is not a new opcode but a proposed new value for the SIGHASH flag, designed to be deployed as a soft-fork upgrade to Bitcoin. The SIGHASH flag is appended to a signature and determines which parts of a transaction are signed and will be checked by the CHECKSIG opcode. The selected flag is chosen by the signer, not enforced by the scriptPubKey. Due to the technical details related to upgradability in a softfork, the SIGHASH_ANYPREVOUT proposal only extends to spends from taproot addresses.