@smartledger/bsv 3.1.1 → 3.2.1

package/docs/ADVANCED_COVENANT_DEVELOPMENT.md

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+# Advanced Covenant Development Guide
+
+## SmartLedger-BSV v3.1.1+ Complete Covenant Framework
+
+This comprehensive guide combines BIP143 preimage specifications with nChain PUSHTX techniques to provide enterprise-grade covenant development capabilities for Bitcoin SV.
+
+## Table of Contents
+
+1. [Overview](#overview)
+2. [BIP143 Preimage Structure](#bip143-preimage-structure)  
+3. [nChain PUSHTX Techniques](#nchain-pushtx-techniques)
+4. [Advanced Covenant Patterns](#advanced-covenant-patterns)
+5. [Implementation Examples](#implementation-examples)
+6. [Security Considerations](#security-considerations)
+7. [Performance Optimization](#performance-optimization)
+8. [Production Guidelines](#production-guidelines)
+
+## Overview
+
+The SmartLedger-BSV covenant framework provides both high-level abstractions and granular control for advanced Bitcoin SV development. This dual-level approach ensures developers can:
+
+- **Use simplified APIs** for common covenant patterns
+- **Access full BSV library** for complex custom implementations
+- **Leverage proven techniques** from academic research (nChain WP1605)
+- **Follow industry standards** (BIP143 preimage structure)
+
+### Key Features
+
+- ✅ **BIP143 Compliant**: Full preimage parsing with field-by-field access
+- ✅ **PUSHTX Integration**: In-script signature generation capabilities  
+- ✅ **PELS Support**: Perpetually enforcing locking scripts
+- ✅ **Production Ready**: Comprehensive error handling and validation
+- ✅ **BSV Compatible**: Works alongside existing BSV API without breaking changes
+
+## BIP143 Preimage Structure
+
+### Preimage Components (108+ bytes total)
+
+The BIP143 sighash preimage contains the following fields in order:
+
+```
+Field 1:  nVersion        (4 bytes, little-endian)
+Field 2:  hashPrevouts    (32 bytes) - double SHA256 of all input outpoints  
+Field 3:  hashSequence    (32 bytes) - double SHA256 of all input sequences
+Field 4:  outpoint        (36 bytes) - prevTxId (32) + outputIndex (4, LE)
+Field 5:  scriptCode      (variable) - with proper varint length encoding
+Field 6:  amount          (8 bytes, little-endian) - UTXO value being spent
+Field 7:  nSequence       (4 bytes, little-endian) 
+Field 8:  hashOutputs     (32 bytes) - double SHA256 of all outputs
+Field 9:  nLockTime       (4 bytes, little-endian)
+Field 10: sighashType     (4 bytes, little-endian)
+```
+
+### Enhanced Preimage Parsing
+
+```javascript
+const { CovenantPreimage } = require('./lib/covenant-interface.js');
+
+// Create enhanced preimage parser
+const preimage = new CovenantPreimage(preimageHex);
+
+// Access parsed fields with proper type conversion
+console.log('Version:', preimage.nVersionValue);           // uint32
+console.log('Amount:', preimage.amountValue);              // BigInt  
+console.log('Sequence:', preimage.nSequenceValue);         // uint32
+console.log('Locktime:', preimage.nLockTimeValue);         // uint32
+console.log('Sighash:', preimage.sighashTypeValue);        // uint32
+
+// Access raw buffers for script operations
+const hashPrevouts = preimage.hashPrevouts;    // 32-byte Buffer
+const scriptCode = preimage.scriptCode;        // Variable-length Buffer  
+const outpoint = preimage.outpoint;           // 36-byte Buffer
+
+// Validation
+console.log('Valid preimage:', preimage.isValid);
+```
+
+### Field Access Methods
+
+```javascript
+// Direct field access with endianness handling
+const version = preimage.nVersion.readUInt32LE(0);
+const outputIndex = preimage.outputIndex.readUInt32LE(0);
+const amount = preimage.amount.readBigUInt64LE(0);
+
+// Variable-length field parsing  
+const scriptLength = preimage.readVarInt(offset);
+const lengthBytes = preimage.getVarIntLength(scriptLength);
+```
+
+## nChain PUSHTX Techniques
+
+### Core Concept (WP1605)
+
+PUSHTX generates signatures in-script to push the current spending transaction onto the stack, enabling covenant validation. The technique uses:
+
+1. **In-script signature generation**: `s = k⁻¹(z + ra) mod n`
+2. **Optimization**: `k = a = 1` simplifies to `s = z + Gₓ mod n`  
+3. **Message construction**: Build BIP143 preimage in-script
+4. **Verification**: Use `OP_CHECKSIG` to validate constructed message
+
+### Security Properties
+
+From nChain's security analysis:
+
+- **Data integrity**: Computationally infeasible to construct different message `m'` with same signature
+- **Fixed parameters**: Public key, ephemeral key, and sighash flag must be fixed in locking script
+- **Malleability prevention**: DER canonicalization ensures `s ≤ n/2`
+
+### Implementation Pattern
+
+```javascript
+// PUSHTX signature generation (k=a=1 optimization)
+script.add(bsv.Opcode.OP_HASH256);                    // z = hash256(message)
+
+// Add generator x-coordinate (Gₓ)  
+const generatorX = '79be667ef9dcbbac55a06295ce870b07029bfcdb2dce28d959f2815b16f81798';
+script.add(Buffer.from(generatorX, 'hex'))
+      .add(bsv.Opcode.OP_ADD);                         // z + Gₓ
+
+// Modular reduction with secp256k1 order
+const secp256k1Order = 'fffffffffffffffffffffffffffffffebaaedce6af48a03bbfd25e8cd0364141';
+script.add(Buffer.from(secp256k1Order, 'hex'))
+      .add(bsv.Opcode.OP_MOD);                         // (z + Gₓ) mod n
+
+// Convert to DER format and verify
+addDERConversion(script);
+script.add(Buffer.from([SIGHASH_ALL | SIGHASH_FORKID]))
+      .add(bsv.Opcode.OP_CAT)
+      .add(Buffer.from(publicKey, 'hex'))  
+      .add(bsv.Opcode.OP_CHECKSIG);                    // Verify signature
+```
+
+## Advanced Covenant Patterns
+
+### 1. Basic PUSHTX Covenant
+
+Pushes current transaction to stack for validation:
+
+```javascript
+const covenant = new CovenantInterface();
+
+const pushtxCovenant = covenant.createAdvancedCovenant('pushtx', {
+  publicKey: '0279be667ef9dcbbac55a06295ce870b07029bfcdb2dce28d959f2815b16f81798',
+  enforceOutputs: true,
+  sighashType: 0x41
+});
+```
+
+**Use cases**: Transaction introspection, output validation, covenant chaining
+
+### 2. Perpetually Enforcing Locking Script (PELS)
+
+Forces all future transactions to maintain same rules:
+
+```javascript
+const pels = covenant.createAdvancedCovenant('perpetual', {
+  publicKeyHash: '751e76e8199196d454941c45d1b3a323f1433bd6',
+  feeDeduction: 512,      // Deduct 512 satoshis per transaction
+  enforceScript: true,    // Must use same locking script
+  enforceValue: true      // Must preserve value (minus fees)
+});
+```
+
+**Use cases**: 
+- Certificate authority attestation chains
+- Token contracts with perpetual rules
+- Multi-party escrow with ongoing enforcement
+
+### 3. Transaction Introspection
+
+Analyzes specific transaction fields via preimage:
+
+```javascript
+const introspection = covenant.createAdvancedCovenant('introspection', {
+  validateInputs: false,
+  validateOutputs: true,
+  validateSequence: false, 
+  validateLocktime: false
+});
+```
+
+**Use cases**: Selective validation, complex multi-party rules, conditional logic
+
+### 4. Custom Covenant Construction
+
+For advanced developers needing full control:
+
+```javascript
+// Access full BSV API through covenant interface
+const script = new covenant.bsv.Script();
+
+// Build custom covenant logic
+script.add(bsv.Opcode.OP_DUP)
+      .add(bsv.Opcode.OP_HASH160)
+      .add(pubkeyHash)
+      .add(bsv.Opcode.OP_EQUALVERIFY);
+
+// Add PUSHTX validation
+covenant._addPushtxSignature(script, {
+  publicKey: publicKey,
+  sighashType: sighashType
+});
+```
+
+## Implementation Examples
+
+### Example 1: Token Transfer Covenant
+
+```javascript
+const tokenCovenant = covenant.bsv.Script()
+  // Validate minimum amount
+  .add(bsv.Opcode.OP_DUP)
+  .add(Buffer.from('e803000000000000', 'hex')) // 1000 satoshis minimum
+  .add(bsv.Opcode.OP_GREATERTHANOREQUAL)
+  .add(bsv.Opcode.OP_VERIFY)
+  
+  // PUSHTX validation
+  .add(covenant._buildPushtxScript({
+    enforceOutputs: true,
+    publicKey: tokenOwnerKey
+  }))
+  
+  // Transfer to new owner
+  .add(bsv.Opcode.OP_DUP)
+  .add(bsv.Opcode.OP_HASH160) 
+  .add(newOwnerHash)
+  .add(bsv.Opcode.OP_EQUALVERIFY)
+  .add(bsv.Opcode.OP_CHECKSIG);
+```
+
+### Example 2: Multi-signature with Timelock
+
+```javascript
+const timelockCovenant = covenant.bsv.Script()
+  // Check if timelock has expired
+  .add(Buffer.from('40e20100', 'hex')) // Block height 123456
+  .add(bsv.Opcode.OP_CHECKLOCKTIMEVERIFY)
+  .add(bsv.Opcode.OP_DROP)
+  
+  // 2-of-3 multisig after timelock
+  .add(bsv.Opcode.OP_2)
+  .add(pubkey1.toBuffer())
+  .add(pubkey2.toBuffer()) 
+  .add(pubkey3.toBuffer())
+  .add(bsv.Opcode.OP_3)
+  .add(bsv.Opcode.OP_CHECKMULTISIG);
+```
+
+### Example 3: Enhanced Transaction Usage
+
+```javascript
+// Create covenant transaction with caching and error reporting
+const covenantTx = covenant.createCovenantTransaction({
+  inputs: [{
+    txId: prevTxId,
+    outputIndex: 0,
+    script: lockingScript,
+    satoshis: inputSatoshis
+  }],
+  outputs: [{
+    address: outputAddress,
+    satoshis: outputSatoshis
+  }]
+});
+
+// Get cached preimage with enhanced parsing
+const preimage = covenantTx.getPreimage(0, lockingScript, inputSatoshis);
+const parsedPreimage = new CovenantPreimage(preimage);
+
+// Sign with covenant-compatible signature
+const privateKey = new bsv.PrivateKey('L1...');
+covenantTx.signInput(0, privateKey, lockingScript, inputSatoshis);
+
+// Verify with enhanced error reporting
+const isValid = covenantTx.verify();
+console.log('Transaction valid:', isValid);
+```
+
+## Security Considerations
+
+### 1. Parameter Fixing Requirements
+
+From nChain's security analysis, these parameters **MUST** be fixed in locking script:
+
+- **Public key**: Prevents signature malleability
+- **Ephemeral key (k)**: Prevents transaction ID changes  
+- **Sighash flag**: Controls which transaction parts are signed
+
+### 2. DER Canonicalization
+
+Always ensure `s ≤ n/2` to prevent transaction malleability:
+
+```javascript
+// Canonical s value check
+const secp256k1HalfOrder = '7fffffffffffffffffffffffffffffff5d576e7357a4501ddfe92f46681b20a0';
+script.add(bsv.Opcode.OP_DUP)
+      .add(Buffer.from(secp256k1HalfOrder, 'hex'))
+      .add(bsv.Opcode.OP_GREATERTHAN)
+      .add(bsv.Opcode.OP_IF)
+      .add(Buffer.from(secp256k1Order, 'hex'))
+      .add(bsv.Opcode.OP_SWAP)  
+      .add(bsv.Opcode.OP_SUB)
+      .add(bsv.Opcode.OP_ENDIF);
+```
+
+### 3. Circular Reference Handling
+
+Some preimage fields cannot be fixed in locking script due to circular references:
+
+- **hashPrevouts**: Contains transaction ID being created
+- **Previous locking script**: Contains itself 
+- **Input outpoint**: Contains transaction ID being created
+
+Use pre-images and hash validation for these fields.
+
+### 4. Script Size Considerations
+
+PUSHTX scripts can be large (~1KB optimized). Consider:
+
+- **Transaction fees**: Larger scripts cost more
+- **Block size limits**: Plan for efficient packing
+- **Optimization techniques**: Alt stack usage, endianness operations
+
+## Performance Optimization
+
+### 1. Alt Stack Usage
+
+Reduce script size by storing constants on alt stack:
+
+```javascript
+// Store Gₓ and n on alt stack for reuse
+script.add(Buffer.from(generatorX, 'hex'))
+      .add(bsv.Opcode.OP_TOALTSTACK)
+      .add(Buffer.from(secp256k1Order, 'hex'))
+      .add(bsv.Opcode.OP_TOALTSTACK);
+
+// Reference from alt stack later
+script.add(bsv.Opcode.OP_FROMALTSTACK) // Retrieve stored values
+      .add(bsv.Opcode.OP_ADD);
+```
+
+### 2. Endianness Optimization
+
+Minimize endianness reversal operations:
+
+```javascript
+// Group consecutive operations to reduce reversals
+// Use precomputed little-endian constants where possible
+const locktime_le = Buffer.from('00000000', 'hex'); // Already little-endian
+const sighash_le = Buffer.from('41000000', 'hex');  // Already little-endian
+```
+
+### 3. Preimage Caching
+
+Cache preimages to avoid recomputation:
+
+```javascript
+const covenantTx = covenant.createCovenantTransaction(config);
+// Preimage automatically cached by input/script/satoshi combination
+const preimage1 = covenantTx.getPreimage(0, script1, satoshis1); // Computed
+const preimage2 = covenantTx.getPreimage(0, script1, satoshis1); // From cache
+```
+
+### 4. Script Optimization Techniques
+
+From nChain paper optimizations:
+
+- **k=a=1 optimization**: Simplifies signature to `s = z + Gₓ mod n`
+- **Consecutive field grouping**: Group items 1-7 together 
+- **Fee deduction optimization**: Built into value computation
+- **Output construction from preimage**: Reuse previous output data
+
+## Production Guidelines
+
+### 1. Testing Requirements
+
+Before mainnet deployment:
+
+```javascript
+// Comprehensive validation testing
+const validation = covenant.validateCovenant(
+  transaction, 
+  inputIndex, 
+  unlockingScript, 
+  lockingScript
+);
+
+console.log('Validation result:', validation.toString());
+if (!validation.isValid) {
+  throw new Error(`Covenant validation failed: ${validation.message}`);
+}
+```
+
+### 2. Error Handling
+
+Implement robust error handling:
+
+```javascript
+try {
+  const pushtxCovenant = covenant.createAdvancedCovenant('pushtx', params);
+  const covenantTx = covenant.createCovenantTransaction(config);
+  const verified = covenantTx.verify();
+  
+  if (!verified) {
+    throw new Error('Transaction verification failed');
+  }
+} catch (error) {
+  console.error('Covenant creation error:', error.message);
+  // Implement fallback or retry logic
+}
+```
+
+### 3. Parameter Validation
+
+Validate all parameters before script creation:
+
+```javascript
+function createProductionCovenant(type, params) {
+  // Validate required parameters
+  if (type === 'perpetual' && !params.publicKeyHash) {
+    throw new Error('publicKeyHash required for perpetual covenant');
+  }
+  
+  if (params.sighashType && !isValidSighashType(params.sighashType)) {
+    throw new Error('Invalid sighash type');
+  }
+  
+  return covenant.createAdvancedCovenant(type, params);
+}
+```
+
+### 4. Documentation and Auditability  
+
+Document all covenant logic for security audits:
+
+```javascript
+/**
+ * Production Covenant: Token Transfer with Rules
+ * 
+ * Security properties:
+ * - Enforces minimum transfer amount (1000 satoshis)
+ * - Validates new owner via P2PKH
+ * - Uses PUSHTX for transaction introspection  
+ * - DER canonicalization prevents malleability
+ * 
+ * Audit trail: Created by createTokenCovenant() v3.1.1
+ */
+const tokenCovenant = createTokenCovenant({
+  minAmount: 1000,
+  newOwner: publicKey,
+  enforceRules: true
+});
+```
+
+## Advanced Usage Patterns
+
+### 1. Covenant Chaining
+
+Link multiple covenants in sequence:
+
+```javascript
+// First covenant: Token creation
+const creationCovenant = covenant.createAdvancedCovenant('pushtx', {
+  enforceOutputs: true,
+  publicKey: creatorKey
+});
+
+// Second covenant: Token transfer (references first)
+const transferCovenant = covenant.createAdvancedCovenant('perpetual', {
+  publicKeyHash: ownerHash,
+  feeDeduction: 100,
+  enforceScript: true
+});
+
+// Chain covenants in transaction outputs
+tx.addOutput(new bsv.Transaction.Output({
+  script: creationCovenant,
+  satoshis: 1000000
+})).addOutput(new bsv.Transaction.Output({
+  script: transferCovenant, 
+  satoshis: 999900
+}));
+```
+
+### 2. Multi-party Covenant Validation
+
+Validate complex multi-party scenarios:
+
+```javascript
+// Create covenant requiring multiple signatures with timelock
+const multiPartyCovenant = covenant.bsv.Script()
+  .add(bsv.Opcode.OP_IF)
+    // Path 1: All parties agree (2-of-3)
+    .add(bsv.Opcode.OP_2)
+    .add(party1Key.toBuffer())
+    .add(party2Key.toBuffer()) 
+    .add(party3Key.toBuffer())
+    .add(bsv.Opcode.OP_3)
+    .add(bsv.Opcode.OP_CHECKMULTISIG)
+  .add(bsv.Opcode.OP_ELSE)
+    // Path 2: Timelock + arbitrator
+    .add(Buffer.from('40e20100', 'hex')) // Block 123456
+    .add(bsv.Opcode.OP_CHECKLOCKTIMEVERIFY)
+    .add(bsv.Opcode.OP_DROP)
+    .add(arbitratorKey.toBuffer())
+    .add(bsv.Opcode.OP_CHECKSIG)
+  .add(bsv.Opcode.OP_ENDIF);
+
+// Add PUSHTX validation for transaction introspection
+covenant._addPushtxSignature(multiPartyCovenant, {
+  publicKey: validatorKey,
+  sighashType: 0x41
+});
+```
+
+## Conclusion
+
+The SmartLedger-BSV advanced covenant framework provides enterprise-grade capabilities for sophisticated Bitcoin SV applications. By combining rigorous BIP143 preimage parsing with proven nChain PUSHTX techniques, developers can create secure, efficient, and powerful covenant-based systems.
+
+### Key Benefits
+
+- **Standards Compliant**: Full BIP143 and nChain WP1605 compatibility
+- **Production Ready**: Comprehensive error handling and validation
+- **Dual-Level API**: High-level simplicity with granular control
+- **Security Focused**: Proven techniques with formal security analysis
+- **Performance Optimized**: Efficient script generation and caching
+
+For additional support and advanced use cases, refer to the complete API documentation and example implementations in the SmartLedger-BSV repository.
+
+---
+
+*This guide is part of SmartLedger-BSV v3.1.1+ - Advanced Covenant Development Framework*

package/docs/COVENANT_DEVELOPMENT_RESOLVED.md

@@ -0,0 +1,169 @@
+# 🎯 COVENANT DEVELOPMENT RESOLVED ✅
+
+## Issue Resolution
+
+Your development team reported:
+
+> ❌ What Still Doesn't Work:
+> - Manual transaction signature creation for covenants
+> - Signatures created manually don't match transaction.sign() output  
+> - Same SCRIPT_ERR_SIG_DER_INVALID_FORMAT and SCRIPT_ERR_UNKNOWN_ERROR errors
+
+**✅ STATUS: COMPLETELY RESOLVED in SmartLedger-BSV v3.1.1**
+
+## The Fix
+
+The issue was an **API documentation gap**, not a library bug. We've identified the correct API for manual signature creation.
+
+### ❌ Wrong Approach (Causes Errors)
+```javascript
+// DON'T USE - This causes signature mismatches
+const hash = bsv.Transaction.sighash.sighash(tx, sighashType, inputIndex, script, satoshisBN);
+const signature = bsv.crypto.ECDSA.sign(hash, privateKey);
+```
+
+### ✅ Correct Approach (Fixed)
+```javascript
+// ✅ USE THIS - Matches transaction.sign() exactly
+const signature = bsv.Transaction.sighash.sign(
+  transaction,
+  privateKey, 
+  sighashType,
+  inputIndex,
+  lockingScript,
+  satoshisBN
+);
+```
+
+## 🚀 Ready-to-Use Functions
+
+Copy these functions for your covenant projects:
+
+```javascript
+const bsv = require('smartledger-bsv');
+
+/**
+ * Create manual signature that matches transaction.sign()
+ */
+function createManualSignature(transaction, privateKey, inputIndex, lockingScript, satoshis) {
+  const sighashType = bsv.crypto.Signature.SIGHASH_ALL | bsv.crypto.Signature.SIGHASH_FORKID;
+  
+  const signature = bsv.Transaction.sighash.sign(
+    transaction,
+    privateKey,
+    sighashType,
+    inputIndex,
+    lockingScript,
+    new bsv.crypto.BN(satoshis)
+  );
+  
+  return Buffer.concat([
+    signature.toDER(),
+    Buffer.from([sighashType])
+  ]);
+}
+
+/**
+ * Get preimage for covenant validation
+ */
+function getCovenantPreimage(transaction, inputIndex, lockingScript, satoshis) {
+  const sighashType = bsv.crypto.Signature.SIGHASH_ALL | bsv.crypto.Signature.SIGHASH_FORKID;
+  
+  return bsv.Transaction.sighash.sighash(
+    transaction,
+    sighashType,
+    inputIndex,
+    lockingScript,
+    new bsv.crypto.BN(satoshis)
+  );
+}
+```
+
+## 📋 Working Example
+
+```javascript
+const bsv = require('smartledger-bsv');
+
+// Your UTXO
+const utxo = {
+  txid: 'your_txid_here',
+  vout: 0,
+  script: 'your_script_hex',
+  satoshis: 100000
+};
+
+// Create transaction
+const tx = new bsv.Transaction()
+  .from(utxo)
+  .to('destination_address', 99000);
+
+// Get locking script
+const lockingScript = bsv.Script.fromHex(utxo.script);
+
+// ✅ Create manual signature (now works!)
+const signature = createManualSignature(tx, privateKey, 0, lockingScript, utxo.satoshis);
+
+// ✅ Get preimage for covenant logic
+const preimage = getCovenantPreimage(tx, 0, lockingScript, utxo.satoshis);
+
+// Create unlocking script
+const unlockingScript = new bsv.Script()
+  .add(signature)
+  .add(privateKey.publicKey.toBuffer());
+
+tx.inputs[0].setScript(unlockingScript);
+
+// ✅ No more SCRIPT_ERR_SIG_DER_INVALID_FORMAT!
+console.log(`Transaction valid: ${tx.verify()}`); // true
+```
+
+## 🔧 Test Files
+
+We've created comprehensive test files to verify the fix:
+
+1. **`covenant_manual_signature_resolved.js`** - Complete demonstration with comparisons
+2. **`covenant_signature_template.js`** - Ready-to-copy template functions
+3. **`custom_script_signature_test.js`** - Full custom script test suite
+
+Run any of these to verify the fix:
+
+```bash
+node covenant_manual_signature_resolved.js
+node covenant_signature_template.js  
+node custom_script_signature_test.js
+```
+
+## 📦 Installation
+
+```bash
+npm install smartledger-bsv@3.1.1
+# or
+npm install @smartledger/bsv@3.1.1
+```
+
+## ✅ Verification Results
+
+```
+✅ Manual signature creation: WORKING
+✅ Signatures match transaction.sign(): WORKING  
+✅ No SCRIPT_ERR_SIG_DER_INVALID_FORMAT: RESOLVED
+✅ No SCRIPT_ERR_UNKNOWN_ERROR: RESOLVED
+✅ Preimage access for covenants: WORKING
+✅ All transaction validation: PASSING
+```
+
+## 🎉 Summary
+
+**The covenant functionality is now ready!** 
+
+- ✅ Manual signature creation works perfectly
+- ✅ Signatures match `transaction.sign()` output exactly  
+- ✅ No more signature format errors
+- ✅ Full preimage access for covenant validation
+- ✅ Production-ready for complex covenant projects
+
+Your team can now proceed with covenant development using the API patterns shown above.
+
+---
+
+**SmartLedger-BSV v3.1.1** - Complete BSV covenant development support ✅