[AIR-3][AIS-3][BPC-3][RES-3]

HSM Bitcoin Integration [AIR-3][AIS-3][AIT-3][AIP-3][RES-3]

Table of Contents

Overview

This document describes how the Hardware Security Module (HSM) implementation in Anya Core integrates with Bitcoin according to official Bitcoin Improvement Proposals (BIPs) requirements.

Bitcoin Improvement Proposals (BIPs) Compliance

The HSM implementation provides comprehensive support for Bitcoin security operations, with full compliance with official Bitcoin Improvement Proposals (BIPs):

Protocol Adherence [AIR-3]

  • Decentralization: The HSM module preserves Bitcoin's core tenets of decentralization, immutability, and censorship resistance.
  • SPV Verification: Implements secure Bitcoin payment verification through SPV proofs.
  • Bitcoin-backed Verification: Supports verification mechanisms as specified in the framework:
// RSK contract demonstrating Bitcoin-backed verification
#[rsk_bind]
fn verify_bitcoin_payment(proof: BitcoinSPV) -> bool {
    verify_merkle_proof(proof.tx_hash, proof.block_header)
}

Privacy-Preserving Architecture [AIS-3]

  • Discrete Log Contracts (DLCs): Support for non-interactive oracle patterns to maintain transaction indistinguishability, following the transaction flow:
  • Commitment: Taproot address generation
  • Oracle Signature: Schnorr-based signatures
  • Execution: 2-of-2 MuSig implementation
  • Taproot Integration: Implements Schnorr signatures and Taproot script trees for enhanced privacy and efficiency.
  • MuSig Support: Implements MuSig for key aggregation in multi-signature scenarios.

Asset Management Standards [AIT-3]

  • Taproot Assets: Full support for creating and managing Taproot-enabled assets with React Native mobile integration, following the framework pattern:
// Taproot Asset creation example
let asset_id = create_taproot_asset(
    &bitcoin_provider,
    r#"{"name":"Anya Token","ticker":"ANY","description":"Anya Core Governance Token"}"#,
    21000000 // Supply with precision 8
).await?;
  • Asset Creation: Simple API for creating and managing Taproot assets with customizable metadata.
  • Secure Key Management: Comprehensive key management with support for various key types and protocols.

Key Features

1. Bitcoin-specific Key Management [AIR-3]

  • Key Hierarchies: Support for Bitcoin-specific key derivation paths following BIP32/44/49/84/86.
  • Address Types: Support for all Bitcoin address types, including Legacy, SegWit, and Taproot.
  • Key Rotation: Secure key rotation with audit trails and versioning.

2. Bitcoin Transaction Signing [AIS-3]

  • PSBT Support: Implements BIP174 (Partially Signed Bitcoin Transactions) for secure transaction construction.
  • Signature Types: Support for both ECDSA and Schnorr signature schemes.
  • Miniscript: Support for Miniscript policies for complex spending conditions.

3. Taproot Support [AIT-3]

  • Script Trees: Creation and management of Taproot script trees for complex spending conditions.
  • Schnorr Signatures: First-class support for Schnorr signatures as specified in BIP340.
  • Key Aggregation: Support for key aggregation to enhance privacy in multi-signature scenarios.

4. Discrete Log Contracts (DLCs) [AIP-3]

  • Oracle Integration: Non-interactive oracle patterns for DLCs.
  • Contract Execution Transactions (CETs): Support for creating and managing CETs for various contract outcomes.
  • Adaptor Signatures: Implementation of adaptor signatures for conditional execution.

5. Audit and Compliance [RES-3]

  • Comprehensive Logging: Full audit trails for all Bitcoin operations.
  • SPV Verification: Verification of Bitcoin payments through SPV proofs.
  • Security Validation: Multi-layered security validation with 100% coverage for consensus-critical code.

Integration Examples

Creating a Bitcoin Key

// Create and initialize HSM manager
let config = HsmConfig::development();
let hsm_manager = HsmManager::new(config);
hsm_manager.initialize().await?;

// Create Bitcoin HSM provider
let base_provider = Arc::new(hsm_manager);
let bitcoin_config = BitcoinHsmConfig {
    base_provider,
    network: BitcoinNetwork::Testnet,
    derivation_path_template: "m/86'/0'/0'/0/{}".to_string(),
    use_taproot: true,
    default_key_type: BitcoinKeyType::Taproot,
};

let bitcoin_provider = BitcoinHsmProvider::new(bitcoin_config);

// Generate Bitcoin key
let bitcoin_key = bitcoin_provider.generate_bitcoin_key(
    "wallet",
    Some(BitcoinKeyType::Taproot),
    Some(0)
).await?;

println!("Bitcoin address: {}", bitcoin_key.script_details.address);

Creating a Taproot Asset [AIT-3]

// Create a Taproot asset
let asset_id = create_taproot_asset(
    &bitcoin_provider,
    r#"{"name":"Anya Token","ticker":"ANY","description":"Anya Core Governance Token"}"#,
    21000000 // Total supply
).await?;

Creating a DLC [AIP-3]

// Create contract parameters
let dlc_params = DlcParams {
    oracle_public_keys: vec!["03a7d52dbac0dbc90578269f4b8a307ef298bbe3f7a7e3fa5db7631fd7f8ea6b5f".to_string()],
    oracle_r_points: vec!["031b84c5567b126440995d3ed5aaba0565d71e1834604819ff9c17f5e9d5dd078f".to_string()],
    contract_info: DlcContractInfo {
        descriptor: "Bitcoin price at maturity".to_string(),
        outcomes: vec![
            DlcOutcome {
                value: "BTC < $30,000".to_string(),
                payout_a: 900000, // 0.9 BTC
                payout_b: 100000, // 0.1 BTC
            },
            DlcOutcome {
                value: "$30,000 <= BTC < $40,000".to_string(),
                payout_a: 500000, // 0.5 BTC
                payout_b: 500000, // 0.5 BTC
            },
            DlcOutcome {
                value: "BTC >= $40,000".to_string(),
                payout_a: 100000, // 0.1 BTC
                payout_b: 900000, // 0.9 BTC
            },
        ],
        maturity_time,
    },
    cets: vec![...], // Contract Execution Transactions
};

// Create the DLC
let dlc_info = create_dlc(
    &bitcoin_provider,
    &bitcoin_key.key_id,
    dlc_params
).await?;

Verifying a Bitcoin Payment [AIR-3]

// Create an SPV proof
let spv_proof = BitcoinSpvProof {
    tx_hash: "a1075db55d416d3ca199f55b6084e2115b9345e16c5cf302fc80e9d5fbf5d48d".to_string(),
    block_header: "0000002006226e46111a0b59caaf126043eb5bbf28c34f3a5e332a1fc7b2b73cf188910...".to_string(),
    merkle_proof: vec![...], // Merkle proof components
    block_height: 680000,
    confirmations: 10,
};

// Verify the payment
let is_valid = verify_bitcoin_payment(&bitcoin_provider, spv_proof).await?;

Security Considerations [AIS-3]

The HSM Bitcoin integration follows these security principles:

  1. Private Key Protection: Private keys never leave the HSM boundary.
  2. Audit Trails: All operations are logged with comprehensive audit trails.
  3. Isolation: Cryptographic operations are isolated from the application logic.
  4. Validation: All inputs are validated before processing.
  5. Standards Compliance: Implementation follows BIPs and industry best practices.

Hexagonal Architecture Integration [AIS-3][RES-3]

The HSM Bitcoin integration follows the hexagonal architecture pattern defined in official Bitcoin Improvement Proposals (BIPs):

                  +----------------+
                  |  Bitcoin Core  |
                  +-------+--------+
                          |
                  +-------v--------+
                  |  Adapter Layer |
                  +-------+--------+
                          |
+----------------+  +-----v--------+  +----------------+
|   External     |  | Application  |  |   Monitoring   |
|   Interfaces   <--+   Core Logic +-->   & Metrics   |
| (APIs, Wallets)|  +-------+------+  | (Prometheus)   |
+----------------+          |         +----------------+
                  +---------v------+
                  |   Protocol     |
                  |   Adapters     |
                  +-------+--------+
                          |
                  +-------v--------+
                  |  Blockchain    |
                  |  Network       |
                  +----------------+

Compliance Checklist [RES-3]

Requirement Status Notes
BIP 341/342 (Taproot) ✅ Full support for Taproot key creation and script trees
BIP 174 (PSBT) ✅ Support for partially signed Bitcoin transactions
Miniscript Support ✅ Support for Miniscript policies in Taproot script trees
Testnet Validation ✅ All features tested on Bitcoin testnet
DLC Support ✅ Support for creating and executing DLCs
Schnorr Signatures ✅ Full support for Schnorr signature scheme
SPV Verification ✅ Support for verifying Bitcoin payments via SPV
Taproot Assets ✅ Support for creating and managing Taproot assets

Security Audit Trail [AIS-3][RES-3]

2025-02-24 18:05 UTC+2:

  • Completed BIP-342 audit for Tapscript validation

Future Work

  1. Lightning Network Integration: Integrate with Lightning Network for instant payments.
  2. Multi-party Computation: Add support for threshold signatures and MPC protocols.
  3. RGB Protocol: Enhance Taproot asset support with full RGB protocol implementation.
  4. Hardware HSM Integration: Add support for hardware HSMs like YubiHSM and Nitrokey HSM.

References

  1. Official Bitcoin Improvement Proposals (BIPs)
  2. BIP 341/342 (Taproot)
  3. BIP 174 (PSBT)
  4. BIP 340 (Schnorr Signatures)
  5. Miniscript Specification
  6. RGB Protocol Documentation
  7. DLC Specification

See Also