DA-05 · LESSON 03

BIP340 commitment hash

KEY DEFINITIONS

Terms used in this lesson

BIP340: The Bitcoin Improvement Proposal specifying Schnorr signatures for the secp256k1 curve.
Oracle: A system that reports outside information, such as a market price, for use by a protocol.
UTF-8: A standard variable-length byte encoding for Unicode text.
SHA-256: A cryptographic hash function used throughout Bitcoin to produce fixed-size 256-bit digests.
Collateral: An asset pledged against a debt; it can be used to cover the debt if agreed conditions are breached.

Wallet and oracle compute a tagged commitment over oracle key, network, base price, timestamp, and threshold price.

55 min Difficulty 4/5 Not started

VISUAL MODEL

See the whole mechanism before going step by step

Use the diagrams to orient yourself. Then the guided explanation below teaches every part in depth.

4 explanatory views

CONCEPT-SPECIFIC MAP · ducat vaultA Ducat action moves one Bitcoin-anchored vault state to a successorSelect any state to inspect its exact role.

RELATIONSHIP MAPInputs, rule, and outputs

01
PREDECESSORCurrent vault outpoint
The current Bitcoin output anchors collateral and identifies the state being spent.
02
REQUESTBIP340 commitment hash
The BIP340 commitment hash workflow proposes one exact action and successor state.
03
POLICYProfile, oracle, signatures
Applicable policy, price evidence, authorization, and transaction shape are checked.
04
BITCOIN SPENDScript-valid transaction
Bitcoin miners and nodes can include only a transaction that satisfies Bitcoin rules.
05
SUCCESSORNew outpoint and state
Ducat validators reconstruct debt, collateral, token, and account changes from the confirmed transaction.

Rule shown: Bitcoin checks the spend; Ducat components independently reconstruct and validate the additional protocol state.

STAGE 1 OF 5PREDECESSOR: Current vault outpoint

The current Bitcoin output anchors collateral and identifies the state being spent.

Governing relationship: Bitcoin checks the spend; Ducat components independently reconstruct and validate the additional protocol state. Complete path: 1. PREDECESSOR, Current vault outpoint. The current Bitcoin output anchors collateral and identifies the state being spent. 2. REQUEST, BIP340 commitment hash. The BIP340 commitment hash workflow proposes one exact action and successor state. 3. POLICY, Profile, oracle, signatures. Applicable policy, price evidence, authorization, and transaction shape are checked. 4. BITCOIN SPEND, Script-valid transaction. Bitcoin miners and nodes can include only a transaction that satisfies Bitcoin rules. 5. SUCCESSOR, New outpoint and state. Ducat validators reconstruct debt, collateral, token, and account changes from the confirmed transaction.

1. State transitionWhat exists, what changes, and what results

BEFORE

Use oracle public key 84b2c2c708e6bb8c4ae6bdf498877a2d61de7d0fa2bd1430059598b58e27ad91, network testnet4, base price 100,000, timestamp 1,785,776,400, collateral rate 1.5, an…

MECHANISM

Hash the UTF-8 tag ducat/price_contract_commit, then prefix the message with that tag hash twice.

AFTER

The derived threshold is 90,000 and the tagged commitment is 921165d9559cdf66632513c565ae6ee0b4b8f2822a094378ddb01edddae6fb9a. Any changed committed byte produces a different…

Text equivalent: Starting from Use oracle public key 84b2c2c708e6bb8c4ae6bdf498877a2d61de7d0fa2bd1430059598b58e27ad91, network testnet4, base price 100,000, timestamp 1,785,776,400, collateral rate 1.5, and liquidation threshold ratio 1.35. These are… The mechanism begins when Hash the UTF-8 tag ducat/price_contract_commit, then prefix the message with that tag hash twice. The resulting lesson is The derived threshold is 90,000 and the tagged commitment is 921165d9559cdf66632513c565ae6ee0b4b8f2822a094378ddb01edddae6fb9a. Any changed committed byte produces a different result.

2. Mechanism pathSelect a stage to inspect its job

STAGE 1 OF 4

Build the domain tag

Hash the UTF-8 tag ducat/price_contract_commit, then prefix the message with that tag hash twice.

Complete path: 1. Build the domain tag: Hash the UTF-8 tag ducat/price_contract_commit, then prefix the message with that tag hash twice. 2. Serialize fields exactly: Append 32-byte oracle public key, network UTF-8 bytes, big-endian 32-bit base price, big-endian 32-bit base timestamp, and big-endian 32-bit threshold price. 3. Hash the commitment: SHA-256 of the tagged prefix and serialized fields produces the commitment hash. 4. Recompute independently: Wallet and oracle must use identical bytes; any changed key, network, price, timestamp, or encoding produces another hash.

3. Rule and failure boundaryWhat accepts the result and where it can stop

ACCEPTED PATH

The worked case executes the named inputs and checks in the displayed order. Wallet and oracle must use identical bytes; any changed key, network, price, timestamp, or encoding produces another hash.

CHANGED CONDITION

A missing, malformed, stale, unauthorized, or inconsistent required input stops at its first named boundary. The commitment fixes the fields and resists substitution. Public low-entropy values may be guessed; secrecy comes from the separately derived threshol…

Important distinction: A commitment hash hides a price because hashes are encryption. The commitment fixes the fields and resists substitution. Public low-entropy values may be guessed; secrecy comes from the separately derived threshold key.

Text equivalent: The accepted path is enforced by The worked case executes the named inputs and checks in the displayed order. Wallet and oracle must use identical bytes; any changed key, network, price, timestamp, or encoding produces another hash. If the required condition changes, A missing, malformed, stale, unauthorized, or inconsistent required input stops at its first named boundary. The commitment fixes the fields and resists substitution. Public low-entropy values may be guessed; secrecy comes from the separately derived threshold key.

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Learn the idea

A commitment fixes exact data before later use. Ducat uses BIP340-style tagged hashing for domain separation, meaning the same bytes cannot be confused with an unrelated hash context.

GUIDED EXPLANATION1/4 ideas inspected

Build the domain tag

Hash the UTF-8 tag ducat/price_contract_commit, then prefix the message with that tag hash twice.

The worked example follows the explanation

Inspect every idea above to open it.

Important distinction“A commitment hash hides a price because hashes are encryption.”

The commitment fixes the fields and resists substitution. Public low-entropy values may be guessed; secrecy comes from the separately derived threshold key.

FINISH LEARNING FIRST

The questions unlock after every required learning activity

Inspect every guided idea, open the worked example, rebuild its mechanism, and complete the deterministic lesson tool. Your progress is saved automatically.