We are excited to introduce Banco, a Bitcoin trading protocol that facilitates non-interactive swaps among two or more parties utilizing Elements introspection opcodes.

Discover more about the protocol or start trading on the Liquid Testnet at banco.vulpem.com. Additionally, you have the option to host your Banco server to contribute liquidity.

What’s the Deal?

Non-interactivity is a sought-after feature in atomic swaps and various decentralized protocols. Over time, it has become clear that interactivity and state management can hinder the adoption of self-custodial applications in real-world scenarios. Existing alternatives often rely on co-signing schemes, necessitating participants to be online and accessible over the public internet, which compromises the privacy and user experience of trading participants.

Banco’s protocol eliminates the need for a trusted third party. It offers a non-custodial solution for traders and is capital-efficient for market makers, eliminating the necessity for a centralized order book and settlement server. Liquidity providers can deploy a straightforward automated bot that monitors the mempool for pending contracts to execute or via recursive covenants constructions to enable automated liquidity pools.

How Does This Benefit Bitcoin?

Banco enables BTC-to-BTC trades. Unlike current coinjoin schemes, which are highly interactive and require the use of specific wallets, Banco simplifies the process. It significantly expands the pool of potential liquidity providers; anyone can operate a taker bot or contribute to a covenant pool, fostering liquidity in an open and borderless network.

Design Goals

• Confidentiality: The protocol ensures confidentiality by default, allowing traders and providers to engage without disclosing their intentions publicly.
• Ease of Integration: The protocol is user-friendly and does not demand specific wallet integrations. Traders can fund trade contracts using any wallet that supports Taproot addresses.
• Liquidity Efficiency: Traders can initiate transactions that any liquidity provider can fulfill, provided the trader doesn’t cancel the transaction. This feature enables liquidity provision through automated bots, mitigating the risk of capital being locked for extended periods, as seen with time-locked atomic swaps.
• Decentralization: Banco is entirely decentralized, requiring no trusted third parties. It is non-custodial for traders and capital-efficient for market makers, without the need for centralized order book servers or settlement facilities. Takers can simply monitor the mempool for public contracts to fulfill.
• Operational Security: The protocol allows providers to operate in a pub-sub manner, monitoring a public channel (e.g., the mempool or Nostr) and broadcasting the spending transaction to execute the trade, eliminating the need for firewalls or publicly accessible IPs.

How It Works

Banco requires two blockchain transactions: one to fund the trade contract and another to either fulfill or cancel it. The trader (from now on the maker) can utilize any wallet to send and receive assets, while the provider (the taker) is an automated bot that executes trades by crafting fulfill transactions, incorporating funds to cover the trade amount enforced by the covenant in the trade contract.

The maker initiates by funding a trade contract, which a taker can fulfill without further input from the maker. The contract mandates that the first output of the spending transaction matches the requested value, asset, and script.

Once this funding transaction is visible in the mempool or shared privately, the taker can execute the contract by sending a fulfill transaction that spends the funding transaction’s output, adhering to the covenant’s constrained value, asset, and script.

Should the maker opt out of the trade, they can cancel the contract, a privilege exclusively held by the maker. Canceling involves sending a transaction that reverts the funding transaction’s output back to the maker.

Show Me the Opcodes

OP_0
OP_INSPECTOUTPUTSCRIPTPUBKEY
<MAKER_WITNESS_VERSION>
OP_EQUALVERIFY
<MAKER_WITNESS_PROGRAM>
OP_EQUALVERIFY
OP_0
OP_INSPECTOUTPUTASSET
OP_DROP
<MAKER_ASSET_TO_RECEIVE>
OP_EQUALVERIFY
OP_0
OP_INSPECTOUTPUTVALUE
OP_DROP
<MAKER_VALUE_TO_RECEIVE>
OP_EQUAL

Roadmap

• Integrate within Marina Wallet with a Swap interface.
• Automated trading pool that fulfills trades using a recursive covenant and oracle signed price attestations.
• Develop gRPC and JSON APIs for Banco server interaction.
• Enable Confidential Funding for confidential transactions.
• Utilize Nostr for public trading and Nostr DM for private exchanges.
• Investigate shared-secret generation for blinding factors in fulfill transactions.

Contribute

Banco is open-source, with a server reference implementation available on GitHub at https://github.com/vulpemventures/banco.

We are thrilled to announce one of our most exciting ventures to date — Marina. Marina is the ultimate gateway designed to access the Liquid Network directly from your browser.

Liquid is a sidechain-based settlement network for traders and exchanges, enabling faster, more confidential Bitcoin transactions and issuance of digital assets.

Over the past months, the Liquid ecosystem has been rapidly growing with several exchanges that are now supporting the network and an increasing number of financial services such as peer-to-peer lending and non-custodial atomic swaps.

Marina is a browser extension designed to streamline access to Liquid and foster an even greater adoption of the network. It enables users to easily send and receive Liquid assets such as Liquid Bitcoin (L-BTC) and Tether USDt. Web developers can benefit from Marina integration as a plug-and-play solution to integrate Liquid Network into their browser applications.

Use Cases

Thanks to Marina, exchanges like SideShiftAI and Liquiditi.io can now automatically fill the address fields and trigger the user to review and confirm transactions to make trades. Furthermore, interactions between Marina and non-custodial exchange protocols such as TDex can enable users to benefit from non-custodial atomic swaps directly from their own browser.

Features

• Generate an HD wallet with blinding keys
• Restore from mnemonic seed
• Receive and send any Liquid asset
• Connect your browser to the Liquid Network
• Share specific addresses only with websites you trust
• Auto-fill transactions and popup confirmation for signature
• Pay transactions fees with Tether USDt

Send USDt without owning LBTC

We have integrated Liquid.Taxi, our Liquid fee top-up service, directly into Marina. Thanks to this integration, It will now be possible to move around your Liquid assets without having to spend L-BTC for transaction fees. Instead, fees can be paid directly with Tether USDt.

“Marina is an exciting development in the Liquid ecosystem. Not only can you receive and send payments in Liquid-based assets directly from your browser, but your transaction fees can be paid in Liquid Tether, too! The Liquid network has just become a lot easier to use!” — Yuri de Gaia, Partner at Bitcoin Reserve

Developers can integrate Liquid in their browser app

Web developers who want to integrate Liquid Network can rely on the injected APIs offered by the Marina Web Provider to automatically fill inputs with Liquid addresses or to prompt a confirmation to make transactions.

Download Marina Wallet from Chrome Web Store

The extension is available in the Chrome Web Store and soon as Firefox Add-on.
The code is open-source and available here.

Today, we’re announcing Liquid Coach, a browser-based tool for Liquid developers and advanced users for doing operations like checking the balance of an address, creating and importing a PSET (Partial Signed Elements Transaction) or even sign it, all from their browser.

Features

• Load a blech32 confidential and bech32 unconfidential native segwit address
• Load an unconfidential wrapped segwit and legacy (confidential support coming soon!)
• Generate a mnemonic and derive an unconfidential native segwit address
• Select a custom Liquid explorer
• Provide an hex-encoded blinding key (if blech32 address) to unblind your utxos and watch the balance of your Liquid assets.
• L-BTC Faucet and Asset Mint on Regtest
• Create an unconfidential PSET with full control over inputs and outputs
• Add the Explicit Fee output
• Encode the PSET to base64
• Import base64 encoded unconfidential PSET and inspect and add inputs/outputs
• Sign with mnemonic or WIF

Network

The tool has been designed for developers and to mostly be used in regtest, although is possible to use it for Liquid mainnet too.

It uses a block explorer to connects and source blockchain data, it uses Blockstream.info for mainnet and an hosted instance of the regtest box Nigiri (tl;dr it adds on top of Blockstream Electrs a /faucet and /mint endpoint useful for regtest development along with automatic block mining)

You can use a local Nigiri as explorer, just select the Explorer button in the top-right of the page.

Limitations

Liquid.Coach is NOT meant to be used as a web-wallet for end-users. Use Blockstream Green instead.

There are few limitations, may or may not be fixed in the following iterations:

• You cannot load multiple addresses, just a single one.
• You can load a blech32 address and unblind the unspents, but you cannot create and sign a transaction with it. Cooperative blinding is kind of impossible with the current PSET spec.
• When you generate an address by default is unconfidential, so you can create and sign a transaction end to end.
• The generated mnemonic always uses the m/84'/0'/0'/0 derivation path

For any issue that may arise please open a ticket in the Github repository.

Today, we’re announcing Vulpem Notary, a blockchain-based notary service specifically tailored for enterprise workflows and distributed architectures.

We have created an abstraction layer that we offer as a cloud service, which helps database operators to create an indisputable chain of events that happened in the private infrastructure, without leaking any sensible information.

In this way, any observer can easily audit and verify any possible malicious attempt of tampering, both from an external attacker or an inside job and be able to demonstrate it ex-post.

This allows to cryptographically prove to other parties (eg. auditors or consortium partners) that some data existed prior a certain point in time.

How does it work?

We provide a lightweight and standalone client, that can be easily installed on the majors cloud platforms, which oversees the low-level replication of the distributed database cluster (MySql and MongoDB are supported for now) and takes care to split, makes a one-way fingerprint, timestamp, and queue for a public and indisputable attestation.
Thanks to batching and distributed calendar architecture, we can stamp and notarize petabytes of data and embed them on the Bitcoin blockchain.

Why?

In any centralized architecture that implies a database, the person with admin privileges (the owner, employees, contractors) can simply delete or modify any data stored in it and no-one, even with the help of modern digital forensics tools, can demonstrate to an external viewer without any doubts that this malicious action has happened.

While this concern seems to be solved for the enterprises by “private blockchains” or “distributed ledger technology”, we believe that Vulpem Notary is a more elegant, more scalable and friction-less solution using open time-stamping technology on top of Bitcoin, acting as a neutral notary.

There is no need to move any data to a new architecture and scrap your existent systems, just get an API key, install the daemon and you are ready to go! The same guarantees of so-called private-blockchains, without changing any lines of code!

Lastly, the number of features, years or even decades of extensive testing and reliability of a common distributed database isn’t comparable to any of the primordial private blockchain solutions like Hyperledger and such.

How to get an API Key?

To enroll for an API Key for the private beta, subscribe here

Overview

Bitcoin Nigiri is a cross-platform command line tool that allows to quickly fire up a personal regtest Bitcoin blockchain along with a Liquid sidechain, Electrum explorer and other special developer tools.
You can run tests and execute commands locally for development or in a continuous integration pipeline.

At the moment Docker and Compose are used under the hood to ensure a reproducible installation. Bare metal installations for major platforms are coming.

Get started

• Download and install nigiri command line interface

$ curl https://getnigiri.vulpem.com | bash

• Launch Docker daemon (Mac OSX)

$ open -a Docker

• Close and reopen your terminal, then start Bitcoin and Liquid

$ nigiri start --liquid

That’s it.

Go to http://localhost:5000 for quickly inspect the Bitcoin blockchain or http://localhost:5001 for Liquid.

Commands

Start Bitcoin

nigiri start

Start Bitcoin and Liquid

nigiri start --liquid

Stop

nigiri stop

Delete

nigiri stop --delete

Version

nigiri --version

Log

To see services (node, electrs, esplora, chopsticks) pass as first argument.
Pass an optional flag --liquid for Liquid related services.

nigiri logs SERVICE --liquid

What’s inside?

Data directory

When starting, you can specify a directory where all your container will stay with --datadir flag. By default it will be ~/.nigiri

You can fully configure your own environment, just by tweaking ports and containers via compose and conf files in ~/.nigiri/resources

Bitcoin + Liquid nodes

Bitcoin and Liquid (if selected with —liquid ) rpc interfaces are exposed both with user admin1 and password 123 .

At the moment the nodes are started on regtest network. testnet and mainnet compose files will be released soon.

Electrum & Nigiri Chopstick

For each chain an Electrum server is started and exposes and the rpc interface. We use the Blockstream Electrs fork that and wrap the REST interface with Nigiri Chopstick, an API pass-through that simply proxies requests to Electrs and adds some handy features for a developer sandbox:

• POST endpoint /faucet to get Bitcoins or Liquid Bitcoin with a application/json body as {"address":"yourBitcoinOrLiquidAddr"}
• automatic block mining once /tx POST endpoint’s called

Esplora

Quickly inspect the blocks via the browser using the Esplora explorer, deployed for both bitcoin and liquid.

Do you like Nigiri?

Give us a star on GitHub!

How an organization can securely manage funds having an extra-layer of security before sending any satoshi, due to multiple cosigners

• PC (Linux, Mac, Windows)
• Ledger Nano S (one for each cosigner)
• Electrum (https://electrum.org/#download)
• PGP (optional)

This walk-through is intended to be for a distributed team/organization that needs to setup and use a multi-signature remotely.
Our fictionary company, Hodl Inc, with 100 bitcoin to store in a multisig, the execs Alice the CFO, Bob the CEO and Charlie the CTO are going to be the cosigners.

Procedure

1. Provisioning

The first step to get started is to collect all the public keys of the cosigner. Let’s say Charlie, the CTO, take care of this. He will contact Alice and Bob asking them their public keys in order to specify them in the xpub needed to create the multi-sig.

Secure channel

Since Hodl Inc is a remote company, they will use internet as a communication channel (you don’t say?!). Charlie needs to take precautions to not leave traces about his identity over the net. This is needed to not become target of an attack. This one of the many reasons why he will use PGP to encrypt emails and attachments. (Since he has a company-paid G Suite account he will use the FlowCrypt Chrome extension)

Get the public key from Ledger Nano S

To recover the public key on the Ledger Nano S, Alice (and Bob) needs to do the following:

Connect the Ledger and install in it the Bitcoin Wallet app trough the Ledger Manager Chrome app.

Now Alice (and Bob) needs to run Electrum on the computer. Once it’s launched, she needs to:

• File > New/Restore new wallet
• Insert a name to recognize the wallet
• Then select Standard Wallet
• Use a hardware device

as in the following screens

If a “No hardware device detected” message is displayed, besure to have the ledger unlocked (PIN inserted) and press back and next to trigger again the connection. Alice should see this screen and press Next

Now Alice (and Bob) has to be sure be sure to insert the right derivation path. If he/she used a BIP49 (most likely) select p2sh-segwit BIP49 or manually insert

In the next screen Alice encrypt her metadata wallet file and it’s done!

In order to get the Master Public Key, Alice has to select in the menu Wallet > Information and she can get the Master Public Key. If BIP44 should starts with xpub and if BIP49 ypub.
Now she sends encrypted over PGP to Charlie.

2. Setup

Charlie now has Bob’s and Alice’s public key and he’s going to create a multi-sig wallet where the company’s funds will be stored.

As Alice (and Bob) did , Charlie now creates a new wallet, selecting Multi-signature wallet instead of Standard Wallet.

In the following screen he chooses the number of signatures needed to unlock funds, so From 3 cosigners and Require 3 signatures

Now in the Add cosigner (1 of 3) screen, Charlie assign himself and use the Ledger Nano directly, so Use a hardware wallet

For the other cosigners, he can use the xpubs collected by Alice and Bob, select Enter cosigner key and paste them. Then, Charlie chooses to encrypt the multisig metadata wallet file.

Now we can safely send bitcoin to the multisig wallet. To get the address, go to the Receive tab and copy paste the Receiving Address. It should start with 3 on Bitcoin main-net.

3. Co-sign transactions

Alice 1/3

Alice wants to get out 100 mBTC to pay for company’s expenses. So she initiates a new transaction heading to Send tab, compiling the Pay to address, an optional description and the amount. Hitting send, she should see this screen with the partially signed transaction. She clicks on Export

She sends the exported unsigned.txn file to Bob using an encrypted email.

Bob 2/3

Bob receive and decrypt the pgp message containing the file. Now he goes to Electrum, clicking on Tool > Load transaction > from file

Now he clicks on Sign, then Export again the partially signed transaction and sends to Charlie. (Encrypted if possible)

Charlie 3/3

Charlie, as the last cosigner required, now will do the same as Bob with the difference that he needs to click Broadcast once signed.

Now, the transaction should be sent over the Bitcoin Network using the Electrum severs.

Note: There is no risk of funds being stolen if someone else gets the unsigned or signed files, since the keys remains on the hardware wallet all the time.

Originally published at https://medium.com on April 26, 2018.