Bitcoin soft fork next year? What is the controversial BIP-119 proposal and the planned introduction of smart contract-like functions?

According to the report from Bitcoin.com, Cobra, the operator of the bitcoin.org domain, posted a message on December 1 to remind the community that unidentified Bitcoin developers outside of Bitcoin Core are planning to introduce the Bitcoin improvement proposal CTV (CheckTemplateVerify) through a user-activated soft fork (UASF) in 2025:

Some Bitcoiners are going to attempt to soft fork in CTV through a UASF sometime in 2025. Developers (outside of Core) are working right now on the code and activation parameters. Not enough people are paying attention to this.

— Cøbra (@CobraBitcoin) November 30, 2024

What is CTV?

According to the information, CTV (CheckTemplateVerify), also known as BIP-119, is a Bitcoin soft fork proposal introduced by Jeremy Rubin, the founder of the Bitcoin development organization Judica, in 2021. According to Rubin's description, the purpose of this proposal is:

To add a new "contract/covenant" to the Bitcoin network, similar to smart contracts on Ethereum (ETH).

Further, Rubin hopes that through the covenant, certain addresses can be whitelisted or blacklisted, so that funds from cold wallets or hardware wallets can only be withdrawn to another address controlled by the owner of the funds; or transactions can be automated, with the balance in the wallet being transferred out on a specific date or multiple dates, bringing more programmability to Bitcoin. At the same time, Bitcoin community member Shinobi also believes that one of the most effective and impactful benefits of CTV is to improve the scalability of people joining the Lightning Network.

BIP-119 Faces Criticism

However, while receiving support, the BIP-119 proposal has also been criticized by several Bitcoin experts. For example, Bitcoin technologist and Blockstream co-founder Adam Back advocated for a thorough review of BIP-119 in 2022. Additionally, blockchain writer Andreas Antonopoulos expressed concerns about the potential impact of BIP-119 that year, pointing out that the new functionality introduced by the proposal would allow developers to restrict the list of addresses to which BTC can be sent in the future, effectively creating a new class of Bitcoin that is no longer fungible. Furthermore, when users have the ability to blacklist certain addresses, governments and regulators are likely to intervene and start banning some addresses:

Then you'll end up with something that's essentially PayPal, but with worse scalability, and that's how you kill Bitcoin.

Currently, the Bitcoin community remains divided on BIP-119, with some seeing the improvement as valuable, while others claim it is a desperate attempt. Therefore, it remains uncertain whether this improvement will actually be implemented in Bitcoin next year.