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Revise locking script format and PushDrop advantages #1

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Revise locking script format and PushDrop advantages #1

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23 changes: 11 additions & 12 deletions THEORY.md
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Expand Up @@ -47,27 +47,27 @@ PushDrop (BRC-48) is a Bitcoin Script pattern that allows data to be embedded in

**Locking Script Format**:
```
<lockingPublicKey> OP_DROP <dataFields...> OP_DROP
<data...> OP_DROP <lockingPublicKey> OP_CHECKIG
```

**How It Works**:
1. The script starts with a public key that "locks" the output
2. `OP_DROP` removes data from the stack without affecting execution
2. A push data followed by an `OP_DROP` simply adds adds data from the stack and then removes it therefore leaving locking conditions unaffected.
3. Multiple data fields can be pushed (protocol identifier, token ID, amount, owner, metadata)
4. Another `OP_DROP` removes the data fields
5. The remaining script can verify signatures/ownership
4. A series of `OP_DROP`s or `OP_2DROP`s removes the data fields
5. The remaining script can comprise whatever locking conditions are required.

### Why PushDrop for Tokens?

**Traditional OP_RETURN Problems**:
- Creates unspendable outputs (burns satoshis)
- Cannot be transferred - token is "destroyed" when created
- Creates unspendable outputs (0 satoshis) we can refer to as "markers"
- Cannot be spent, since script execution will always result in FALSE
- No way to implement token transfers on-chain

**PushDrop Advantages**:
- Outputs remain spendable
- Data is preserved in locking script
- Can be transferred like any UTXO
- Data is immutable since it's within the tx.
- The token be transferred like any UTXO
- Supports complex token logic

### Token Script Anatomy
Expand All @@ -85,8 +85,7 @@ A typical PushDrop token contains:

To spend (transfer) a PushDrop token:
1. Provide a valid signature from the private key matching the locking key
2. Provide the public key for verification
3. The script must verify: signature matches public key, and public key matches locking key
2. The script must verify: signature is from the public key in the locking script.

---

Expand All @@ -104,9 +103,9 @@ To spend (transfer) a PushDrop token:

**Key Points**:
- Wallet handles satoshi input selection automatically
- Token output contains 1000 satoshis minimum (dust limit)
- Token output contains 1 satoshi minimum to be spendable
- Transaction is validated by miners and included in a block
- Overlay indexes the token for discovery
- Overlay indexes the token to enforce any needed rules

### 2. Discovery

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