Covenant
script · smart-contract · security
A UTXO spending condition that restricts properties of the transaction or outputs created when it is spent.
A covenant is a script condition that constrains a UTXO's spending transaction, such as required destinations, output values, token state, delays, or a continuing copy of the contract. Ordinary signature checks mainly authorize who may spend; a covenant can also constrain how.
Covenant capability varies by network. It can come from transaction introspection, signature-hash behavior, templates, token-aware rules, or dedicated opcodes. On Bitcoin Cash, introspection opcodes and later CashVM features support covenant construction; CashTokens can carry consensus-validated token state within those outputs.
Applications include vaults, escrows, recurring contract state, auctions, token protocols, and spending limits. Security depends on every permitted transition and recovery path: an overly strict covenant can strand funds, while an overlooked branch can bypass the intended restriction.
Related terms
Unspent Transaction Output (UTXO)
→A discrete spendable output on a UTXO blockchain, similar to a digital coin that must be spent whole.
technical · blockchain
Smart Contract
→Blockchain-enforced program or script logic that controls how assets or state may change.
blockchain · scripting
Opcode
→An encoded instruction interpreted by a virtual machine or transaction script engine.
technical · scripting
CashVM
→An ecosystem name for the stack-based virtual machine that evaluates Bitcoin Cash spending bytecode.
bitcoin-cash · protocol · smart-contract