Hashed Time-Locked Collateral Contract

The five-minute read

One action, walked through

1. Open BIP 197 and read the status line before the examples.
2. Write down the rule in one sentence. A fair version of that sentence is: A script for generalized debt agreement contract based on Hashed Time-Lock Contract (BIP 199) transactions according to the Atomic Loans specification (https://arxiv.org/pdf/1901.05117.pdf).
3. Name the object that changes: HTLCC, P2SH.
4. Ask what an old client, an old contract, or an offline counterparty does. If the document is silent, the silence is part of the design.

The argument, unpacked

What has to be true

• You are implementing BIP 197 at the status the text itself states: Draft.
• The object that has to change is HTLCC, P2SH. A neighbouring document with a similar name is not this one.
• This page is not a guide to moving funds.

What happened after the paper

The source marks this draft. It is not a live consensus rule just because it has a number. Later documents can narrow, replace, or ignore this one. Cite the number you mean.

What to check before you use the idea

• What is the timeout in Hashed Time-Locked Collateral Contract, and who can take the coins when it expires?
• Which chain, if any, adjudicates the dispute?
• Which fields are committed: HTLCC, P2SH?

Terms

BIP 197

The public text titled Hashed Time-Locked Collateral Contract.

Draft

The document's own label for how finished the text is. It is not a market fact.

The problem the paper names

A payment or a bridge that cannot name the dispute path is a custodial promise with extra steps.

What the design proposes

• A script for generalized debt agreement contract based on Hashed Time-Lock Contract (BIP 199) transactions according to the Atomic Loans specification (https://arxiv.org/pdf/1901.05117.pdf).
• A Hashed Time-Locked Collateral Contract (HTLCC) consists of two scripts that permit a designated party (the "borrower") to lock funds on the Bitcoin chain for a specified amount of time as collateral in a debt agreement where the loan principal is denominated in a currency on another blockchain.
• We denote the blockchain on which the loan principal is issued the principal blockchain.

How the mechanism is specified

• Taken from the specification, the next constraint is: A Hashed Time-Locked Collateral Contract (HTLCC) consists of two scripts that permit a designated party (the "borrower") to lock funds on the Bitcoin chain for a specified amount of time as collateral in a debt agreement where the loan principal is denominated in a currency on another blockchain.
• Locate HTLCC, P2SH in BIP 197 and apply it to one transaction or call.
• Then check the failure the class of rule always has: a node that did not upgrade, a reverted call, a replayed signature, or a peer that does not speak the message.

What this page does not treat as proven

• A specification of a hash lock is not a working route, and not a guarantee the counterparty is online.
• This page is not a guide to moving funds.
• The source marks this draft. It is not a live consensus rule just because it has a number.

Why a venture studio still reads it

Use BIP 197 when a pitch says 'Hashed Time-Locked Collateral Contract' without saying whether the rule is consensus, policy, or an interface. The number is the citation. The pitch is not.