[bitcoin-dev] proposal: extend WIF format for segwit

[Thomas Voegtlin <thomasv@electrum.org>]

The Wallet Import Format (WIF) currently appends a 0x01 byte after the
raw private key, when that key needs to be used in conjunction with a
compressed public key. This allows wallets to associate a single Bitcoin
address to a WIF key.

It would be useful to extend the semantics of that byte, to signal for
segwit scripts, because these scripts result in different addresses.
That way, a WIF private key can still be associated to a single Bitcoin
address.

What WIF currently does is:

Nothing -> uncompressed pubkey
0x01    -> compressed pubkeys, non-segwit (can be used in P2PKH or P2SH)

We could extend it as follows:

0x02 -> segwit script embedded in P2SH (P2WPKH or P2WSH)
0x03 -> native segwit script (P2WKH or P2WSH)


Note 1: This is similar to my {x,y,z}{pub,prv} proposal for bip32
extended keys. (see other thread)

Note 2: It is probably not useful to use distinct bytes for P2WKH and
P2WSH, because the P2SH script is not known anyway. We did not do it for
non-segwit addresses, I guess we should keep it the way it is.

Note 3: we could also use a bech32 format for the private key, if it is
going to be used with a bech32 address. I am not sure if such a format
has been proposed already.

Note 4: my proposal will not result in a user visible change at the
beginning of the string, like we have for compressed/uncompressed. This
could be improved.