Update project documentation for Phase 1 completion

- Update scratchpad with completed MVP status and Phase 2 roadmap
- Rewrite README with comprehensive setup instructions and feature overview
- Document next steps: firewall security and shell history persistence

scratchpad.md

@@ -3,24 +3,71 @@
 ## Project Overview
 Building a Docker container that runs Claude Code with full autonomous permissions and Twilio SMS notifications upon task completion.
 
-## Current Tasks
-- Setting up GitHub repository ✓
-- Creating project structure
-- Building Docker environment with Claude Code + Twilio MCP
-- Creating helper scripts for easy invocation
+## What Was Done ✅
+**Phase 1 - Complete MVP:**
+- GitHub repository created: https://github.com/VishalJ99/claude-docker
+- Docker setup with Claude Code + Twilio MCP integration
+- Wrapper script (`claude-docker.sh`) for easy invocation
+- Auto .claude directory setup with MCP configuration
+- Installation script for zshrc alias
+- SMS notifications via Twilio MCP server
+- Full autonomous permissions with --dangerously-skip-permissions
+- Context persistence via scratchpad.md files
+- Complete documentation and examples
+
+## Next Steps 🎯
+**Phase 2 - Security & Persistence Enhancements:**
+
+### 1. Network Security (High Priority)
+- Implement firewall to restrict network access
+- Whitelist only essential domains:
+  - api.anthropic.com (Claude API)
+  - api.twilio.com (SMS notifications)
+  - github.com, raw.githubusercontent.com (git operations)
+  - npm registry domains (package management)
+  - Common documentation sites (if needed)
+- Block all other outbound connections for security
+
+### 2. Shell History Persistence (Medium Priority)
+- Add persistent bash/zsh history between container sessions
+- Mount history file to host directory
+- Implement history management similar to Claude dev container
+- Ensure commands persist across sessions
+
+### 3. Additional Persistence Features (Medium Priority)
+- Persistent npm cache for faster startups
+- Git configuration persistence
+- Custom shell aliases and environment
+
+## Direction & Vision
+**Security-First Autonomous Environment:**
+- Maintain full Claude autonomy within projects
+- Add network security layer to prevent unauthorized access
+- Enhance user experience with persistent shell history
+- Keep container lightweight and fast
+- Ensure easy setup and maintenance
 
 ## Decisions Log
 - Using MCP (Model Context Protocol) for Twilio integration instead of direct API
 - Single container approach (no Docker Compose needed)
 - API keys via .env file
 - Context persistence via scratchpad.md files
+- Simplified settings.json to only include MCP config (no redundant allowedTools)
+- **NEW:** Adding firewall for network security
+- **NEW:** Adding shell history persistence like Claude dev container
 
 ## Notes & Context
-- Repository created at: https://github.com/VishalJ99/claude-docker
+- Repository: https://github.com/VishalJ99/claude-docker
 - Using --dangerously-skip-permissions flag for full autonomy
-- Twilio MCP server will run alongside Claude Code in container
+- Twilio MCP server runs alongside Claude Code in container
+- Container auto-removes on exit for clean state
+- Project directory mounted at /workspace
+- Need to research Claude dev container's init-firewall.sh implementation
+- Need to research their history persistence mechanism
 
 ## Quick References
-- Claude Code docs: https://docs.anthropic.com/en/docs/claude-code
-- MCP docs: https://modelcontextprotocol.io/
-- Twilio MCP: https://twilioalpha.com/mcp
+- Install: `./scripts/install.sh`
+- Usage: `claude` (from any project directory)
+- Config: `~/.claude-docker/.env`
+- Repo: https://github.com/VishalJ99/claude-docker
+- Claude dev container: https://github.com/anthropics/claude-code/tree/main/.devcontainer