Inside Bitcoin

1# PSBT Howto for Bitcoin Core
2
3Since Bitcoin Core 0.17, an RPC interface exists for Partially Signed Bitcoin
4Transactions (PSBTs, as specified in
5[BIP 174](https://github.com/bitcoin/bips/blob/master/bip-0174.mediawiki)).
6
7This document describes the overall workflow for producing signed transactions
8through the use of PSBT, and the specific RPC commands used in typical
9scenarios.
10
11## PSBT in general
12
13PSBT is an interchange format for Bitcoin transactions that are not fully signed
14yet, together with relevant metadata to help entities work towards signing it.
15It is intended to simplify workflows where multiple parties need to cooperate to
16produce a transaction. Examples include hardware wallets, multisig setups, and
17[CoinJoin](https://bitcointalk.org/?topic=279249) transactions.
18
19### Overall workflow
20
21Overall, the construction of a fully signed Bitcoin transaction goes through the
22following steps:
23
24- A **Creator** proposes a particular transaction to be created. They construct
25  a PSBT that contains certain inputs and outputs, but no additional metadata.
26- For each input, an **Updater** adds information about the UTXOs being spent by
27  the transaction to the PSBT. They also add information about the scripts and
28  public keys involved in each of the inputs (and possibly outputs) of the PSBT.
29- **Signers** inspect the transaction and its metadata to decide whether they
30  agree with the transaction. They can use amount information from the UTXOs
31  to assess the values and fees involved. If they agree, they produce a
32  partial signature for the inputs for which they have relevant key(s).
33- A **Finalizer** is run for each input to convert the partial signatures and
34  possibly script information into a final `scriptSig` and/or `scriptWitness`.
35- An **Extractor** produces a valid Bitcoin transaction (in network format)
36  from a PSBT for which all inputs are finalized.
37
38Generally, each of the above (excluding Creator and Extractor) will simply
39add more and more data to a particular PSBT, until all inputs are fully signed.
40In a naive workflow, they all have to operate sequentially, passing the PSBT
41from one to the next, until the Extractor can convert it to a real transaction.
42In order to permit parallel operation, **Combiners** can be employed which merge
43metadata from different PSBTs for the same unsigned transaction.
44
45The names above in bold are the names of the roles defined in BIP174. They're
46useful in understanding the underlying steps, but in practice, software and
47hardware implementations will typically implement multiple roles simultaneously.
48
49## PSBT in Bitcoin Core
50
51### RPCs
52
53- **`converttopsbt` (Creator)** is a utility RPC that converts an
54  unsigned raw transaction to PSBT format. It ignores existing signatures.
55- **`createpsbt` (Creator)** is a utility RPC that takes a list of inputs and
56  outputs and converts them to a PSBT with no additional information. It is
57  equivalent to calling `createrawtransaction` followed by `converttopsbt`.
58- **`walletcreatefundedpsbt` (Creator, Updater)** is a wallet RPC that creates a
59  PSBT with the specified inputs and outputs, adds additional inputs and change
60  to it to balance it out, and adds relevant metadata. In particular, for inputs
61  that the wallet knows about (counting towards its normal or watch-only
62  balance), UTXO information will be added. For outputs and inputs with UTXO
63  information present, key and script information will be added which the wallet
64  knows about. It is equivalent to running `createrawtransaction`, followed by
65  `fundrawtransaction`, and `converttopsbt`.
66- **`walletprocesspsbt` (Updater, Signer, Finalizer)** is a wallet RPC that takes as
67  input a PSBT, adds UTXO, key, and script data to inputs and outputs that miss
68  it, and optionally signs inputs. Where possible it also finalizes the partial
69  signatures.
70- **`descriptorprocesspsbt` (Updater, Signer, Finalizer)** is a node RPC that takes
71  as input a PSBT and a list of descriptors. It updates SegWit inputs with
72  information available from the UTXO set and the mempool and signs the inputs using
73  the provided descriptors. Where possible it also finalizes the partial signatures.
74- **`utxoupdatepsbt` (Updater)** is a node RPC that takes a PSBT and updates it
75  to include information available from the UTXO set (works only for SegWit
76  inputs).
77- **`finalizepsbt` (Finalizer, Extractor)** is a utility RPC that finalizes any
78  partial signatures, and if all inputs are finalized, converts the result to a
79  fully signed transaction which can be broadcast with `sendrawtransaction`.
80- **`combinepsbt` (Combiner)** is a utility RPC that implements a Combiner. It
81  can be used at any point in the workflow to merge information added to
82  different versions of the same PSBT. In particular it is useful to combine the
83  output of multiple Updaters or Signers.
84- **`joinpsbts`** (Creator) is a utility RPC that joins multiple PSBTs together,
85  concatenating the inputs and outputs. This can be used to construct CoinJoin
86  transactions.
87- **`decodepsbt`** is a diagnostic utility RPC which will show all information in
88  a PSBT in human-readable form, as well as compute its eventual fee if known.
89- **`analyzepsbt`** is a utility RPC that examines a PSBT and reports the
90  current status of its inputs, the next step in the workflow if known, and if
91  possible, computes the fee of the resulting transaction and estimates the
92  final weight and feerate.
93
94
95### Workflows
96
97#### Multisig with multiple Bitcoin Core instances
98
99For a quick start see [Basic M-of-N multisig example using descriptor wallets and PSBTs](./descriptors.md#basic-multisig-example).
100