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PSBT
PSBT – Partially Signed Bitcoin Transactions
The Partially Signed Bitcoin Transaction (PSBT) standard plays a pivotal role in enhancing the utility and security of Bitcoin wallets, enabling seamless Bitcoin transfers in a secure manner. This innovative standard was first introduced to the Bitcoin community with the release of Bitcoin Core version 0.17.0 in 2018.
Its primary purpose is to streamline the process of creating and signing complex Bitcoin transactions, especially those that demand multiple signatures for verification and completion. PSBT’s introduction has marked a significant step forward in bolstering the integrity and efficiency of Bitcoin transactions. Ensuring that each transaction executed on the Bitcoin network is both robust and secure.
What Is PSBT?
PSBT, or Partially Signed Bitcoin Transactions, is a universally accepted Bitcoin transaction standard. It possesses the essential data required to finalise a Bitcoin transaction, such as inputs, outputs and transaction charges. What sets PSBT apart is its inclusion of data about the transaction’s signing process. Making it more transparent and informative than a standard unsigned Bitcoin transaction.
As a standard outlined in BIP174, PSBT plays a critical role in facilitating communication and collaboration among different software or users about a Bitcoin transaction yet to be broadcast. It’s an instrumental tool for coinjoin, pay join, multisig and offline signing. Given its ability to verify external data.
Herein, PSBT’s versatility shines as it can accommodate essential transaction details like inputs, outputs, signatures, Xpubs (?) and derivation paths (?). The ability to progressively add signatures or information as the PSBT circulates between software or users is another standout feature.
Once all the necessary details have been incorporated and the PSBT is complete, it’s ready to be broadcast to the Bitcoin blockchain. Subsequently, the transaction awaits confirmation by the miners, marking the final stage of this carefully structured process. This sequence demonstrates the strategic importance of PSBT in ensuring a seamless, transparent and efficient Bitcoin transaction process.
Partially Signed Bitcoin Transactions And Multisig
PSBT’s serve as a critical tool in the world of Bitcoin, facilitating the cooperative creation and endorsement of Bitcoin transactions among various parties. They prove particularly beneficial in the context of multisignature transactions, a type of Bitcoin transaction that requires the approval of multiple signers.
One of the main advantages of PSBT is the autonomy it offers to each party involved in the transaction. With the help of PSBT, every participant can independently contribute their signature to the transaction. This process can be repeated until all necessary signatures are gathered, making PSBT an effective solution for obtaining multiple signatures irrespective of the physical distance between participants.
Moreover, PSBT finds its application in transferring unsigned transactions between a hardware wallet and a multisig wallet. After all required signatures have been collected, the PSBT can then be transformed into a fully signed Bitcoin transaction. This transaction can then be broadcast to the Bitcoin network. Where it is treated and processed just like any regular Bitcoin transaction.
So, whether it’s simplifying multisignature transactions or bridging the gap between hardware and multisig wallets, the versatile nature of PSBT is reshaping the way we navigate Bitcoin transactions.
Signing Devices That Support PSBT
For those who wish to utilise Partially Signed Bitcoin Transactions (PSBT), it’s critical to choose hardware wallets that are compatible with this standard. Fortunately, a majority of the devices featured on our website meet this requirement. We’ve created a comprehensive list of hardware wallets that are suited for PSBT, designed to aid your decision-making process.
But that’s not all, if you’re interested in exploring additional functionalities, we recommend checking our detailed comparison table. This resource is particularly useful for identifying devices that support multisignature signing, amongst other features. Enhance your Bitcoin transaction experience by choosing a wallet that aligns with your needs.
- Coldcard MK4
- Coldcard Q1
- Passport
- Keystone 3
- Keystone Pro 3
- Blockstream Jade
- Ledger Nano X
- Ledger Nano S
