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Tobin Harding 2021-06-01 18:14:42 +10:00
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07_1_Creating_a_Partially_Signed_Bitcoin_Transaction.md
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@ -10,7 +10,7 @@ Partially Signed Bitcoin Transactions (PSBTs) are the newest way to vary the cre
Multisignatures were great for the very specific case of jointly holding funds and setting rules for whom among the joint signers could authenticate the use of those funds. There are many use cases, such as: a spousal joint bank account (a 1-of-2 signature); a fiduciary requirement for dual control (a 2-of-2 signature); and an escrow (a 2-of-3 signature). Multisignatures were great for the very specific case of jointly holding funds and setting rules for whom among the joint signers could authenticate the use of those funds. There are many use cases, such as: a spousal joint bank account (a 1-of-2 signature); a fiduciary requirement for dual control (a 2-of-2 signature); and an escrow (a 2-of-3 signature).
> :book: ***What is a PSBT?*** As the name suggests, a PSBT is a transaction that has not been fully signed. That's important, because once a transaction is signed, its content is locked in. [BIP174](https://github.com/bitcoin/bips/blob/master/bip-0174.mediawiki) defined an abstracted methodology for putting PSBTs together that describes and standardizes roles in their collaborative creation. A *Creator* proposes a transaction; one or more *Updaters* supplement it; and one or more *Signers* authenticate it; before a *Finalizer* completes it; and an *Extracter* turn it into a transaction for the Bitcoin network. There may also be a *Combiner* who merges parallel PSBTs from different users. > :book: ***What is a PSBT?*** As the name suggests, a PSBT is a transaction that has not been fully signed. That's important, because once a transaction is signed, its content is locked in. [BIP174](https://github.com/bitcoin/bips/blob/master/bip-0174.mediawiki) defined an abstracted methodology for putting PSBTs together that describes and standardizes roles in their collaborative creation. A *Creator* proposes a transaction; one or more *Updaters* supplement it; and one or more *Signers* authenticate it; before a *Finalizer* completes it; and an *Extracter* turns it into a transaction for the Bitcoin network. There may also be a *Combiner* who merges parallel PSBTs from different users.
PSBTs may initially look sort of the same as multi-sigs because they have a single overlapping bit of functionality: the ability to jointly sign a transaction. However, they were created for a totally different use case. PSBTs recognize the need for multiple programs to jointly create a transaction for a number of different reasons, and they provide a regularized format for doing so. They're especially useful for use cases involving hardware wallets (for which, see [§7.3](https://github.com/BlockchainCommons/Learning-Bitcoin-from-the-Command-Line/blob/master/07_3_Integrating_with_Hardware_Wallets.md)), which are protected from full access to the internet and tend to have minimal transaction history. PSBTs may initially look sort of the same as multi-sigs because they have a single overlapping bit of functionality: the ability to jointly sign a transaction. However, they were created for a totally different use case. PSBTs recognize the need for multiple programs to jointly create a transaction for a number of different reasons, and they provide a regularized format for doing so. They're especially useful for use cases involving hardware wallets (for which, see [§7.3](https://github.com/BlockchainCommons/Learning-Bitcoin-from-the-Command-Line/blob/master/07_3_Integrating_with_Hardware_Wallets.md)), which are protected from full access to the internet and tend to have minimal transaction history.