Bitcoin Transactions – Scriptsig and Scriptpubkey – locking and unlocking a transaction?

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Recently, inspired by Ken Shirriff's and Bryce Neal's low level looks at the Bitcoin protocol, I set about constructing Bitcoin's much talked about multisignature transactions from scratch to understand their capabilities and limitations. The code to do it all in Go is available as go-bitcoin-multsig on GitHub and I'd like to go through how all of this works at the Bitcoin protocol level. We'll also step through creating and spending a multisig transaction to make it all clearer.

In many ways, this is a follow up to Ken's amazing explanation of the Bitcoin protocol and constructing a Pay-to-PubKeyHash P2PKH transaction, so I won't cover things covered there in any great detail.

Please check out his post out bitcoin scriptsig to address if you're completely new to the Bitcoin protocol. I'll be using go-bitcoin-multisig to generate keys and transactions along the way, explaining each step. If you'd like to follow along and create a multisig transaction yourself, you'll need to follow the simple build instructions for go-bitcoin-multisig.

To spend Bitcoin funds sent to this type of address, the recipient must use the private key associated with the public key hash specified in that address to create a digital signature, which is put into the scriptSig of a spending transaction, unlocking the funds.

This is because P2SH addresses have a version byte prefix of 0x05instead of the 0x00 prefix in P2PKH addresses, and these come out as a '3' and '1' after base58check encoding. So what information is encoded in a P2SH address? A specific unspent Bitcoin can actually have a whole range of different spending conditions attached to it, the most common being a typical P2PKH which just bitcoin scriptsig to address the recipient to provide a signature matching the public key hash.

The Bitcoin core developers realized that people were looking at the capabilities of Bitcoin's Script language and seeing a whole array of possibilities about what spending conditions you could attach to a Bitcoin output, to create much more elaborate transactions than just P2PKH transactions.

The core developers decided that instead bitcoin scriptsig to address letting senders put in long scripts into their scriptPubKey where spending conditions usually gothey would let each sender put in a hash of their spending conditions instead. These spending conditions are known as the redeem scriptand a P2SH funding transaction simply contains a hash of this redeem script in the scriptPubKey of the funding transaction.

The redeem script itself is only revealed, checked against the redeem script hash, and evaluated during the spending transaction. This puts the responsibility of providing the full redeem script on to the recipient of the P2SH funds. This has a number of advantages:. All of this will hopefully make more sense as we go ahead and craft a multisignature P2SH transaction.

If you'd like to learn more, the Bitcoin developer guide has a full explanation of P2SH transactions. We will create a 2-of-3 multisignature address, where 2 digital signatures of 3 possible public keys are required to spend funds sent to this address. First we need the hex representations of 3 public keys.

Now, we specify that we want a 2-of-3 address and provide our 3 bitcoin scriptsig to address keys to generate our P2SH address:. Let's breakdown that redeem script since that is where all the magic happens. A valid multisignature redeem script, according to the Bitcoin protocollooks like:. It contains a hashed redeem script with our chosen public keys and multisig script, but this will not be revealed publicly until the spending transaction, since it has been hashed.

We would at this point pass this address to the sender who is funding our multisig address. To fund our multisig address now, we need a funding source of Bitcoins. Note that the generated transaction changes slightly each time because of the nonce in the digital signatures and this may change the total size of the transaction slightly each time.

Everything else should remain the same. We now have bitcoin scriptsig to address scriptPubKey of the form:. This is used to compare the redeem script provided in the spending transaction to the hash in the funding transaction. We'll see how the scriptPubKey here and the scriptSig of the spending transaction come together shortly. At this point, you can broadcast your own funding transaction and have it actually confirmed on the network. The transaction above was broadcast and confirmed as txid 02be35dce7efa0bfb7f4b79c4cdcd3d.

Now we want to be able to spend our P2SH multisig funds. First let's generate another key pair to be our destination where we can send our multisig funds. Now, we will need 2 of the 3 private keys of the public keys used to generate our P2SH address. We'll use our 1st bitcoin scriptsig to address 3rd original generated private keys any 2 of 3 would work, of course.

Now, this is important: We can obviously skip keys when our M required keys is less than our N possible keys, but they must show up in our signed spending transaction in the same order that they were provided in the redeem script. To create our spending transaction, we need the input txid of the funding transaction, our amount with the remaining balance going to transaction fees and the destination. We must also provide the original redeem script. Remember, the destination P2SH address is a hash and bitcoin scriptsig to address reveal our redeem script.

Only the recipient who created the P2SH address knows bitcoin scriptsig to address full redeem script, and in this case, bitcoin scriptsig to address are that recipient and bitcoin scriptsig to address provide it:. Again, the transaction will look slightly different each time because of the changing nonce in the bitcoin scriptsig to address signature, but everything else should look the same. Let's look at how the Bitcoin protocol will run through the script here.

Combining the spending transaction scriptSig and funding transaction scriptPubKey, we get:. As stated earlier, the order of signatures matters here and must match the order that the public keys were provided in. A couple of important notes, especially for troubleshooting, on how this raw transaction is created:. We can now broadcast this transaction to spend our multisig P2SH funds.

You can see the above transaction confirmed as txid eeab3ef6cbea5fb1bb8babeb7cde10ae5a7d8a3fa57dca I hope all of that was helpful for anyone trying to understand the innards of the Bitcoin protocol or trying to build multisig applications on top of the raw Bitcoin protocol.

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All bitcoin transactions have scripts embedded into its inputs and outputs. The scripts use a very simple programming language, which is evaluated from left to right using a stack. The language is designed such that it guarantees all scripts will execute in a limited amount of time it is not Turing-Complete. When a transaction is validated, the input scripts are concatenated with the output scripts and evaluated. To be valid, all transaction scripts must evaluate to true.

A good analogy for how this works is that the output scripts are puzzles that specify in which conditions can those bitcoins be spent. The input scripts provide the correct data to make those output scripts evaluate to true. For more detailed information about the bitcoin scripting language, check the online reference on bitcoin's wiki. The Script object provides an interface to construct, parse, and identify bitcoin scripts.

It also gives simple interfaces to create most common script types. This class is useful if you want to create custom input or output scripts. In other case, you should probably use Transaction. This is the most commonly used transaction output script. It's used to pay to a bitcoin address a bitcoin address is a public key hash encoded in base58check. Pay to public key scripts are a simplified form of the p2pkh, but aren't commonly used in new transactions anymore, because p2pkh scripts are more secure the public key is not revealed until the output is spent.

Multisig outputs allow to share control of bitcoins between several keys. When creating the script, one specifies the public keys that control the funds, and how many of those keys are required to sign off spending transactions to be valid.

An output with N public keys of which M are required is called an m-of-n output For example, 2-of-3, 3-of-5, 4-of-4, etc.

Note that regular multisig outputs are rarely used nowadays. Pay to script hash outputs are scripts that contain the hash of another script, called redeemScript.

To spend bitcoins sent in a p2sh output, the spending transaction must provide a script matching the script hash and data which makes the script evaluate to true. This allows to defer revealing the spending conditions to the moment of spending. It also makes it possible for the receiver to set the conditions to spend those bitcoins. Most multisig transactions today use p2sh outputs where the redeemScript is a multisig output. Data outputs are used to push data into the blockchain.

Up to 40 bytes can be pushed in a standard way, but more data can be used, if a miner decides to accept the transaction. To create a custom Script instance, you must rely on the lower-level methods add and prepend.

Both methods accept the same parameter types, and insert an opcode or data at the beginning prepend or end add of the Script. Script has an easy interface to parse raw scripts from the network or bitcoind, and to extract useful information. An illustrative example for more options check the API reference.

To validate a transaction, the bitcoin network validates all of its inputs and outputs. To validate an input, the input's script is concatenated with the referenced output script, and the result is executed.

If at the end of execution the stack contains a 'true' value, then the transaction is valid. You can do this in bitcore by using the Interpreter class.

The entry point and probably the only interface you'll need for most applications is the method Interpreter verify. Note that verify expects two scripts: This is because different conditions are checked for each.

Bitcoin transactions contain scripts. Each input has a script called the scriptSig, and each output has a script called the scriptPubkey. If at the end of execution the stack contains a "true" value, then the transaction is valid. Verifies a Script by executing it and returns true if it is valid.

This function needs to be provided with the scriptSig and the scriptPubkey separately. Based on bitcoind's EvalScript function, with the inner loop moved to Interpreter. Checks a locktime parameter with the transaction's locktime. There are two times of nLockTime: See the corresponding code on bitcoin core: Based on the inner loop of bitcoind's EvalScript function bitcoind commit: A bitcoin transaction script.

Each transaction's inputs and outputs has a script that is evaluated to validate it's spending. Retrieve the associated data for this script. In the case of a pay to public key hash or P2SH, return the hash. Script - this script instance. Script - a new pay to script hash script that pays to this script.

Address boolean - the associated address for this script if possible, or false. Analogous to bitcoind's FindAndDelete. Find and delete equivalent chunks, typically used with push data chunks. Note that this will find and delete not just the same data, but the same data with the same push data op as produced by default.

Script - a new Multisig output script for given public keys, requiring m of those public keys to spend. A new P2SH Multisig input script for the given public keys, requiring m of those public keys to spend. Script - a new pay to public key hash output for the given address or public key.

Script - a new pay to public key output for the given public key. Script - new pay to script hash script for given script. Script - an empty script. Script - an output script built from the address.