Partially Signed Bitcoin Transactions (PSBT)

A Partially Signed Bitcoin Transaction (PSBT) is a Bitcoin standard that facilitates portability of unsigned transactions, which allows multiple parties to easily sign the same transaction. This is most useful when multiple parties wish to add inputs to the same transaction. PSBT was introduced by BIP 174, and allows users to more easily sign transactions on a cold storage device and then broadcast the signed transaction from a device connected to the internet.

For example, if Alice, Bob, and Charlie collectively own bitcoin locked in a 2-of-3 multisig address, the bitcoin needs signatures from two of the three individuals in order to be spent. The PSBT standard facilitates the cooperative construction, transfer, and signing of such a transaction.

The PSBT standard also advances interoperability between different wallet software. Using PSBTs, a transaction can be crafted with a watch-only wallet, which does not have access to the private keys needed to sign the transaction. The watch-only wallet can then export a PSBT file, which can be imported to a wallet which does contain the required private keys. Once the transaction is signed, the signing wallet can export an updated PSBT file, which can be sent to a Bitcoin node to be broadcast.