PSBT

PSBT, or Partially Signed Bitcoin Transaction, is a standardized data format designed to facilitate the creation and signing of Bitcoin transactions by multiple parties. It allows an unsigned transaction to be prepared by one entity and progressively signed by others, such as hardware wallets, offline signers, or co-signers, without exposing private keys.

Defined in BIP 174, PSBT specifies a structured, extensible representation that carries all information needed for signing and finalization. A PSBT consists of a global map, per-input maps, and per-output maps. The global section typically includes the unsigned transaction itself. Each input and output map can carry fields such as previous output scripts, value, redeem scripts, witness scripts, partial signatures, derivation paths, sighash types, and other metadata. Unknown fields are allowed for future extensions, preserving interoperability.

Workflow: an unsigned transaction is created and distributed. Signers add partial signatures and any necessary data. Once the required signatures are provided, a finalization step can replace the PSBT with a fully signed transaction that can be broadcast to the network.

PSBT is designed to be interoperable across wallets and hardware signers, supporting multisig, offline signing, and complex custody setups. It helps separate key material from the signing workflow and enables offline or distributed signing.

Security and limitations: PSBT does not itself secure private keys and relies on the security of signers. Users should verify all inputs, outputs, and sighash types before signing. The format aims to be backward compatible and forward compatible through extensible fields.