A Partially Signed Bitcoin Transaction (PSBT) is a Bitcoin standard that facilitates the 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, such as in a multisig wallet or a CoinJoin transaction.
A #PSBT is a file that contains all the information necessary to create a Bitcoin transaction, but with the signatures for the inputs left blank. This allows the transaction to be created and edited by multiple parties without the risk of anyone stealing the private keys. Once all the parties have signed the inputs, the PSBT can be finalized into a complete Bitcoin transaction.
PSBTs are used in a variety of ways, including:
* Multisig wallets: A #multisig wallet requires multiple signatures to spend funds. A PSBT can be used to create a transaction that requires signatures from all the wallet's owners.
* CoinJoin: #CoinJoin is a privacy-preserving mixing technique that allows users to combine their coins with the coins of other users. A PSBT can be used to create a CoinJoin transaction, which makes it more difficult to track the movement of funds.
* Hardware wallets: Hardware wallets are physical devices that store private keys offline. A PSBT can be used to create a transaction on a hardware wallet, and then the signed PSBT can be transferred to a software wallet to be #broadcast to the network.
PSBTs are a powerful tool that can be used to simplify and secure the signing of #Bitcoin transactions. They are becoming increasingly popular as more wallets and services adopt them.
Here are some of the benefits of using PSBTs:
* They allow multiple parties to easily sign the same transaction.
* They make it easier to create and edit Bitcoin transactions.
* They improve the privacy of #CoinJoin transactions.
* They can be used with hardware wallets.
If you are using a Bitcoin wallet that supports PSBTs, I encourage you to use them. They can make your Bitcoin transactions easier, more secure, and more private.