PSBT Howto for Bitcoin Core

Since Bitcoin Core 0.17, an RPC interface exists for Partially Signed Bitcoin Transactions (PSBTs, as specified in BIP 174).

This document describes the overall workflow for producing signed transactions through the use of PSBT, and the specific RPC commands used in typical scenarios.

PSBT in general

PSBT is an interchange format for Bitcoin transactions that are not fully signed yet, together with relevant metadata to help entities work towards signing it. It is intended to simplify workflows where multiple parties need to cooperate to produce a transaction. Examples include hardware wallets, multisig setups, and CoinJoin transactions.

Overall workflow

Overall, the construction of a fully signed Bitcoin transaction goes through the following steps:

Generally, each of the above (excluding Creator and Extractor) will simply add more and more data to a particular PSBT, until all inputs are fully signed. In a naive workflow, they all have to operate sequentially, passing the PSBT from one to the next, until the Extractor can convert it to a real transaction. In order to permit parallel operation, Combiners can be employed which merge metadata from different PSBTs for the same unsigned transaction.

The names above in bold are the names of the roles defined in BIP174. They're useful in understanding the underlying steps, but in practice, software and hardware implementations will typically implement multiple roles simultaneously.

PSBT in Bitcoin Core



Multisig with multiple Bitcoin Core instances

Alice, Bob, and Carol want to create a 2-of-3 multisig address. They're all using Bitcoin Core. We assume their wallets only contain the multisig funds. In case they also have a personal wallet, this can be accomplished through the multiwallet feature - possibly resulting in a need to add -rpcwallet=name to the command line in case bitcoin-cli is used.


Later, when V BTC has been received on Amulti, and Bob and Carol want to move the coins in their entirety to address Asend, with no change. Alice does not need to be involved.

In case there are more signers, it may be advantageous to let them all sign in parallel, rather than passing the PSBT from one signer to the next one. In the above example this would translate to Carol handing a copy of P to each signer separately. They can then all invoke walletprocesspsbt "P", and end up with their individually-signed PSBT structures. They then all send those back to Carol (or anyone) who can combine them using combinepsbt. The last two steps (finalizepsbt and sendrawtransaction) remain unchanged.