BIP 174

What is BIP 174?

BIP 174 introduces the Partially Signed Bitcoin Transaction (PSBT) format, a standardized format for exchanging information about Bitcoin transactions that are not yet fully signed.

Key Features

1. Standardization: Provides a common format for representing partially signed transactions.

2. Interoperability: Enhances compatibility between different wallet software and hardware.

3. Multi-signature Support: Facilitates easier creation and management of multi-signature transactions.

4. Offline Signing: Enables easier offline transaction signing processes.

5. Extensibility: Designed to be extensible for future improvements.

Implications

1. Hardware Wallet Integration: Improves interaction between software wallets and hardware wallets.

2. Complex Transactions: Simplifies the process of creating and signing complex transaction types.

3. Cold Storage: Enhances the usability of cold storage solutions.

4. Collaborative Transactions: Facilitates easier coordination for transactions requiring multiple signatures.

5. Developer Tools: Provides a standard for building more sophisticated wallet and transaction management tools.

Similar Terms

• Multi-Signature Wallet: A wallet that requires multiple signatures to authorize a transaction.

• Cold Wallet: A wallet that stores cryptocurrency offline.

• Hardware Wallet: A physical device designed to store cryptocurrency private keys offline.