What is a PSBT?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 5 min
In short
A PSBT is the shared file format for passing an unsigned Bitcoin transaction between different programs and devices. It is what lets a multisig or air-gapped setup mix hardware from different vendors. The file contains no private key, so carrying it around does not put funds at risk.
Key points
- The standard format for unsigned or partly signed transactions
- Contains no private key and cannot move funds by itself
- Lets multisig signers add signatures one after another
- Enables mixing devices from different vendors
Definition
A Partially Signed Bitcoin Transaction: the BIP174 data format that bundles an unsigned transaction together with the information signers need.
A PSBT carries more than the transaction: it includes the UTXOs being spent with their amounts, the relevant public keys and derivation paths. That is what lets an offline signer verify for itself that the transaction really moves the amount shown, without consulting the chain.
The classic use is a 2-of-3 multisig. The first signer creates and signs the PSBT and hands the file to the second, who adds a signature. With the threshold met, the finalised transaction is broadcast. Since the file holds no secrets, passing it by email or cloud storage leaks no keys.
It pairs naturally with air-gapped signing: carry the PSBT in on a QR code or SD card and carry the signed version back out. Sparrow Wallet, Electrum, Coldcard, Ledger and Trezor all support the format, so the software that broadcasts and the device that signs need not come from the same vendor.
Watch out for
- · A PSBT holds no keys, but it does reveal which coins you hold — treat it as private data
- · Signing without checking the destination and amount on the device's screen misses substitution
- · PSBT is a Bitcoin-family standard; Ethereum-style chains use different mechanisms