Bitcoin Improvement Proposal for Offline Transactions Published

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Bitcoin Improvement Proposal for Offline Transactions Published

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Bitcoin Improvement Proposal (BIP) 174 has been added to the GitHub Bitcoin repository by Bitcoin developer Andrew Chow, creating the technology for partially signed Bitcoin transactions (PSBT), which can be used to send Bitcoin transactions without an internet connection.

The co-founder of Blocksteam, Peter Wuille, first proposed the idea behind BIP 174. This BIP has not been voted on yet nor implemented, but could be incredibly useful for Bitcoin users who don’t have easy internet access.

Essentially, PSBT produces the information necessary to sign a transaction without the input having a complete set of signatures. This allows the sender to be offline when sending the transaction since all necessary info will be included in the transaction. Once the sender is connected to the internet, the transaction will show up on the blockchain. Basically, PSBT allows transactions to be sent without the unspent transaction output (UTXO) database, which is currently a requirement.

Additionally, PSBT will allow partially-signed and unsigned Bitcoin transactions to be easily passed between wallets to obtain multiple signatures. As it is now, if signers have different types of wallets this is sometimes not possible because there is no standard format for combining signatures.

Usually, BIPs have to go through an intensive review and debate before being added to Bitcoin’s software. One famous BIP, Segregated Witness (SegWit), caused a debate so intense that a small part of the Bitcoin community split off. The addition of PSBT to Bitcoin’s code will probably be much less controversial than SegWit since it will help increase Bitcoin’s robustness and versatility without fundamentally changing Bitcoin’s protocol.

 

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