Partially Signed Bitcoin Transaction (PSBT)
Abbreviation: PSBT
Pronunciation: PAR-shuh-lee SYND BIT-koyn tran-ZAK-shun (PEE-ESS-BEE-TEE)
Also known as: Bitcoin PSBT, PSBT
Definition
A Partially Signed Bitcoin Transaction, or PSBT, is a standardized container for an unsigned or partly signed Bitcoin transaction plus the information signers need.
Overview
What it means
A Partially Signed Bitcoin Transaction, or PSBT, is a standardized container for an unsigned or partly signed Bitcoin transaction plus the information signers need. It lets several tools collaborate without handing private keys to the transaction creator.
How it works
One device constructs the intended inputs and outputs, attaches relevant previous-output data and key derivation details, and exports a PSBT. Offline or hardware signers inspect it and append signatures. A coordinator combines signatures, finalizes the transaction when conditions are met, then broadcasts the raw Bitcoin transaction.
Understanding the technical details
For multisig treasury workflows, confirm that every signer sees the same outputs and change destination. The coordinator can add metadata, but security depends on signers verifying amounts, destination scripts and fees independently. A PSBT can be passed between offline devices and a connected coordinator without disclosing signing keys. After collecting the required signatures, validate the finalized transaction against the original approved proposal before broadcast.
Additional protocol context
PSBT supports offline and hardware signers because required transaction information can travel with the package. It does not prove that the proposed transaction is safe. A signer must still verify inputs, destinations, amounts, fees, change, scripts, derivation paths, and signature-hash rules.
Workflows should preserve unknown fields where required, reject malformed or conflicting data, and validate the final transaction before broadcast. Sensitive metadata can reveal wallet structure and transaction relationships, so PSBT files need controlled handling. Version and feature compatibility should be tested across every coordinator and signer used.
Common failures and limitations
A PSBT is a data format, not a security guarantee. A malicious coordinator can propose a different destination or inflated fee. Signers must verify transaction details on trusted displays and understand change outputs and derivation paths.
Related concepts
Crypto Wallet, Private Key, Seed Phrase.
Further reading
Example
A company uses a two-of-three Bitcoin treasury wallet. An accountant prepares a supplier payment PSBT. Two authorized signers review recipient address, amount and fee on separate devices, then the coordinator broadcasts the completed transaction.
Comparison
A PSBT is not the same as a signed Bitcoin transaction ready for broadcast. Multisignature specifies authorization conditions; PSBT is a common workflow container used to collect the necessary signatures.
Key Takeaway
A PSBT is a data format, not a security guarantee.
Sources
- EIP-712: Typed Structured Data Hashing and Signing — Ethereum Improvement Proposals (2026-08-02)
- BIP 174: Partially Signed Bitcoin Transaction Format — Bitcoin Improvement Proposals (2026-08-02)
- Clear Signing Overview — Ledger Developer Portal (2026-08-02)