[bitcoin-dev] [BIP Proposal] Partially Signed Bitcoin Transaction (PSBT) format

[Andrew Chow via bitcoin-dev]

Hi everyone,

I would like to propose a standard format for unsigned and partially signed
transactions.

===Abstract===

This document proposes a binary transaction format which contains the
information
necessary for a signer to produce signatures for the transaction and holds
the
signatures for an input while the input does not have a complete set of
signatures.
The signer can be offline as all necessary information will be provided in
the
transaction.

===Motivation===

Creating unsigned or partially signed transactions to be passed around to
multiple
signers is currently implementation dependent, making it hard for people
who use
different wallet software from being able to easily do so. One of the goals
of this
document is to create a standard and extensible format that can be used
between clients to allow
people to pass around the same transaction to sign and combine their
signatures. The
format is also designed to be easily extended for future use which is
harder to do
with existing transaction formats.

Signing transactions also requires users to have access to the UTXOs being
spent. This transaction
format will allow offline signers such as air-gapped wallets and hardware
wallets
to be able to sign transactions without needing direct access to the UTXO
set and without
risk of being defrauded.

The full text can be found here:
https://github.com/achow101/bips/blob/bip-psbt/bip-psbt.mediawiki

Andrew Chow

[Bryan Bishop via bitcoin-dev]

On Fri, Aug 18, 2017 at 5:11 PM, Andrew Chow via bitcoin-dev <

Post by Andrew Chow via bitcoin-dev
I would like to propose a standard format for unsigned and partially
signed transactions.

Just a quick note but perhaps you and other readers would find this thread
(on hardware wallet BIP drafting) to be tangentially related and useful:
https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2016-August/013008.html

- Bryan
http://heybryan.org/
1 512 203 0507

[Greg Sanders via bitcoin-dev]

Some related thoughts and suggestion for an extension that kanzure
suggested I post here:

Hardware Wallet attacks by input ownership omission and fix
----------------------------------------------------------------------------------
So a while back I realized that to have HW wallets do safe automated
coinjoins(without any user interaction be sure there are no fee dumps or
handing money to others) you have to protect yourself from the case of
signing one set of inputs while the other owned set is hidden from the
device, then repeating the same action with the two sets reversed.

Note that there is no support for such a mode in HW wallets today, but
could possibly greatly increase liquidity of JoinMarket like systems.

First signing pass:
1 BTC (yours, host tells ledger about it) --------

1.5 BTC

1 BTC (yours, host fails to tell ledger about it)-

Second signing pass:

1 BTC (yours, host fails to tell ledger) ---------

1.5 BTC

1 BTC (yours, host tells ledger about it)---------

In this scenario, you sign the first input, thinking "great I'm getting 0.5
BTC for running coinjoin" when in reality this will simply be re-played
again later with the inputs switched, *costing* you 0.5 BTC. (Ledger
doesn't support "negative fees", but imagine more more inputs are included
that aren't yours.)

More recently I noticed a more common issue along the same lines:

With Segwit inputs, the entire transaction referred to in the prevout is
generally no longer included for HW wallet signing API. This greatly speeds
up signing since potentially multiple MBs of transactions are no longer
passed into the device, but comes with a cost: An attacker can claim
certain inputs' value is much lower than it actually is. In the first pass,
the host reports the first input's value properly, and the second as lower.
The signature on the first input will go through fine(value included in the
sighash is only for that input), then attacker prompts a restart of
signing, reporting the 2nd value properly, and first value improperly low,
which allows the attacker to report the same fee twice on the device. Both
signatures over each input are correct, but the user was prompted with an
invalid fee amount(too low).

To fix this I consulted with andytoshi and got something we think works for
both cases:

1) When a signing device receives a partially signed transaction, all
inputs must come with a ownership proof:
- For the input at address A, a signature over H(A || x) using the key for
A. 'x' is some private fixed key that only the signing device knows(most
likely some privkey along some unique bip32 path).
- For each input ownership proof, the HW wallet validates each signature
over the hashed message, then attempts to "decode" the hash by applying its
own 'x'. If the hash doesn't match, it cannot be its own input.
- Sign for every input that is yours

This at a minimum makes sure that the wallet's total "balance" will not go
down more than the reported fee.

Benefits:
- Still small memory footprint compared to legacy signing
- Allows user-interactionless coinjoins without putting funds at risk
- These proofs can be created at any time, collected at the front of any
CoinJoin like protocol.
- These proofs can be passed around as additional fields for Partially
Signed Bitcoin Transactions:
https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2017-August/014838.html

On Sun, Aug 20, 2017 at 5:00 PM, Bryan Bishop via bitcoin-dev <

On Fri, Aug 18, 2017 at 5:11 PM, Andrew Chow via bitcoin-dev <

Post by Andrew Chow via bitcoin-dev
I would like to propose a standard format for unsigned and partially
signed transactions.

Just a quick note but perhaps you and other readers would find this thread
https://lists.linuxfoundation.org/pipermail/bitcoin-dev/
2016-August/013008.html
- Bryan
http://heybryan.org/
1 512 203 0507 <(512)%20203-0507>
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https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev

[Jochen Hoenicke via bitcoin-dev]

Post by Greg Sanders via bitcoin-dev
To fix this I consulted with andytoshi and got something we think works
1) When a signing device receives a partially signed transaction, all
- For the input at address A, a signature over H(A || x) using the key
for A. 'x' is some private fixed key that only the signing device
knows(most likely some privkey along some unique bip32 path).
- For each input ownership proof, the HW wallet validates each signature
over the hashed message, then attempts to "decode" the hash by applying
its own 'x'. If the hash doesn't match, it cannot be its own input.
- Sign for every input that is yours

Interesting, basically a proof of non-ownership :), a proof that the
hardware wallet doesn't own the address.

But shouldn't x be public, so that the device can verify the signature?
Can you expand on this, what is exactly signed with which key and how is
it checked?

One also has to make sure that it's not possible to reuse signatures as
ownership proof that were made for a different purpose.

Jochen

[Greg Sanders via bitcoin-dev]

If 'x' is public, that makes it identifiable and privacy-losing across
inputs.

To avoid "re-use" I suppose you'd want to sign some message like
`HMAC("ownership proof", H(A || x) )` instead. Otherwise any signature you
make using `A` ends up being used as a proof you don't know the input(this
seems like just details but to be more clear)...

To reiterate:

Sign `HMAC("ownership proof", H(A || x) )` using `A`. Public verifiers see
`HMAC("ownership proof", some_random_hash_connected_to_A )` and the HWW
that owns that input can recreate `some_random_hash_connected_to_A` by `H(A
|| x) )`

Post by Jochen Hoenicke via bitcoin-dev

Post by Greg Sanders via bitcoin-dev
To fix this I consulted with andytoshi and got something we think works
1) When a signing device receives a partially signed transaction, all
- For the input at address A, a signature over H(A || x) using the key
for A. 'x' is some private fixed key that only the signing device
knows(most likely some privkey along some unique bip32 path).
- For each input ownership proof, the HW wallet validates each signature
over the hashed message, then attempts to "decode" the hash by applying
its own 'x'. If the hash doesn't match, it cannot be its own input.
- Sign for every input that is yours

Interesting, basically a proof of non-ownership :), a proof that the
hardware wallet doesn't own the address.
But shouldn't x be public, so that the device can verify the signature?
Can you expand on this, what is exactly signed with which key and how is
it checked?
One also has to make sure that it's not possible to reuse signatures as
ownership proof that were made for a different purpose.
Jochen