Bitcoin Transactions Deconstructed

Presented by: Jeff Flowers

TransactionsHow is value moved on the network

Overview

• Transactions

• General Structure

• Standard Types

• Methods of Inquiry

• Detailed Examples

Transactions

• Movement of value on the network

• These actions are wrapped within a transaction prior to broadcast

• Transactions are in plain text and readable by all

• Broadcasted to all Bitcoin nodes

StructureThese are data structures, as such conform to well defined rules

• Inputs are the source of funds being moved, pointers to the transaction hash and sequence number of the UTXO containing moved value

• The output of a transaction is the creation of an unspent transaction output (UTXO)

• UTXO are denominated in Satoshis

• A locking script that encumbers this value requiring specific conditions to be met for the owner to spend

Transaction Structure Cond.

• A transaction completely depletes the UTXO being used

• Should only a portion be required, change must be considered

• Change is the unused portion of the UTXO being moved

• The difference between the new UTXO and change is taken by the network as a fee

Standard Transactions

• Pay-to-Public-Key-Hash (P2PKH)

• Pay-to-Public-Key

• Multi-Signature

• Data Output

• Pay-to-Script-Hash (P2SH)

Standard Transactions

• Pay-to-Public-Key-Hash (P2PKH)

• Pay-to-Public-Key

• Multi-Signature

• Data Output

• Pay-to-Script-Hash (P2SH)

The majority of Bitcoin transactions today are of this general type. These

types of transactions are used to transfer value, typically from one user

to another. They are constructed having the form: scriptSig (or the

unlocking script) first, followed by the scriptPubKey (or locking script).

Standard Transactions

• Pay-to-Public-Key-Hash (P2PKH)

• Pay-to-Public-Key

• Multi-Signature

• Data Output

• Pay-to-Script-Hash (P2SH)

Another payment transaction. These types of transactions are effectively

outdated with P2PKH being preferred. The public key itself, not its hash, is stored in the locking script. This has

the advantages of being shorter, though less secure.

Standard Transactions

• Pay-to-Public-Key-Hash (P2PKH)

• Pay-to-Public-Key

• Multi-Signature

• Data Output

• Pay-to-Script-Hash (P2SH)

A M of N schema, where there are N total number of keys and M are

needed to create the signature for a valid transaction. Presently limited to a maximum of 15 listed public keys.

Standard Transactions

• Pay-to-Public-Key-Hash (P2PKH)

• Pay-to-Public-Key

• Multi-Signature

• Data Output

• Pay-to-Script-Hash (P2SH)

The allure of the Block Chain, as a single source of shared truth

embodied by a immutable database opens up many possibilities. Notary

services and beyond. As such, developers have wanted to take full

advantage of this instrument. OP_RETURN allows for 40 bytes of

data to be stored in the block chain.

Standard Transactions

• Pay-to-Public-Key-Hash (P2PKH)

• Pay-to-Public-Key

• Multi-Signature

• Data Output

• Pay-to-Script-Hash (P2SH)

Payment to P2SH goes instead to a potentially complex locking script but rather to the hash of the script. This greatly shortens the overall size of the transaction. A future spend of

this UTXO requires the script whose hash matches.

My Method of Inquiry After building my transaction, I had a serial hex mess -

But what did all of this stuff mean?

Resources• Builder (Bitcore): http://bit.ly/1ORgoeF

• Explorer: https://chain.so/

• Hex Converter: http://www.rapidtables.com/convert/number/hex-to-ascii.htm

• Decoder: https://blockchain.info/decode-tx

• Broadcaster: https://live.blockcypher.com/bcy/pushtx/

• Blog: http://www.siliconian.com/blog