Bitcoin 2 of 3 Multisig

This is an example walkthrough of using bitcoind RPC commands to generate a 2 of 3 multisignature address. We will:

Generate three private keys
Find the ECDSA public key for each address
Generate a 2 of 3 multisig address
Send coins to the multisig address
Generate a transaction to spend funds out of the multisig address
Sign the transaction with two of the keys
Broadcast that transaction on the network

Prerequisites

bitcoind (in particular, bitcoin-cli - you don't need a full copy of the blockchain)
node.js
c++

Installation

npm install
cd public-key-generator
make
cd ..

Steps

First we will generate some private keys. It is very important that this process is as random as possible. I'd suggest a hardware true random number generator such as the FST-01.

node private-key-generator

You will get something like this:

Private Key in Hex: f3d03f863d9dd6ed35b9c15739f34d8c8fdd07797cc5cc6f2e610721d06bb816
Private Key in WIF: 5KffUB9YUsvoGjrcn76PjVnC61PcWLzws4QPfrT9RFNd85utCkZ

Note: WIF stands for Wallet Import Format - a bitcoin specific way of representing an address which includes a checksum capability.

You will want to generate a total of three private keys. Here is a second one:

Private Key in Hex: e919e62a30f8ca06b66d7c9c22c176c77646c3db2c06d3ed1db0a9b2cc9f4b58
Private Key in WIF: 5KawqZHB1H6Af12ZhgTBXwQUY1jACgvGMywET7NF5bdYYzCxomY

And a last one:

Private Key in Hex: f99974355fbe8865e522643421914acb8f3efc0e3a1a746aa2fe68993e700d4e
Private Key in WIF: 5KiDGG8sfmTNnzKDmm1MteWHV2TQQaUBbaEY3huVLwVz1i6i5be

Next you will want to generate a ECDSA public key that corrosponds to each of the private keys. Let's use the hex value of each private key to find an associated ECDSA public key:

cd public-key-generator
./ecdsapubkey f3d03f863d9dd6ed35b9c15739f34d8c8fdd07797cc5cc6f2e610721d06bb816
04A97B658C114D77DC5F71736AB78FBE408CE632ED1478D7EAA106EEF67C55D58A91C6449DE4858FAF11721E85FE09EC850C6578432EB4BE9A69C76232AC593C3B
./ecdsapubkey e919e62a30f8ca06b66d7c9c22c176c77646c3db2c06d3ed1db0a9b2cc9f4b58
04019EF04A316792F0ECBE5AB1718C833C3964DEE3626CFABE19D97745DBCAA5198919081B456E8EEEA5898AFA0E36D5C17AB693A80D728721128ED8C5F38CDBA0
./ecdsapubkey f99974355fbe8865e522643421914acb8f3efc0e3a1a746aa2fe68993e700d4e
04A04F29F308160E6F945B33D943304B1B471ED8F9EACEEB5412C04E60A0FAB0376871D9D1108948B67CAFBC703E565A18F8351FB8558FD7C7482D7027EECD687C

Now we will create our multisig address given the three hex public keys. The parameter "2" tells bitcoind to create an address that requires the signature of at least two private keys. The fact that we are presenting three ECDSA keys as well is what makes it a two of three address. You can use any number of keys as long as it is equal to or greater than the "minimum required to sign" parameter. Two of two and three of five are other common strategies.

bitcoin-cli createmultisig 2 '["04A97B658C114D77DC5F71736AB78FBE408CE632ED1478D7EAA106EEF67C55D58A91C6449DE4858FAF11721E85FE09EC850C6578432EB4BE9A69C76232AC593C3B","04019EF04A316792F0ECBE5AB1718C833C3964DEE3626CFABE19D97745DBCAA5198919081B456E8EEEA5898AFA0E36D5C17AB693A80D728721128ED8C5F38CDBA0","04A04F29F308160E6F945B33D943304B1B471ED8F9EACEEB5412C04E60A0FAB0376871D9D1108948B67CAFBC703E565A18F8351FB8558FD7C7482D7027EECD687C"]'
{
    "address" : "38aNB81yPqNp6X2T3rXYZN8Z3C4pSbqEvs",
    "redeemScript" : "524104a97b658c114d77dc5f71736ab78fbe408ce632ed1478d7eaa106eef67c55d58a91c6449de4858faf11721e85fe09ec850c6578432eb4be9a69c76232ac593c3b4104019ef04a316792f0ecbe5ab1718c833c3964dee3626cfabe19d97745dbcaa5198919081b456e8eeea5898afa0e36d5c17ab693a80d728721128ed8c5f38cdba04104a04f29f308160e6f945b33d943304b1b471ed8f9eaceeb5412c04e60a0fab0376871d9d1108948b67cafbc703e565a18f8351fb8558fd7c7482d7027eecd687c53ae"
}

So in this case, our address is 38aNB81yPqNp6X2T3rXYZN8Z3C4pSbqEvs. Let's send it some coins:

bitcoin-cli sendtoaddress 38aNB81yPqNp6X2T3rXYZN8Z3C4pSbqEvs 0.001
7e69687c94c57a878cf711a39870383c6fe93b420f26184a21d020d8ace2df83

The resulting transaction (transaction number 7e69687c94c57a878cf711a39870383c6fe93b420f26184a21d020d8ace2df83) is a spend to our new address. That transaction will show some coin going in and other coin being returned as change. We will need the vout and the scriptPubKey of the output that we can now spend. Let's take a look:

bitcoin-cli getrawtransaction 7e69687c94c57a878cf711a39870383c6fe93b420f26184a21d020d8ace2df83 1
...
        {
            "value" : 0.00100000,
            "n" : 1,
            "scriptPubKey" : {
                "asm" : "OP_HASH160 4b86dfac7f503de1127366815d1d452413282466 OP_EQUAL",
                "hex" : "a9144b86dfac7f503de1127366815d1d45241328246687",
                "reqSigs" : 1,
                "type" : "scripthash",
                "addresses" : [
                    "38aNB81yPqNp6X2T3rXYZN8Z3C4pSbqEvs"
                ]
            }
        }
...

Let's spend that money out of the address. To do that, we'll create a spend transaction that spends away 0.0009 BTC leaving the remainder (0.0001 BTC) to cover fees for the miners.

bitcoin-cli createrawtransaction '[{"txid":"7e69687c94c57a878cf711a39870383c6fe93b420f26184a21d020d8ace2df83","vout":1}]' '{"19ijkHfTosmo6rHtVKte145XPnQQNqVn46":0.0009}'
010000000183dfe2acd820d0214a18260f423be96f3c387098a311f78c877ac5947c68697e0100000000ffffffff01905f0100000000001976a9145fa5be58f939d6ae79636c2143fa9e7924102c1588ac00000000

Note: the JSON here is very picky. For example, it doesn't tollerate things like spaces after commas and other standard patterns. Also be careful to escape things properly in the shell. If you get stuck, try copying the example EXACTLY and just replace the transaction id and multi-sig address.

Now we have an unsigned raw transaction. It means nothing right now and can safely be sent through untrusted mediums such as unencrypted email.

Let's go sign it with one of the private keys. In this case we will use the private key in Wallet Import Format. (WIF)

Note: When doing this using the bitcoin-abc Bitcoin Cash (BCH / BCC) or bgold-cli Bitcoin Gold (BTG) you will need to also add an amount property to each input specifying the amount of each input. (the original input value without subtracting miner's fees) The JSON will look something like ..."vout":1,amount:0.001,"scriptPubKey"....

bitcoin-cli signrawtransaction '010000000183dfe2acd820d0214a18260f423be96f3c387098a311f78c877ac5947c68697e0100000000ffffffff01905f0100000000001976a9145fa5be58f939d6ae79636c2143fa9e7924102c1588ac00000000' '[{"txid":"7e69687c94c57a878cf711a39870383c6fe93b420f26184a21d020d8ace2df83","vout":1,"scriptPubKey":"a9144b86dfac7f503de1127366815d1d45241328246687","redeemScript":"524104a97b658c114d77dc5f71736ab78fbe408ce632ed1478d7eaa106eef67c55d58a91c6449de4858faf11721e85fe09ec850c6578432eb4be9a69c76232ac593c3b4104019ef04a316792f0ecbe5ab1718c833c3964dee3626cfabe19d97745dbcaa5198919081b456e8eeea5898afa0e36d5c17ab693a80d728721128ed8c5f38cdba04104a04f29f308160e6f945b33d943304b1b471ed8f9eaceeb5412c04e60a0fab0376871d9d1108948b67cafbc703e565a18f8351fb8558fd7c7482d7027eecd687c53ae"}]' '["5KffUB9YUsvoGjrcn76PjVnC61PcWLzws4QPfrT9RFNd85utCkZ"]'
{
    "hex" : "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",
    "complete" : false
}

The resulting transaction in hex format is a bit longer but still marked as incomplete because we only have one signature on it. Likewise, it can be sent through insecure mediums such as email because it isn't completely signed. Even if it were, an abuser wouldn't be able to alter the transaction sending the coin to another address because that would invalidate the original signature.

However, I should point out that the transaction isn't encrypted. Let's take a look at it to demonstrate that.

bitcoin-cli decoderawtransaction '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'
{
    "txid" : "3312407d07de68d09eba1c9bee333aa947f46075c6f491eaeda2025c513aa45f",
    "version" : 1,
    "locktime" : 0,
    "vin" : [
        {
            "txid" : "7e69687c94c57a878cf711a39870383c6fe93b420f26184a21d020d8ace2df83",
            "vout" : 1,
            "scriptSig" : {
                "asm" : "0 3045022100acb79a21e7e6cea47a598254e02639f87b5fa9a08c0ec8455503da0a479c19560220724014c241ac64ffc108d4457302644d5d057fbc4f2edbf33a86f24cf0b1044701 524104a97b658c114d77dc5f71736ab78fbe408ce632ed1478d7eaa106eef67c55d58a91c6449de4858faf11721e85fe09ec850c6578432eb4be9a69c76232ac593c3b4104019ef04a316792f0ecbe5ab1718c833c3964dee3626cfabe19d97745dbcaa5198919081b456e8eeea5898afa0e36d5c17ab693a80d728721128ed8c5f38cdba04104a04f29f308160e6f945b33d943304b1b471ed8f9eaceeb5412c04e60a0fab0376871d9d1108948b67cafbc703e565a18f8351fb8558fd7c7482d7027eecd687c53ae",
                "hex" : "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"
            },
            "sequence" : 4294967295
        }
    ],
    "vout" : [
        {
            "value" : 0.00090000,
            "n" : 0,
            "scriptPubKey" : {
                "asm" : "OP_DUP OP_HASH160 5fa5be58f939d6ae79636c2143fa9e7924102c15 OP_EQUALVERIFY OP_CHECKSIG",
                "hex" : "76a9145fa5be58f939d6ae79636c2143fa9e7924102c1588ac",
                "reqSigs" : 1,
                "type" : "pubkeyhash",
                "addresses" : [
                    "19ijkHfTosmo6rHtVKte145XPnQQNqVn46"
                ]
            }
        }
    ]
}

Sure enough, in the vout section you can see that this is a spend of 0.00090000 BTC to 19ijkHfTosmo6rHtVKte145XPnQQNqVn46.

Moving on, let's add another signature to this transaction:

bitcoin-cli signrawtransaction '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' '[{"txid":"7e69687c94c57a878cf711a39870383c6fe93b420f26184a21d020d8ace2df83","vout":1,"scriptPubKey":"a9144b86dfac7f503de1127366815d1d45241328246687","redeemScript":"524104a97b658c114d77dc5f71736ab78fbe408ce632ed1478d7eaa106eef67c55d58a91c6449de4858faf11721e85fe09ec850c6578432eb4be9a69c76232ac593c3b4104019ef04a316792f0ecbe5ab1718c833c3964dee3626cfabe19d97745dbcaa5198919081b456e8eeea5898afa0e36d5c17ab693a80d728721128ed8c5f38cdba04104a04f29f308160e6f945b33d943304b1b471ed8f9eaceeb5412c04e60a0fab0376871d9d1108948b67cafbc703e565a18f8351fb8558fd7c7482d7027eecd687c53ae"}]' '["5KiDGG8sfmTNnzKDmm1MteWHV2TQQaUBbaEY3huVLwVz1i6i5be"]'
{
    "hex" : "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",
    "complete" : true
}

Now our transaction is marked complete. Again, an attacker can't alter the transaction without invalidating it so it is still in a resonably safe condition. Additionally, if our private keys were to be kept in distant and secure locations, at no point were our private keys in the same place at the same time. You can see how this strategy might be better than simply splitting a private key into multiple peices and combining them later to spend.

All that is left is to transmit our signed transaction on the network:

bitcoin-cli sendrawtransaction 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
78126ea4aaf1acd232711b1efa3dc15832bd45d89bd5718c1cd15ec57d802497

Now we should be able to see our spend transaction populate across the network. Search for 78126ea4aaf1acd232711b1efa3dc15832bd45d89bd5718c1cd15ec57d802497 in a block explorer to verify.

We have now successfully created a multi-sig bitcoin address, sent funds to it and retrieved the funds out the other side. (minus a small transaction fee)

License

MIT

localbankcoin / bitcoin-2-of-3-multisig Goto Github PK