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Transaction

Bitcore provides a very simple API for creating transactions. We expect this API to be accessible for developers without knowing the working internals of bitcoin in deep. What follows is a small introduction to transactions with some basic knowledge required to use this API.

A Transaction contains a set of inputs and a set of outputs. Each input contains a reference to another transaction's output, and a signature that allows the value referenced in that ouput to be used in this transaction.

Note also that an output can be used only once. That's why there's a concept of "change address" in the bitcoin ecosystem: if an output of 10 BTC is available for me to spend, but I only need to transmit 1 BTC, I'll create a transaction with two outputs, one with 1 BTC that I want to spend, and the other with 9 BTC to a change address, so I can spend this 9 BTC with another private key that I own.

So, in order to transmit a valid transaction, you must know what other transactions on the network store outputs that have not been spent and that are available for you to spend (meaning that you have the set of keys that can validate you own those funds). The unspent outputs are usually refered to as "utxo"s.

Let's take a look at some very simple transactions:

var transaction = new Transaction()
    .from(utxos)          // Feed information about what unspend outputs one can use
    .to(address, amount)  // Add an output with the given amount of satoshis
    .change(address)      // Sets up a change address where the rest of the funds will go
    .sign(privkeySet)     // Signs all the inputs it can

var transaction2 = new Transaction()
    .from(utxos)          // Feed information about what unspend outputs one can use
    .spendAllTo(address)  // Spends all outputs into one address
    .sign(privkeySet)     // Signs all the inputs it can

Now, one could just serialize this transaction in hexadecimal ASCII values (transaction.serialize()) and send it over to the bitcoind reference client.

bitcoin-cli sendrawtransaction <serialized transaction>

Transaction API

You can take a look at the javadocs for the [Transaction class here](link missing). This document will go over the expected high level use cases.

from(utxo)
change(address)
fee(amount)
usingStrategy(strategy)
to(address, amount)
to(pubKeySet, amount)
addData(opReturnValue)
sign(privKey)
sign(privKeySet)
applySignature(signature)
missingSignatures()
isValidSignature(signature)
getSignatures(privKey)
getSignatures(privKeySet)
isFullySigned()
toBuffer()
toJSON()

Multisig Transactions

To send a transaction to a multisig address, the API is the same as in the above example. To spend outputs that require multiple signatures, the process needs extra information: the public keys of the signers that can unlock that output.

  var multiSigTx = new Transaction()
      .fromMultisig(utxo, publicKeys, threshold)
      .spendAllTo(address, amount)
      .sign(myKeys);

  var serialized = multiSigTx.serialize();

This can be serialized and sent to another party, to complete with the needed signatures:

  var multiSigTx = new Transaction(serialized)
      .sign(anotherSetOfKeys);

  assert(multiSigTx.isFullySigned());

Advanced topics

Unspent Output Selection

If you have a larger set of unspent outputs, only some of them will be selected to fulfill the amount. This is done by storing a cache of unspent outputs in a protected member called _utxos. When the to() method is called, some of these outputs will be selected to pay the requested amount to the appropiate address.

There are some nits that you should have in mind when using this API:

When a signature is added, the corresponding utxo is removed from the cache.
When the transaction is serialized, this cache is not included in the serialized form.

Spending Strategies

We have implemented partially Merge Avoidance for the change addresses of a transaction with a simple API:

  var mergeAvoidance = new Transaction.Strategy.MergeAvoidance({
    change: ['1bitcoinChange...', '3bitcoinChange...']
  });
  var transaction = new Transaction()
      .usingStrategy(mergeAvoidance)
      .to(['1target...', '3anaddress...'], amount)

Note that this will not create multiple transactions, which would increase privacy. The MergeAvoidance API will take care that the target and change addresses provided will receive as equally distributed outputs as possible, using a simple algorithm.

In the future, if a Stealth Address is provided to the to method and the strategy being used is MergeAvoidance, it will derive as many addresses as needed according to the utxos received. In a similar fashion, we are discussing how to provide an API for using an extended public key to derive change addresses, but as the user of the library should be in control of the policy for deriving keys (so no transaction outputs gets unnoticed), it's proving to be a hard problem to solve and it may end up being the user's responsability.

Upcoming changes

We're debating an API for full Merge Avoidance, CoinJoin, Smart contracts, CoinSwap, and Stealth Addresses. We're expecting to have all of them by some time in 2015.

A first draft of a Payment Channel smart contract modular extension to this library is being implemented independently (https://github.com/eordano/bitcore-channel).

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