Crafting a RawTX Bitcoin Transaction: A Step-by-Step Guide

BY KEYHUNTER 27.03.2024
Crafting a RawTX Bitcoin Transaction: A Step-by-Step Guide

Creating a Bitcoin transaction can be broken down into a few steps:

  1. Select the inputs: The inputs are the transactions from which you are drawing the funds. You can think of them as the source of your new transaction.
  2. Calculate the input values: Add up the values of the selected inputs. This will be the total value that you can spend in the next transaction.
  3. Add output(s): Decide who the recipients are and how much they will receive. You can also specify a change address to send the remaining amount back to yourself.
  4. Sign the transaction: Sign the transaction with the private keys of the input addresses. This proves that the owner of the funds is authorizing the transfer.
  5. Broadcast the transaction: Once the transaction is signed, you can broadcast it to the network, and it will get picked up by miners and included in the blockchain.

There are many ways to create a transaction, and one of the most popular methods is using a piece of software called Bitcoin Core, which maintains a full node that interacts directly with the blockchain. You can also use command-line tools such as bitcoin-cli, which communicates with Bitcoin Core, to craft and sign raw transactions.

Step 1: Select the Inputs

Let’s fund our transaction with 0.001 BTC from a single input. We will use the listunspent command in bitcoin-cli to find potential inputs. This command returns unspent transaction outputs (UTXOs) that can be used as inputs.

$ bitcoin-cli listunspent 

[
  {
    "txid": "a9d4e1d98bb1b6e1b581ba3d9a49ba419e2e8481b3d12993f9e38d84b14b5d42d3111e1e1ac0",
    "vout": 1,
    "address": "3P69F3qH2H7TiSZU6Yq2ZxYq6qGHwMtEY62d",
    "scriptPubKey_asm": "OP_DUP OP_HASH160 9d172c1e196f8e58b719ce37b661a9e97143e2df93903c499 OP_EQUALVERIFY OP_CHECKSIG",
    "amount": 0.001,
    "confirmations": 999
  }
]

The output above is an array of all your potential inputs, each with a different txid (transaction ID) and vout (output number). You can select an input by choosing a specific txid and vout.

Step 2: Calculate Input Values

In our example, we will use the UTXO with a value of 0.001 BTC, so the input value is simply:

Input Value = 0.001 BTC

Step 3: Add Output(s)

Let’s send 0.0005 BTC to an address and keep the rest as change. We’ll use the recipient address 3G8fF2RqbV1gX8zQ3tBMtXXLWXhP9xV3YhK.

The change address, to which we’ll send the remaining funds, can be any valid Bitcoin address you own. It could be the same address you selected as an input, or a new one. For demonstration purposes, we’ll use the address 3Q9qV6EfQHYC3Mgw125qLDkbqVTi8bk6sR6:

Output #1: 3G8fF2RqbV1gX8zQ3tBMtXXLWXhP9xV3YhK - 0.0005 BTC
Output #2 (change): 3Q9qV6EfQHYC3Mgw125qLDkbqVTi8bk6sR6 - 0.0004999 BTC

Now that we have specified the outputs, we can calculate the transaction fee. The fee is the difference between the input value and the output value:

0.001 BTC (input) - 0.0005 BTC (output) - 0.0004999 BTC (change) = 0.0000001 BTC

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Crafting a RawTX Bitcoin Transaction: A Comprehensive Guide

In the intricate web of blockchain and cryptocurrency, Bitcoin stands as the pioneering digital currency that has reshaped the financial landscape. Among its core functionalities is the ability to create and broadcast transactions directly to the network. This process, involving the creation of a Raw Transaction (RawTX), is fundamental for developers and advanced users who seek to interact with the Bitcoin network at a granular level. This guide provides a comprehensive overview of crafting a RawTX Bitcoin transaction, demystifying the steps and tools required to execute this task proficiently.

Understanding Bitcoin Transactions

At its heart, a Bitcoin transaction is a transfer of value between Bitcoin wallets. Each transaction is digitally signed for security and then sent to the blockchain, where it is confirmed by the network. A RawTX allows users to manually construct a transaction, offering greater control over its parameters, such as inputs, outputs, and fees.

Key Components of a Bitcoin Transaction:

  • Inputs: References to previous transactions that prove you have BTC to send.
  • Outputs: The recipient(s) of the BTC. A transaction can have multiple outputs, allowing you to send BTC to multiple addresses in one go.
  • Transaction Fee: Paid to miners for validating your transaction. The fee is not explicitly set but inferred by deducting the output total from the input total.

Step 1: Setting Up Your Environment

Before crafting a RawTX, ensure you have the necessary tools. Bitcoin Core, the official Bitcoin client, provides command-line utilities (bitcoin-cli) and a full node for interaction with the blockchain. Install Bitcoin Core from the official Bitcoin website and synchronize it with the blockchain.

Step 2: Gathering Inputs

To create a transaction, you first need to identify the inputs. Use the listunspent command to find unspent transaction outputs (UTXOs) in your wallet. Choose UTXOs as inputs for your new transaction.

bitcoin-cli listunspent

Step 3: Creating the Raw Transaction

With the inputs and recipient details at hand, use the createrawtransaction command. This command requires two JSON objects: one detailing the inputs and another specifying the recipient(s) and amount(s) to send.

bitcoin-cli createrawtransaction '[{"txid":"your_txid_here","vout":n}]' '{"recipient_address":amount}'

Replace your_txid_here and n with your input transaction ID and output index. Adjust recipient_address and amount with the recipient’s Bitcoin address and the amount of BTC to send.

Step 4: Signing the Transaction

Once you’ve created the raw transaction, it needs to be signed with the private keys of the input addresses. This step secures the transaction and proves your ownership of the inputs.

bitcoin-cli signrawtransactionwithwallet your_raw_tx_here

Replace your_raw_tx_here with the hex string returned by the createrawtransaction command.

Step 5: Broadcasting the Transaction

The final step is to broadcast the signed transaction to the Bitcoin network, making it available for miners to confirm.

bitcoin-cli sendrawtransaction your_signed_tx_here

Replace your_signed_tx_here with the hex string returned by the signrawtransactionwithwallet command.

Conclusion

Creating a RawTX Bitcoin transaction offers unparalleled control over transaction details, making it a valuable skill for developers and enthusiasts. By meticulously following the outlined steps and understanding the underlying principles, you can successfully navigate the complexities of Bitcoin transactions. Remember, with great power comes great responsibility. Always double-check transaction details before broadcasting, as mistakes in RawTX transactions are irreversible.

Engaging with the Bitcoin network at this level not only enhances your technical prowess but also deepens your appreciation for the ingenuity and elegance of blockchain technology. Happy transacting!

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Creating a RawTX Bitcoin Transaction

Creating a Bitcoin transaction is actually quite simple, though it requires a bit of arithmetic and some careful attention to detail. In this article, we’ll go over each step in creating a transaction, from calculating fees to crafting the RawTX hex. We’ll also use some simple tools to help with the calculations.

Steps for Creating a RawTX

  1. Determine the inputs and outputs: To send an amount of bitcoin, you need to assemble a collection of utxos (unspent transaction outputs). Their sum should be greater than or equal to the amount you wish to send. You also need to determine the receiving address and the change address to which you’ll send the difference between the amount sent and any fees.
  2. Calculate the fee: To be included in the next block, your transaction needs to have a fee that miners consider worthwhile. The fee is calculated by taking the difference between the sum of the inputs and the value of the outputs. A higher fee will increase the likelihood of your transaction being included sooner, so it’s helpful to keep an eye on the current fee market.
  3. Craft the transaction: Using the values you’ve calculated, you can begin crafting the transaction. This involves creating the input sections, which require knowing the previous transaction hash and output value of each utxo, and the output sections, which include the recipient’s and change addresses and their respective amounts.
  4. Sign the transaction: Each input of your transaction needs to be signed with the private key corresponding to the utxo. This process involves hashing the data twice, first with a SIGHASH_ALL flag and then with a SIGHASH_SINGLE flag to prevent certain forms of attack. The signature is created with the private key and appended to the input.
  5. Broadcast the transaction: Once your transaction is signed, you can broadcast it to the network by sending the RawTX hex to a node you’re connected to.

Tools for the Job

There are many online tools that can help with some of the steps described above. For this article, we’ll make use of blockchain.info’s Raw Transactions tool and a JavaScript library called bitcoinjs-lib.

blockchain.info’s tool provides a simple interface for crafting transactions, though it does require some of the work to be done manually. Alternatively, bitcoinjs-lib provides a full suite of methods for creating, signing, and broadcasting transactions programmatically. Using a mix of both can make the process a little simpler.

Example Parameters

For this example, let’s say we want to send 0.4 BTC to an address and we have two UTXOs of 0.5 BTC and 0.7 BTC available for spending. We’ll also need an address to send the change, which in this case is an address we control and is holding 0.005 BTC. Remember that the sum of the inputs should be greater than the sum of the outputs in order to have enough to cover the fee.

Our inputs are:

  • 0.5 BTC from a transaction whose ID is inputTxID1
  • 0.7 BTC from inputTxID2

And our outputs are:

  • 0.4 BTC being sent to the recipient’s address, bc1qxx...
  • 0.1 BTC being sent back to our change address, bc1rrr...

Step 1: Determine Inputs and Outputs

First, head over to blockchain.info’s Raw Transactions tool and select the inputs you wish to spend. Enter their corresponding transaction IDs and output values:

Inputs:
- 0.5 BTC from inputTxID1
- 0.7 BTC from inputTxID2

Outputs:
- 0.4 BTC to bc1qxx...
- 0.3 BTC to an address of your choice (this will be the change address)

You can also specify the fee you’re willing to pay, though for this example, we’ll keep the default fee of 0.00001 BTC/byte.

Step 2: Calculate the Fee

The fee for this transaction will be the difference between the sum of our inputs and the sum of our outputs:

Sum of Inputs: 0.5 BTC + 0.7 BTC = 1.2 BTC
Sum of Outputs: 0.4 BTC + 0.3 BTC = 0.7 BTC

Fee = 1.2 BTC – 0.7 BTC = 0.5 BTC

Since 0.5 BTC is greater than the default fee of 0.00001 BTC/byte, our transaction should be included fairly quickly.

Step 3: Craft the Transaction

With our inputs and outputs prepared, we can use blockchain.info

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Crafting a RawTX Bitcoin Transaction: A Step-by-Step Guide

In the world of Bitcoin, transactions form the backbone of the network, allowing users to send and receive digital currency. A deeper understanding of how these transactions are constructed can provide valuable insights into Bitcoin’s operational mechanics and offer enhanced control over one’s transactions. This guide will walk you through the process of creating a raw Bitcoin transaction, also known as a RawTX, from scratch.

Understanding the Basics

Before diving into the creation of a RawTX, it’s important to grasp some fundamental concepts:

  • UTXO (Unspent Transaction Outputs): Bitcoin does not maintain account balances; instead, it uses unspent outputs from previous transactions as inputs for new ones.
  • Inputs and Outputs: Every transaction has input(s) (references to previous outputs) and output(s) (specifying new recipient(s) and amount(s) to be transferred).
  • Transaction Fees: Miners prioritize transactions based on the fees attached. Higher fees can lead to faster confirmations.

Tools and Preparations

To create a RawTX, you’ll need access to a Bitcoin node or a service that allows you to query the blockchain for UTXO details and broadcast the signed transaction. Popular options include Bitcoin Core, Electrum, or blockchain explorers with APIs.

Ensure you have the following:

  • A source address (with available UTXO)
  • A destination address
  • Access to the private key of the source address (for signing the transaction)
  • A clear understanding of the transaction fee you are willing to pay.

Step 1: Gathering UTXO Information

Start by identifying the UTXOs associated with your source address that you wish to spend. Each UTXO is identified by the transaction hash (txid) and the output index (vout) in that transaction.

Step 2: Creating the Transaction

A basic transaction is structured as follows:

  1. Version: Typically set to 1.
  2. Input Count: The number of inputs you’re spending.
  3. Inputs:
  • TXID: The transaction hash of the UTXO.
  • Vout: The output index in the transaction specified by the TXID.
  • ScriptSig: Initially left empty for a RawTX, to be filled with the signature and public key upon signing.
  • Sequence: Usually set to 0xFFFFFFFF.
  1. Output Count: The number of outputs you’re creating.
  2. Outputs:
  • Value: The amount of satoshis to send to the recipient.
  • ScriptPubKey: Specifies the conditions under which the output can be spent, typically including the recipient’s address.
  1. Locktime: Specifies when the transaction can be added to the blockchain. Usually set to 0 for immediate transactions.

Step 3: Signing the Transaction

To authorize the transaction, you must sign it with the private key of the source address. The signature ensures that only the owner of the address can spend its funds. This process involves creating a digital signature for the transaction’s hash, then inserting this signature into the ScriptSig field of each input.

Step 4: Broadcasting the Transaction

Once signed, the transaction is ready to be broadcast to the Bitcoin network. This can be done through a Bitcoin node or various online services. Upon broadcasting, miners will pick up the transaction, and, if the fee is adequate, include it in the next block.

Tips for Success

  • Transaction Fees: Always check the current fee rates to avoid delays. Tools like Bitcoin Fee Estimators can provide guidance.
  • Security: Handle private keys with extreme caution. Exposure can lead to loss of funds.
  • Testing: Consider practicing on the Bitcoin Testnet to avoid mistakes with real funds.

Conclusion

Creating a RawTX Bitcoin transaction offers a hands-on approach to understanding the intricacies of Bitcoin transactions. While it might seem daunting at first, mastering this skill can afford you greater flexibility and insight into the workings of the Bitcoin network. Remember, practice makes perfect, and the Testnet is an excellent resource for honing your skills without risking actual Bitcoin. With patience and practice, you’ll find that constructing a Bitcoin transaction from scratch is both an enlightening and rewarding experience.

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