BIP: output descriptors for PSBT

Original Postby SeedHammer Team

The BIP draft in discussion proposes an additional field for PSBTs, titled PSBT Encoded Output Descriptors.

This enhancement aims to facilitate the transfer of output descriptors between wallets by introducing a PSBT_GLOBAL_OUTPUT_DESCRIPTOR field. This field would contain arbitrary BIP 380 output script descriptors, making the unsigned transaction optional within the PSBT. The rationale behind this proposal is that while a descriptor string encapsulates the necessary information about output scripts and addresses, it is not ideal for wallet transfers due to its lack of a machine-recognizable header and inability to convey metadata such as name and birth block.

The proposed global type for the Output Descriptor includes fields for the earliest block height relevant to the descriptor, optionally followed by a UTF-8 encoded name, and the output descriptor formatted according to BIP380 without inline keys. The specification allows multiple PSBT_GLOBAL_XPUB entries when the PSBT_GLOBAL_OUTPUT_DESCRIPTOR is present and makes the presence of PSBT_GLOBAL_UNSIGNED_TX optional. Key expressions within the descriptor must reference PSBT_GLOBAL_XPUB entries using a specified format, and indexes outside the valid range or inline keys are considered invalid. Named references have been excluded due to their complexity and potential replacement with indexed references.

Test vectors provided illustrate both invalid and valid cases, including examples of descriptors with out-of-bounds key references, invalid UTF-8 names, inline keys, and a valid 2-of-3 multisig descriptor named "Satoshi's Stash" with a specific birth block and associated keys.

Compatibility considerations highlight that PSBTs lacking a PSBT_GLOBAL_UNSIGNED_TX might be rejected by software expecting it. These PSBTs are not intended for use in signing flows, hence posing no compatibility risk. Multiple PSBT_GLOBAL_XPUB entries could also cause rejections by software looking for a single extended key.

A Go implementation for the BIP is available on GitHub, primarily for development and testing purposes, with a clear caution against using it in production due to its limited scope of validating only the PSBT format, not the descriptor itself.

The BIP draft acknowledges previous work on the bip-wallet-policies draft BIP and incorporates serialization format specifications for compact descriptors, along with indexed key references, examples, and test vectors from that BIP.