Hand-Encoding a Bitcoin Transaction

Bitcoin is a decentralized, open-source cryptocurrency that allows users to create and send transactions without the need for intermediaries such as banks. One of the main components of a Bitcoin transaction is the Sig script, which is used to verify the identity of the sender and ensure the integrity of the transaction.

In this article, we will walk through the process of manually encoding a Bitcoin transaction using the standard format defined by the Bitcoin protocol.

Transaction Format

A Bitcoin transaction consists of the following parts:

• prevhash: Hash of the previous block

• “index”: Index of the previous transaction (0-indexed)

• scriptSig: Script signature used to verify the identity of the sender and ensure the integrity of the transaction

• vsize: Size of the transaction data

• vpri: Sender’s public key

• data: Transaction data

Script Signatures

A script signature consists of a sequence of numbers prefixed with “OP_”. Each number represents an operation performed on the sender’s balance. The most common operations are:

• OP_1: Set the sender’s balance to zero

• OP_2: Increase the sender’s balance by the amount specified in the following transaction data

Here is an example of a script signature:

4a76a51c7f9b6a6a000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000001e80fe2004a5ef6d6

This script signature means that the sender’s balance should be set to 0. In this example, the transaction data “OP_2” specifies the value 100.

Hand-coding a Bitcoin transaction

To manually encode a Bitcoin transaction, we need to build a new block and add the necessary components to it.

Here is an example of manually encoding a Bitcoin transaction:

Forbidden:
Previous Tx: f5d8ee39a430901c91a5917b9f2dc19d6d1a0e9cea205b009ca73dd04470b9a6
Index: 0
ScriptSig:
4a76a51c7f9b6a6a000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000100
vsize: 20 bytes (transaction data only)
vpri: 3047023278d0782e2bfc35d41ed29cdab4ea5ef6dc
data:
OP_1: 0
OP_3: f5d8ee39a430901c91a5917b9f2dc19d6d1a0e9cea205b009ca73dd04470b9a6

This block consists of:

• prevhash: The hash of the previous block, set to 0 (since we are starting from scratch)

• index: The index of the previous transaction, which is 0

• scriptSig: A script signature that sets the sender’s balance to zero and increments their balance by 100 using OP_2

• “vsize”: The size of the transaction data, set to 20 bytes (transaction data only)

• vpri: The sender’s public key, which is set to a hardcoded value in this example

• data: a script signature that increases the sender’s balance by 100 using OP_2

Signing and verifying the transaction

To sign the transaction, we need to create a new Bitcoin wallet and upload it with our public key. We can then use the wallet’s signing API to create a digital signature for the transaction.

Here is an example of signing a transaction:

import bitcoins









Load wallet
wallet = bitcoin.new_wallet()

Create a new block
block = bitcoin.NewBlock()

Set previous hash and index
previous_hash = '0'
index = 0

Add script signature and data to block
block.set_script Sig(4a76a51c7f9b6a6a000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000100)
block.add_data OP_1, OP_3, index, 'f5d8ee39a430901c91a5917b9f2dc19d6d1a0e9cea205b009ca73dd04470b9a6', 100)

Sign the block
signature = wallet.sign_block(block)

Print the signed block
print(bitcoin.PrintBlock(block, signature))

This code creates a new Bitcoin wallet and loads it with our public key. It then establishes a new block and adds the necessary script signatures and information to it. Finally, it signs the block using the wallet’s signature API and prints the signed block.