P2SH (Pay To Script Hash)

As seen in the previous section, using multi-sig is easily done in code. However, before P2SH there was no way to ask someone to pay to a multi-sig scriptPubKey in a way that was as simple as just providing them with a regular BitcoinAddress.

Pay To Script Hash (or P2SH as it is often known), is an easy way to represent a scriptPubKey as a simple BitcoinScriptAddress, no matter how complicated it is in terms of it's underlying m-of-n signature set up.

In the previous part we generated this multi-sig:

Key bob = new Key();
Key alice = new Key();
Key satoshi = new Key();

var scriptPubKey = PayToMultiSigTemplate
    .Instance
    .GenerateScriptPubKey(2, new[] { bob.PubKey, alice.PubKey, satoshi.PubKey });

Console.WriteLine(scriptPubKey);

2 0282213c7172e9dff8a852b436a957c1f55aa1a947f2571585870bfb12c0c15d61 036e9f73ca6929dec6926d8e319506cc4370914cd13d300e83fd9c3dfca3970efb 0324b9185ec3db2f209b620657ce0e9a792472d89911e0ac3fc1e5b5fc2ca7683d 3 OP_CHECKMULTISIG

Complicated isn’t it?

Instead, let’s see how such a scriptPubKey would look in a P2SH payment.

Key bob = new Key();
Key alice = new Key();
Key satoshi = new Key();

var paymentScript = PayToMultiSigTemplate
    .Instance
    .GenerateScriptPubKey(2, new[] { bob.PubKey, alice.PubKey, satoshi.PubKey }).PaymentScript;

Console.WriteLine(paymentScript);

OP_HASH160 57b4162e00341af0ffc5d5fab468d738b3234190 OP_EQUAL

Do you see the difference? This P2SH scriptPubKey represents the hash of the multi-sig script: redeemScript.Hash.ScriptPubKey

Since it is a hash, you can easily convert it to a base58 string BitcoinScriptAddress.

Key bob = new Key();
Key alice = new Key();
Key satoshi = new Key();

Script redeemScript =
    PayToMultiSigTemplate
    .Instance
    .GenerateScriptPubKey(2, new[] { bob.PubKey, alice.PubKey, satoshi.PubKey });
//Console.WriteLine(redeemScript.Hash.ScriptPubKey);
Console.WriteLine(redeemScript.Hash.GetAddress(Network.Main)); // 3E6RvwLNfkH6PyX3bqoVGKzrx2AqSJFhjo

Such an address will still be understood by any existing client wallet, even if the wallet does not understand what “multi-sig” is.

In P2SH payments, we refer to the hash of the Redeem Script as the scriptPubKey.

Since anyone sending a payment to such an address only sees the Hash of the RedeemScript, and do not know the Redeem Script itself, they don’t even have to know that they are sending money to a multi sig of Alice/Bob/Satoshi.

Signing such a transaction is similar to what we have done before. The only difference is that you also have to provide the Redeem Script when you build the Coin for the TransactionBuilder.

Imagine that the multi-sig P2SH receives a coin in a transaction called received.

Script redeemScript =
    PayToMultiSigTemplate
    .Instance
    .GenerateScriptPubKey(2, new[] { bob.PubKey, alice.PubKey, satoshi.PubKey });
////Console.WriteLine(redeemScript.Hash.ScriptPubKey);
//Console.WriteLine(redeemScript.Hash.GetAddress(Network.Main));

Transaction received = Transaction.Create(Network.Main)
//Pay to the script hash
received.Outputs.Add(Money.Coins(1.0m), redeemScript.Hash);

Warning: The payment is sent to redeemScript.Hash and not to redeemScript!

When any two owners out of the three that control the multi-sig address (Alice/Bob/Satoshi) then want to spend what they have received, instead of creating a Coin they will need to create a ScriptCoin.

//Give the redeemScript to the coin for Transaction construction
//and signing
ScriptCoin coin = received.Outputs.AsCoins().First()
                                    .ToScriptCoin(redeemScript);

The rest of the code concerning transaction generation and signing is exactly the same as in the previous section about native multi sig.