Subject: [bitcoin-dev] Adding xpub field to PSBT to make multisig more secure

From: Stepan Snigirev <[email-masked]>
Date: Fri, 26 Apr 2019 17:21:06 +0200

Hi list,

I was looking at the bip174 PSBT specs, in particular for multisignature
setup, and I think with current spec there is a way to steal user funds in
M of N setup with M ≤ N/2.

I made a small write-up on this:
https://github.com/stepansnigirev/random_notes/blob/master/psbt_multisig.md

To compress:

Currently in PSBT there is no way to reliably say if the output uses the
keys derived from the same root keys as the inputs aside from the key owned
by the signer => there is no way to verify that the output is a change
output in multisig setup.

Therefore an attacker can replace half of the keys in the change address by
his own keys and still get the transaction signed.

I suggest to add an xpub field to the inputs and outputs metadata, then
signers can verify that the same xpubs are used for public keys in inputs
and outputs => output is indeed a change.

Normally change and receiving addresses are derived from the same xpub with
non-hardened derivation pathes, so providing xpub after the last hardened
index should be enough to see that public keys of inputs and change output
are derived from the same xpub.

I suggest to add the following key-value pairs to PSBT:

Type: BIP 32 public key `PSBT_IN_BIP32_XPUB = 0x10`
- Key: derivation path for xpub
  `{0x10}|{master key fingerprint}|{32-bit int}|...|{32-bit int}`
- Value: 78-byte xpub value
  `{xpub}`

Type: BIP 32 public key `PSBT_OUT_BIP32_XPUB = 0x03`
- Key: derivation path for xpub
  `{0x03}|{master key fingerprint}|{32-bit int}|...|{32-bit int}`
- Value: 78-byte xpub value
  `{xpub}`

Derivation paths are in the key of the key-value pair as they are used for
lookup, and xpub itself is the actual value being looked up.

I also want to mention that Trezor for example doesn't suffer from this
problem as they use xpubs to verify change outputs. So it may make sense to
go through the communication protocols of existing hardware /
multisignature wallets and see if there is something else we are missing.

If everyone is happy about the proposal I would prepare a pull request to
the bip.

Best regards,
Stepan Snigirev.