Data Anchoring with OP_RETURN

To follow along this tutorial

Clone the Github repository
cd code
npm install or yarn install
Execute the transaction code by typing node tx_filename.js
Alternatively you can enter the commands step-by-step by cd into ./code then type node in a terminal to open the Node.js REPL
Open the Bitcoin Core GUI console or use bitcoin-cli for the Bitcoin Core commands
Use bx aka Libbitcoin-explorer as a handy complement

Let’s store for eternity some data on the Bitcoin blockchain using the special OP_RETURN opcode. It will create a special nulldata output type.

An output using an OP_RETURN is provably unspendable, so we don’t need to lock any BTC in this UTXO. However, we still need to pay the miner fees, so we will spend BTC from a previous P2WPKH UTXO, create one nulldata UTXO and an other one for the change, leaving the difference as mining fees.

For more information about OP_RETURN check out:

Create a UTXO to spend from

Let’s create a P2WPKH UTXO to spend from.

Import libraries, test wallet and set the network.

const bitcoin = require('bitcoinjs-lib')
const { alice } = require('./wallets.json')
const network = bitcoin.networks.regtest

Send 1 BTC to alice_1 P2WPKH address via Bitcoin Core CLI.

sendtoaddress bcrt1qlwyzpu67l7s9gwv4gzuv4psypkxa4fx4ggs05g 1

Get the output index so that we have the outpoint (txid / vout).

gettransaction TX_ID

Find the output index (or vout) under vout.

Creating the transaction

Now let’s create our OP_RETURN P2PKH UTXO.

Create a bitcoinJS key pair object for the spender alice_1 and a P2WPKH address that we will use for the change.

const keyPairAlice1 = bitcoin.ECPair.fromWIF(alice[1].wif, network)
const p2wpkhAlice1 = bitcoin.payments.p2wpkh({pubkey: keyPairAlice1.publicKey, network})
console.log('P2WPKH alice_1 address:')
console.log(p2wpkhAlice1.address)

Create a BitcoinJS transaction builder object.

const txb = new bitcoin.TransactionBuilder(network)

Fill in the outpoint.

// txb.addInput(prevTx, prevOut, sequence, prevTxScript)
txb.addInput('TX_ID', TX_VOUT, null, p2wpkhAlice1.output)

Don’t forget the prevTxScript, necessary because we are spending a P2WPKH.

Create an OP_RETURN output with BitcoinJS embed payment method.

const data = Buffer.from('Programmable money FTW!', 'utf8')
const embed = bitcoin.payments.embed({data: [data]})
txb.addOutput(embed.output, 0)

An output using an OP_RETURN is provably unspendable, the script will always evaluate to false. For this reason, and because this is a Bitcoin Core policy rule, the value of an OP_RETURN output is set to 0.

Create a second output to get back the change. 100 000 000 - 100 000(fees) = 99 900 000 sats

txb.addOutput(p2wpkhAlice1.address, 99900000)

Keep note of the bitcoin value of the UTXO we are spending, necessary because we are spending a P2WPKH.

Alice_1 signs the first input.

// txb.sign(index, keyPair, redeemScript, sign.hashType, value, witnessScript)
txb.sign(0, keyPairAlice1, null, null, 1e8, null)

Since we are spending a Segwit UTXO, we need to sign its value, 1e8 btc.

Finally we can build the transaction and get the raw hex serialization.

const tx = txb.build()
console.log('Transaction hexadecimal:')
console.log(tx.toHex())

Inspect the raw transaction with Bitcoin Core CLI, check that everything is correct.

decoderawtransaction TX_HEX

Broadcasting the transaction

It’s time to broadcast the transaction.

sendrawtransaction TX_HEX

Inspect the transaction.

getrawtransaction TX_ID true

Observations

We note that the OP_RETURN UTXO is marked with the special type nulldata.

To decode the OP_RETURN data we can use the xxd library in a terminal which make a hexdump or the reverse.

echo 50726f6772616d6d61626c65206d6f6e65792046545721 | xxd -p -r

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