Script with CHECKLOCKTIMEVERIFY - Legacy P2SH

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 create a legacy P2SH transaction with a script that contains the OP_CHECKLOCKTIMEVERIFY absolute timelock opcode.

Learn more about OP_CHECKLOCKTIMEVERIFY in BIP65

Either alice_1 can redeem the funds on her P2WPKH address after the timelock has expired, or bob_1 and alice_1 can redeem the funds at any time. We will set the timelock 6 hours in the past. In real life it should be set in the future, but we don’t want to wait for the timelock to expire in order to complete the tutorial.

The generatetoaddress command, which produce blocks on demand on regtest, will not move forward the mediantime. It sets the mediantime to the current local time of your computer.

function cltvCheckSigOutput(aQ, bQ, lockTime) {
  return bitcoin.script.fromASM(
    `
      OP_IF
          ${bitcoin.script.number.encode(lockTime).toString('hex')}
          OP_CHECKLOCKTIMEVERIFY
          OP_DROP
      OP_ELSE
          ${bQ.publicKey.toString('hex')}
          OP_CHECKSIGVERIFY
      OP_ENDIF
      ${aQ.publicKey.toString('hex')}
      OP_CHECKSIG
    `
      .trim()
      .replace(/\s+/g, ' '),
  );
}

Creating and Funding the P2SH

Import libraries, test wallets and set the network and sighash type.

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

We also need an additional library to help us with BIP65 absolute timelock encoding.

const bip65 = require('bip65')

Alice_1 and bob_1 are the signers.

const keyPairAlice1 = bitcoin.ECPair.fromWIF(alice[1].wif, network)
const keyPairBob1 = bitcoin.ECPair.fromWIF(bob[1].wif, network)

Encode the lockTime value according to BIP65 specification (now - 6 hours).

const lockTime = bip65.encode({utc: Math.floor(Date.now() / 1000) - (3600 * 6)}) (1)
console.log('Timelock in UNIX timestamp:')
console.log(lockTime)

1	Method argument is a UNIX timestamp.

Make sure to use the same lockTime throughout the tutorial. You can run the code a first time to get a lockTime and hardcode that value everywhere it’s needed.

Generate the redeemScript with CLTV.

const redeemScript = cltvCheckSigOutput(keyPairAlice1, keyPairBob1, lockTime)
console.log('Redeem script:')
console.log(redeemScript.toString('hex'))

We can decode the script in Bitcoin Core CLI with decodescript.

Generate the P2SH.

const p2sh = bitcoin.payments.p2sh({redeem: {output: redeemScript, network}, network})
console.log('P2SH address:')
console.log(p2sh.address)

The P2SH address depends on the redeemScript which depends on the lockTime, make sure to hardcode the lockTime.

Send 1 BTC to this P2SH address.

sendtoaddress P2SH_ADDR 1

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

gettransaction TX_ID

Find the output index (or vout) under vout.

Preparing the spending transaction

Now let’s prepare the spending transaction by setting input and output, and the nLockTime value.

Create the PSBT.

const psbt = new bitcoin.Psbt({network})

We need to set the transaction-level locktime in our redeem transaction in order to spend a CLTV. This is only required when executing the first scenario (Alice_1 + CLTV). Use the same value that you used in the redeemScript.

psbt.setLocktime(lockTime)

Because CLTV actually uses nLocktime enforcement consensus rules the time is checked indirectly by comparing redeem transaction nLocktime with the CLTV value. nLocktime must be <= present time and >= CLTV timelock

Create the input by filling TX_ID, TX_OUT and TX_HEX.

psbt.addInput({
  hash: 'TX_ID',
  index: TX_VOUT,
  sequence: 0xfffffffe, (1)
  nonWitnessUtxo: Buffer.from('TX_HEX','hex'),
  redeemScript: Buffer.from(redeemScript, 'hex')
})

1	The input-level nSequence value needs to be change to `0xfffffffe`, which means that nSequence is disabled, nLocktime is enabled and RBF is not signaled.

The funds will be redeemed to Alice_1 P2WPKH address, leaving 100 000 satoshis for the mining fees.

psbt.addOutput({
  address: alice[1].p2wpkh,
  value: 999e5,
})

Creating the unlocking script

There are two ways to redeem the funds, either Alice after the timelock expiry or Alice and Bob at any time. We control which branch of the script we want to run by ending our unlocking script with a boolean value.

Alice_1 signs the transaction that we just built with her private key.

psbt.signInput(0, keyPairAlice1)

Only in scenario 2 Bob_1 signs the transaction.

psbt.signInput(0, keyPairBob1)

Finalize the PSBT.

const getFinalScripts = (inputIndex, input, script) => {
  // Step 1: Check to make sure the meaningful locking script matches what you expect.
  const decompiled = bitcoin.script.decompile(script)
  if (!decompiled || decompiled[0] !== bitcoin.opcodes.OP_IF) {
    throw new Error(`Can not finalize input #${inputIndex}`)
  }

  // Step 2: Create final scripts
  // Scenario 1
  const paymentFirstBranch = bitcoin.payments.p2sh({
    redeem: {
      input: bitcoin.script.compile([
        input.partialSig[0].signature,
        bitcoin.opcodes.OP_TRUE,
      ]),
      output: redeemScript
    }
  })

  // Scenario 2
  /*
  const paymentSecondBranch = bitcoin.payments.p2sh({
    redeem: {
      input: bitcoin.script.compile([
        input.partialSig[0].signature,
        input.partialSig[1].signature,
        bitcoin.opcodes.OP_FALSE
      ]),
      output: redeemScript
    }
  })
  */

  return {
    finalScriptSig: paymentFirstBranch.input
  }
}

psbt.finalizeInput(0, getFinalScripts)

Extract the transaction and get the raw hex serialization.

console.log('Transaction hexadecimal:')
console.log(psbt.extractTransaction().toHex())

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

decoderawtransaction TX_HEX

Broadcasting the transaction

If you are spending the P2SH as Alice + timelock after expiry, you must have the node’s mediantime to be higher than the timelock value.

mediantime is the median timestamp of the previous 11 blocks. Check out BIP113 for more information.

Check the current mediantime

getblockchaininfo

You need to generate some blocks in order to have the node’s mediantime synchronized with your computer local time.

It is not possible to give you an exact number. 20 should be enough. Dave_1 is our miner.

generatetoaddress 20 bcrt1qnqud2pjfpkqrnfzxy4kp5g98r8v886wgvs9e7r

It’s now time to broadcast the transaction via Bitcoin Core CLI.

sendrawtransaction TX_HEX

Inspect the transaction.

getrawtransaction TX_ID true

Observations

For the first scenario, we note that our scriptSig contains:

Alice_1 signature
1, which is equivalent to OP_TRUE
the redeem script, that we can decode with decodescript

For the second scenario, we note that our scriptSig contains:

Alice_1 signature
Bob_1 signature
0, which is equivalent to OP_FALSE
the redeem script, that we can decode with decodescript

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