BOLT-03: Bitcoin Transaction Formats

BOLT-03 specifies the exact Bitcoin transaction formats used in Lightning channels. This includes funding transactions, commitment transactions, and HTLC output scripts.

Specification Summary

Aspect	Value
Status	Final
Layer	Bitcoin
Purpose	Transaction formats
Dependencies	BOLT-02

Transaction Types

Transaction	Purpose	When Created
Funding	Creates channel	Channel open
Commitment	Current state	Each update
HTLC-Success	Claim HTLC	Preimage reveal
HTLC-Timeout	Refund HTLC	After timeout
Closing	Cooperative close	Mutual agreement

Funding Transaction

Creates the channel by locking funds in a 2-of-2 multisig.

Output Script

OP_2 <pubkey1> <pubkey2> OP_2 OP_CHECKMULTISIG

Where pubkey1 < pubkey2 (lexicographically sorted).

P2WSH Address

def funding_script(pubkey1: bytes, pubkey2: bytes) -> bytes:
    """Generate funding output script."""
    keys = sorted([pubkey1, pubkey2])
    return bytes([
        0x52,  # OP_2
        0x21, *keys[0],  # 33-byte pubkey
        0x21, *keys[1],  # 33-byte pubkey
        0x52,  # OP_2
        0xae   # OP_CHECKMULTISIG
    ])

def funding_address(script: bytes) -> str:
    """Generate P2WSH address from script."""
    script_hash = sha256(script)
    return bech32_encode("bc", 0, script_hash)

Commitment Transaction

Represents current channel state. Each party holds their own asymmetric version.

Structure

Input:
  - Funding transaction output

Outputs (example):
  - to_local: Delayed output to holder
  - to_remote: Immediate output to peer
  - HTLCs: Offered and received HTLCs
  - Anchors: Fee bumping outputs (if enabled)

to_local Output

Holder’s funds with revocation and CSV delay:

OP_IF
    <revocationpubkey>
OP_ELSE
    <to_self_delay>
    OP_CHECKSEQUENCEVERIFY
    OP_DROP
    <local_delayedpubkey>
OP_ENDIF
OP_CHECKSIG

Spending paths:

1. Revocation: Peer can claim if revoked state broadcast
2. Local: Holder can claim after CSV delay

to_remote Output

Peer’s funds, immediately spendable:

# With static_remotekey feature
<remotepubkey> OP_CHECKSIGVERIFY 1 OP_CHECKSEQUENCEVERIFY

# Or simple P2WPKH
<remotepubkey>

Anchor Outputs

Small outputs for CPFP fee bumping:

<local_funding_pubkey> OP_CHECKSIG
OP_IFDUP
OP_NOTIF
    16 OP_CHECKSEQUENCEVERIFY
OP_ENDIF

Value: 330 satoshis each (anchor dust limit).

HTLC Outputs

Offered HTLC (Outgoing)

You’re offering payment, peer can claim with preimage:

# To remote node with preimage:
OP_DUP OP_HASH160 <RIPEMD160(SHA256(revocationpubkey))> OP_EQUAL
OP_IF
    OP_CHECKSIG
OP_ELSE
    <remote_htlcpubkey> OP_SWAP OP_SIZE 32 OP_EQUAL
    OP_IF
        # Payment preimage provided
        OP_HASH160 <RIPEMD160(payment_hash)> OP_EQUALVERIFY
        2 OP_SWAP <local_htlcpubkey> 2 OP_CHECKMULTISIG
    OP_ELSE
        # Timeout path
        OP_DROP <cltv_expiry> OP_CHECKLOCKTIMEVERIFY OP_DROP
        OP_CHECKSIG
    OP_ENDIF
OP_ENDIF

Received HTLC (Incoming)

You’re receiving payment, can claim with preimage:

# Similar structure but inverted roles
OP_DUP OP_HASH160 <RIPEMD160(SHA256(revocationpubkey))> OP_EQUAL
OP_IF
    OP_CHECKSIG
OP_ELSE
    <remote_htlcpubkey> OP_SWAP OP_SIZE 32 OP_EQUAL
    OP_NOTIF
        # Timeout path for remote
        OP_DROP 2 OP_SWAP <local_htlcpubkey> 2 OP_CHECKMULTISIG
    OP_ELSE
        # Payment path with preimage
        OP_HASH160 <RIPEMD160(payment_hash)> OP_EQUALVERIFY
        2 OP_SWAP <local_htlcpubkey> 2 OP_CHECKMULTISIG
    OP_ENDIF
    <cltv_expiry> OP_CHECKLOCKTIMEVERIFY OP_DROP
OP_ENDIF

HTLC-Success Transaction

Claims received HTLC with preimage:

Version: 2
Inputs:
  - HTLC output from commitment
  - Witness: 0 <remotehtlcsig> <localhtlcsig> <payment_preimage>

Outputs:
  - to_local script (with CSV delay)

Locktime: 0

HTLC-Timeout Transaction

Reclaims offered HTLC after timeout:

Version: 2
Inputs:
  - HTLC output from commitment
  - Witness: 0 <remotehtlcsig> <localhtlcsig> <>

Outputs:
  - to_local script (with CSV delay)

Locktime: cltv_expiry

Key Derivation

Per-Commitment Keys

Each commitment uses unique derived keys:

def derive_pubkey(base_point: bytes, per_commitment_point: bytes) -> bytes:
    """Derive pubkey for this commitment."""
    tweak = sha256(per_commitment_point + base_point)
    return point_add(base_point, G * tweak)

def derive_revocation_key(
    revocation_basepoint: bytes,
    per_commitment_point: bytes
) -> bytes:
    """Derive revocation key."""
    # Complex derivation for security
    pass

Basepoints

Each party provides in open_channel/accept_channel:

• funding_pubkey: For funding output
• revocation_basepoint: Derive revocation keys
• payment_basepoint: to_remote outputs
• delayed_payment_basepoint: to_local outputs
• htlc_basepoint: HTLC outputs

Fee Calculation

Weight Estimation

Component	Weight
Base commitment	724
Per-HTLC (no anchors)	172
Per-HTLC (with anchors)	172
Anchor output	330

def commitment_weight(num_htlcs: int, has_anchors: bool) -> int:
    base = 724
    htlc_weight = 172 * num_htlcs
    anchor_weight = 660 if has_anchors else 0
    return base + htlc_weight + anchor_weight

def calculate_fee(weight: int, feerate_per_kw: int) -> int:
    """Calculate fee in satoshis."""
    return (weight * feerate_per_kw + 999) // 1000

Dust Limits

Outputs below dust limit are omitted:

DUST_LIMIT_P2WPKH = 294
DUST_LIMIT_P2WSH = 330

def is_dust(value: int, output_type: str) -> bool:
    if output_type == "p2wpkh":
        return value < DUST_LIMIT_P2WPKH
    return value < DUST_LIMIT_P2WSH

Closing Transaction

Cooperative close with negotiated fee:

Input:
  - Funding output

Outputs:
  - to_local_scriptpubkey (immediate)
  - to_remote_scriptpubkey (immediate)

No timelocks, immediately spendable by both parties.

Related BOLTs

• BOLT-02 - Channel protocol using these transactions
• BOLT-05 - On-chain transaction handling

---

Machine-Readable Summary

{
  "bolt": "03",
  "title": "Bitcoin Transaction Formats",
  "status": "final",
  "transaction_types": [
    "funding",
    "commitment",
    "htlc_success",
    "htlc_timeout",
    "closing"
  ],
  "key_concepts": [
    "2-of-2-multisig",
    "csv-delays",
    "revocation",
    "htlc-scripts"
  ]
}