Signing Bitcoin transactions

There is a part of the Bitcoin protocol that I don't quite understand.

When you make a transaction, and spend the output of a previous transaction for say 1 BTC, you provide a signature using the private key matching the public key (or address) that appears in the output of the previous transaction. My first question here is what exactly is signed?

Second, when the transaction is broadcast, what prevents a malicious peer to take the input of my transaction with signature, for 1 BTC, and forge a new transaction using that same input going to their own address? To avoid that, the full transaction (including outputs) would need to be signed, I couldn't find a document indicating the whole transaction is signed.

Flavien

Posted 2013-01-24T10:06:24.967

Reputation: 907

That is good question, I'm asking the same and can't understand how outputs list is protected, it looks like outputs signed with public key, but public keys are not secure. – Vedmant – 2017-09-26T23:33:05.667

Yeah great question, I asked myself the same question but I found the answer looking all the transcations wiki. – Gopoi – 2013-01-25T23:33:30.850

Answers

From what I gather you sign both the input and the output of the transaction, meaning that nobody can alter the content of the transaction without invalidating your signature. I also had some problems with this part of the algorithm, and even asked a similar question earlier, but this one deals with more of the low-level bit operations rather than the high-level concept.

ThePiachu

Posted 2013-01-24T10:06:24.967

Reputation: 41 594

4What is being signed is indeed (a modified version of) the entire transaction. The details are complex (see the question linked to be the answer), but most importantly, the transaction inputs are stripped before signing (as otherwise, the signature would need to sign itself before signing, which is computationally infeasible). – Pieter Wuille – 2013-01-24T12:14:07.370

1Thanks, that makes sense. So if there are 3 inputs in a transaction, each input will contain a signature (they may be 3 different signatures) of the whole transaction (minus the inputs), correct? – Flavien – 2013-01-24T13:08:36.303