B++ Logo
Feedback

Bitcoin Development

How to build apps.

This section covers practical Bitcoin development tasks, the building blocks you'll use when creating Bitcoin applications. These guides focus on hands-on implementation: constructing transactions, managing keys, generating addresses, working with PSBTs, monitoring the blockchain, and more.

Prerequisites: Before diving into these topics, make sure you're familiar with Setup & Infrastructure topics like installing Bitcoin, testing, and using libraries.

Core Development Tasks

Key Management

Securely generate, store, and manage Bitcoin private keys. Learn about key derivation, encryption, and hardware wallet integration.

Key topics:

  • Private key generation
  • Key derivation (BIP32)
  • Secure storage practices
  • Hardware wallet protocols

Address Generation

Generate and validate Bitcoin addresses for different address types (P2PKH, P2SH, P2WPKH, P2WSH, P2TR). Understand encoding, validation, and best practices.

Key topics:

  • Address types and encoding
  • Bech32 and Base58 encoding
  • Address validation
  • Derivation paths

Transaction Construction

Build Bitcoin transactions from scratch, understanding inputs, outputs, fees, and signing. Learn the complete process from UTXO selection to broadcasting.

Key topics:

  • Transaction structure and serialization
  • Fee calculation strategies
  • Coin selection algorithms
  • Signing and validation

PSBT

Partially Signed Bitcoin Transactions (BIP-174) provide a standardized format for passing unsigned or partially signed transactions between different software and hardware. Essential for multi-party signing, hardware wallet integration, and air-gapped setups.

Key topics:

  • PSBT structure and workflow
  • Creating and combining PSBTs
  • Hardware wallet integration
  • Multi-signature coordination

Monitoring & Integration

Blockchain Monitoring

Monitor the Bitcoin blockchain programmatically, track transactions, watch addresses, and respond to network events in real-time.

Key topics:

  • Block and transaction monitoring
  • Address watching
  • Mempool tracking
  • WebSocket and API integration

Price Tracking

Integrate Bitcoin price data into your applications using various APIs and services. Track prices, historical data, and market metrics.

Key topics:

  • Price API integration
  • Historical data retrieval
  • Real-time price feeds
  • Market data aggregation

Advanced Topics

Pool Mining

Develop mining pool software, understand pool protocols, and build mining-related applications.

Key topics:

  • Mining pool protocols
  • Stratum protocol
  • Share validation
  • Pool architecture

Bitcoin Script Patterns

Common Bitcoin script patterns and templates for building smart contracts and advanced spending conditions.

Key topics:

  • Script templates
  • Common patterns (multisig, timelocks, etc.)
  • Script optimization
  • Miniscript integration

Miniscript

Structured policy language that compiles to Bitcoin Script. Express spending conditions in high-level policies and get correct, analyzable scripts for multisig, timelocks, vaults, and Taproot.

Key topics:

  • Policy vs. script
  • Fragments and composition
  • Correctness and safety
  • Tapscript support

Development Workflow

Typical Development Flow

  1. Setup: Install Bitcoin Core and configure your development environment
  2. Keys & Addresses: Generate keys and addresses for your application
  3. Transaction Building: Construct transactions using UTXOs
  4. Signing: Sign transactions (directly or using PSBTs)
  5. Monitoring: Track transactions and blockchain state
  6. Testing: Use test networks before mainnet

Integration Points

These development tasks integrate with:

Common Patterns

Transaction Creation Pattern

# 1. Select UTXOs
utxos = select_utxos(amount_needed, fee_rate)

# 2. Create transaction
tx = create_transaction(utxos, recipient_address, amount)

# 3. Sign transaction
signed_tx = sign_transaction(tx, private_keys)

# 4. Broadcast
txid = broadcast_transaction(signed_tx)

PSBT Workflow Pattern

# 1. Create unsigned PSBT
psbt = create_psbt(inputs, outputs)

# 2. Pass to signer (hardware wallet, etc.)
signed_psbt = hardware_wallet.sign(psbt)

# 3. Combine signatures
final_psbt = combine_psbts([psbt1, psbt2, psbt3])

# 4. Extract and broadcast
final_tx = finalize_psbt(final_psbt)
broadcast(final_tx)

Best Practices

Security

  • Never hardcode keys: Use secure storage and environment variables
  • Validate all inputs: Especially addresses and amounts
  • Use established libraries: Don't roll your own cryptographic code
  • Test thoroughly: Always test on testnet/signet before mainnet

Transaction Construction

  • Calculate fees properly: Too low = stuck, too high = waste
  • Handle dust outputs: Outputs below ~546 sats may be unspendable
  • Verify before broadcasting: Double-check all transaction details
  • Use PSBT for complex scenarios: Multi-party or hardware wallet signing

Monitoring

  • Handle reorgs: Transactions can be reversed until deeply confirmed
  • Wait for confirmations: 6 blocks for high-value transactions
  • Don't trust unconfirmed: Zero-conf can be double-spent
  • Monitor mempool: Track transaction propagation and fee rates

Resources