Proof of Ownership for BTC Addresses: A Detailed Guide

Proving ownership of a Bitcoin (BTC) address is a crucial aspect in various scenarios, such as verifying identity in a transaction or demonstrating holdings without revealing private keys. This guide explores how to prove ownership for different BTC address types, including algorithm specifications and step-by-step methods.

BTC Address Types

1. P2PKH (Pay-to-Public-Key-Hash)
2. P2SH (Pay-to-Script-Hash)
3. P2WPKH (Pay-to-Witness-Public-Key-Hash)
4. P2WSH (Pay-to-Witness-Script-Hash)

Each address type has specific methods to prove ownership, typically involving cryptographic signatures.

General Method for Proving Ownership

For all address types, the core concept involves signing a message with the private key corresponding to the Bitcoin address and verifying this signature using the public key.

Steps to Prove Ownership

1. Generate a Message: A unique, non-reusable message to avoid replay attacks. This message may include a timestamp, nonce, or specific challenge text.

2. Sign the Message: Use the private key associated with the BTC address to sign the message.

3. Verify the Signature: Use the public key to verify the signature against the original message. If the signature is valid, ownership is proved.

Detailed Algorithms and Specifications

P2PKH (Pay-to-Public-Key-Hash)

Address Format: Begins with 1

Algorithm

1. Hash the Public Key: Use SHA-256 followed by RIPEMD-160 to obtain the public key hash.

2. Create a Signature:

   • Use ECDSA (Elliptic Curve Digital Signature Algorithm) to sign the message with the private key.
   • The signature is a pair of integers (r, s).
3. Verification:
   • Recover the public key from the signature.
   • Hash the recovered public key and compare it to the address’s public key hash.
   • If they match, the signature is valid.

Steps

1. Generate a message: "I own this address. [timestamp]"
2. Sign the message with the private key.
3. Verify the signature using the public key.

P2SH (Pay-to-Script-Hash)

Address Format: Begins with 3

Algorithm

1. Redeem Script: Provides the conditions to spend from the address.

2. Create a Signature:

   • Similar to P2PKH, sign the message with the private key used in the redeem script.
3. Verification:
   • Validate the redeem script against the P2SH address.
   • Verify the signature using the public key in the redeem script.

Steps

1. Generate a message: "I own this address. [timestamp]"
2. Sign the message with the private key used in the redeem script.
3. Verify using the redeem script and public key.

P2WPKH (Pay-to-Witness-Public-Key-Hash)

Address Format: Begins with bc1

Algorithm

1. SegWit Structure: Uses Bech32 encoding.

2. Create a Signature:

   • Sign the message using the private key.
   • Use ECDSA for signature generation.
3. Verification:
   • Use the witness program to verify the signature.
   • Confirm the public key hash matches the address.

Steps

1. Generate a message: "I own this address. [timestamp]"
2. Sign the message with the private key.
3. Verify using the witness program and public key.

P2WSH (Pay-to-Witness-Script-Hash)

Address Format: Begins with bc1

Algorithm

1. Complex Scripts: Can include multi-signature or other complex scripts.

2. Create a Signature:

   • Similar process to P2WPKH but involves the script hash.
3. Verification:
   • Verify the witness script against the P2WSH address.
   • Check signatures using the public keys in the script.

Steps

1. Generate a message: "I own this address. [timestamp]"
2. Sign the message using the private keys defined in the script.
3. Verify using the witness script and public keys.

Security Considerations

• Non-Reusable Messages: Always use unique messages to prevent replay attacks.
• Private Key Safety: Never expose private keys during the process.
• Secure Environment: Perform signing operations in a secure, offline environment when possible.

Conclusion

Proving ownership of a Bitcoin address involves cryptographic techniques to ensure security and authenticity. Each address type has specific methods tailored to its structure and use case. By following these detailed algorithms and steps, you can confidently demonstrate ownership of BTC addresses while maintaining privacy and security.