PSBT Transactions: Bringing the Highest Grade of Security to BTC Transactions

Team Cuvex
Oct 8
3 min read

Security in Bitcoin transactions has come a long way from the simple online wallet applications of the early days.

Hardware wallets revolutionized this space by taking transactions into a dedicated environment.

But as threats evolve from sophisticated remote exploits to physical threat vectors the need for great security has never been greater.

Thankfully, as part of the BIP 174 proposal, Bitcoin came to the community’s rescue with its Partially Signed Bitcoin Transactions (PSBT) standard.

PSBT Transactions: Bringing the Highest Grade of Security to BTC Transactions

A Rundown of PSBT in Simple Terms

PSBT allows wallets to create a transaction and fill out all the details, such as how much to send and whom to send it to. Think of it like writing a contract: it only comes into effect once it’s actually signed.

In practice, this means you could create transactions anywhere without any safety concerns whether that’s your smartphone at a cafe or a computer in a library.

This is done using a Watch Only Wallet (WOW), which is essentially a limited application that can view funds and generate receiving addresses, but it can’t sign transactions on its own.

Once the transaction is created, albeit partially, it can be sent to an external, trusted environment through a secure medium like a QR code scan.

This is typically done through a hardware wallet, which uses the stored private key to sign the transaction offline.

The signed transaction is then forwarded to the watch-only wallet, from where it’s broadcasted to the blockchain network using the internet.

The beauty of this setup lies in the air gapped security it offers: your private key never leaves the secure confines of the hardware wallet.

Since the hardware wallet is physically incapable of remote communication, it’s physically impossible for anyone to steal your private keys even if they somehow infiltrate your computer or smartphone.

PSBT Transactions: Bringing the Highest Grade of Security to BTC Transactions

The Cutting Edge of Secure BTC Transactions in 2025

While the PSBT-based setup outlined earlier is a massive upgrade over a hot digital wallet, there’s still room for upgrades.

For starters, that setup leaves your crypto fortunes vulnerable to physical threats, misplacement, and more. Anyone with access to the hardware wallet could potentially drain it empty.

Cuvex takes a radically different approach. The unsigned PSBT transaction is first transferred to an NFC card.

Using the world’s leading secure chip element for a dedicated environment, the Cuvex device verifies the transaction details first.

Upon confirmation, the device requests a second NFC card with the encrypted seed phrase.

The seed phrase is decrypted in the secure element chip using the manual user pin.

The signed transaction is then forwarded to the wallet application for broadcasting to the blockchain network.

At the same time, the seed phrase is immediately and irrecoverably erased from the Cuvex device.

Thanks to this revolutionary double air-gapped solution, Cuvex offers unparalleled security for crypto transactions, including PSBT BTC transactions.

Furthermore, this advanced setup unlocks a variety of additional user benefits:

No Single Point of Failure: Even if the user’s smartphone and Cuvex device are compromised, it is impossible to move funds without the NFC key and the Password.
Physical Threats Protection: From criminals to natural disasters, Cuvex safeguards assets through geographically distributed NFC cards. The private keys can be replicated across multiple cards and then placed at multiple locations for maximum redundancy.
Multi-Signature Transactions: Couples, business partners, and any groups can set up multi-sig wallets where funds can only be moved with the consent of all parties.
And much more