PSBT
Partially signed Bitcoin transaction
A PSBT is a standard file format, defined in BIP174, for a Bitcoin transaction that is not yet fully signed, carrying the extra data a separate signing device needs to check and sign it.
BIP174 splits the work into roles: creator, updater, signer, combiner, finalizer and extractor. A desktop wallet usually builds the PSBT; a hardware wallet signs it.
Because the PSBT includes the outputs being spent and key paths, the signer can verify which outputs are change and which are payments, and show the user the real destination and amount.
BIP370 defined a second version of the format that allows inputs and outputs to be added after creation. See what is a PSBT.
Sources
Last updated