River Financial​ is a challenger financial institution specializing in Bitcoin financial services. River Financial’s flagship product, a Bitcoin brokerage, provides retail investors with a high-touch platform to buy and sell Bitcoin.

River Financial leverages two technologies in its wallet software: Partially Signed Bitcoin Transactions (PSBTs) and Output Script Descriptors. The decision to incorporate these standards has introduced greater flexibility and interoperability in River’s wallet operations.

The decision to bring PSBTs into the wallet stack was influenced by the concept of treating key signers as interfaces. PSBT is a format for signers described in BIP174 authored by Andrew Chow. Before this standard, there had been no standardized format to describe an unsigned transaction. As a consequence, each signer used vendor-specific formats which could not interoperate. By conforming to the PSBT standard, the wallet infrastructure can avoid vendor lock-in, reduce the attack surface in the signer logic, and have better guarantees about the transaction being created by the wallet. The standard has also made multisignature scripts safer to use, therefore significantly improving security without a notable increase in operational expense.

The decision to implement Output Script Descriptors in the wallet software has greatly reduced the complexity in wallet operations and has improved flexibility in the feature set. Descriptors is a language for describing scripts that was authored by Pieter Wuille and used in Bitcoin Core. In River’s wallet software, the descriptor language is leveraged in several places from wallet creation to address generation. Before descriptors, there had been no interoperable way for wallets to import useful information about the scripts they used. By using script descriptors, River’s wallet is able to reduce the necessary information needed to start watching a script, address, or set of keys. Each wallet within the wallet software has an associated descriptor with which scripts can be created. This has two immediate benefits:

  1. The wallet software is able to watch cold wallets using descriptors and subsequently derive new addresses. In our flagship brokerage product, River clients can create fresh deposit addresses to deposit Bitcoin directly to a secure cold multisignature wallet.
  2. Creating and importing new wallets is easy because the descriptor language is able to define desired scripts. River is able to maintain many wallets with different scripts and as a result have separate security models for each wallet. A P2WSH multi-signature descriptor is used for the cold wallet and a P2WPKH descriptor for the hot (client withdrawal) wallet. Separate wallets allow River to keep the absolute minimum Bitcoin in the hot wallet (to minimize risk) and better manage the UTXO pool to service withdrawals.

The decision to use both descriptors and the PSBT standard has so far been rewarding because of the flexibility and interoperability. This foundation will help River Financial scale its wallet infrastructure.