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Overview

Dynamic’s Node SDK provides comprehensive support for Bitcoin blockchain operations, including wallet creation, transaction signing (PSBT), message signing (BIP-322), and key management. The SDK implements Multi-Party Computation (MPC) for enhanced security.

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Key Features

  • MPC Wallet Creation: Create secure Bitcoin wallets with threshold signature schemes
  • Multiple Address Types: Support for Legacy, SegWit, Native SegWit, and Taproot addresses
  • Transaction Signing: Sign PSBTs (Partially Signed Bitcoin Transactions) without exposing private keys
  • Message Signing: Sign messages using BIP-322 standard
  • Key Import/Export: Import existing private keys (WIF format) and export wallet data
  • Multiple Security Models: Choose between different threshold signature schemes

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Available Threshold Signature Schemes

  • TWO_OF_TWO: Maximum security - requires both server and Dynamic infrastructure
  • TWO_OF_THREE: Balanced security and availability - requires 2 out of 3 shares

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Quick Start

import { DynamicBtcWalletClient } from '@dynamic-labs-wallet/node-btc';
import { ThresholdSignatureScheme } from '@dynamic-labs-wallet/node';
import { BitcoinAddressType } from '@dynamic-labs-wallet/core';

const client = new DynamicBtcWalletClient({
  environmentId: process.env.DYNAMIC_ENVIRONMENT_ID!,
});

await client.authenticateApiToken(process.env.DYNAMIC_AUTH_TOKEN!);

// Create a new wallet
const wallet = await client.createWalletAccount({
  thresholdSignatureScheme: ThresholdSignatureScheme.TWO_OF_TWO,
  backUpToClientShareService: true,
  bitcoinConfig: {
    addressType: BitcoinAddressType.NATIVE_SEGWIT,
  },
});

console.log('Wallet created:', wallet.accountAddress);

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Core Functions

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Wallet Management

  • createWalletAccount() - Create new Bitcoin wallet
  • importPrivateKey() - Import existing private key (WIF format)
  • getBitcoinWallets() - Get all Bitcoin wallets
  • deriveAccountAddress() - Derive Bitcoin address from a public key

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Signing Operations

  • signMessage() - Sign messages using BIP-322
  • signTransaction() - Sign PSBTs (Partially Signed Bitcoin Transactions)

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Key Management

  • exportPrivateKey() - Export wallet private key in WIF format
  • offlineExportPrivateKey() - Export private key from key shares offline

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Backup and Recovery

  • storeEncryptedBackupByWallet() - Store encrypted backup
  • recoverEncryptedBackupByWallet() - Recover encrypted backup
  • refreshWalletAccountShares() - Refresh wallet shares

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Guides

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Prerequisites

Before using the BTC SDK, ensure you have:
  1. Dynamic Project Setup: Set up your Dynamic project
  2. Environment Configuration: Configure your environment ID and auth token
  3. BTC Chain Enabled: Enable Bitcoin chain in your Dynamic dashboard
  4. Dependencies Installed: Install required packages

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Installation

bun add @dynamic-labs-wallet/node-btc @dynamic-labs-wallet/node @dynamic-labs-wallet/core

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Environment Variables

DYNAMIC_AUTH_TOKEN=your_auth_token_here
DYNAMIC_ENVIRONMENT_ID=your_environment_id_here

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Bitcoin-Specific Concepts

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Address Types

Bitcoin supports multiple address types, each with different features:
Address TypePrefixDescription
Legacy (P2PKH)1...Original Bitcoin address format
SegWit (P2SH)3...Backwards-compatible SegWit
Native SegWit (P2WPKH)bc1q...Modern, lower fees
Taproot (P2TR)bc1p...Latest, privacy-enhanced, Schnorr signatures

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Native Unit

Bitcoin uses satoshis as its smallest unit: 1 BTC = 100,000,000 satoshis.

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Transaction Format

Bitcoin transactions use PSBT (Partially Signed Bitcoin Transactions) for signing. The signTransaction() method accepts a PSBT as a base64 string and returns the signed PSBT.

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Message Signing

The SDK uses BIP-322 for message signing, which provides a standardized way to sign messages that works across all address types.

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WIF Format

Private keys are imported and exported in WIF (Wallet Import Format), a base58-encoded format that includes the network and compression flag.

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Security Considerations

  • MPC Architecture: Private keys are never stored in plain text
  • Threshold Signing: Multiple parties must collaborate to sign transactions
  • Key Share Backup: Use backUpToClientShareService: true for secure storage
  • Password Protection: Implement strong passwords for additional security layers

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Network Support

The SDK currently supports Bitcoin Mainnet only. Testnet support is planned for a future release.

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Error Handling

Always implement proper error handling: 
try {
  const result = await btcClient.someFunction(params);
  console.log('Operation successful:', result);
} catch (error) {
  console.error('Operation failed:', error instanceof Error ? error.message : String(error));
}

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Next Steps