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BIP-137 vs BIP-322 vs BIP-127

Three Bitcoin proof standards. Three different jobs.

BIP-137

Legacy message signing

Control of a private key for a legacy-style address.

BIP-322

Generic message signing

Ability to satisfy the script for a Bitcoin address.

BIP-127

Proof of reserves

Control of a set of reserve UTXOs at a stated block.

The short version

Use BIP-137 when the wallet gives you a classic Bitcoin signed message. Use BIP-322 when the address is SegWit, Taproot, script-based, or otherwise modern. Use BIP-127 when the question is not one address, but reserves.

They are complementary. BIP-137 and BIP-322 answer, "Can this signer prove control of this address?" BIP-127 answers, "Can this institution show reserve inputs tied to this commitment?"

Comparison

BIP-137

Best for

P2PKH wallets and older signing flows.

Proof output

Base64 recoverable ECDSA signature.

BIP-322

Best for

SegWit, Taproot, script, and modern wallet flows.

Proof output

Witness stack, transaction, or PSBT-style proof data.

BIP-127

Best for

Custodians, treasury desks, exchanges, and reserve audits.

Proof output

Proof transaction set with proof-file metadata.

Network mode

The network must match the proof. A mainnet address or proof must not be accepted while the system is in test mode. A test-network address or proof must not be accepted in production mode.

  • Production mode: mainnet addresses such as bc1..., 1..., and 3....
  • Test mode: test-network addresses such as tb1..., m..., n..., and 2....
  • BIP-127 proof files identify the network with network magic values for mainnet and testnet.

Business use

For a borrower proving an address balance, BIP-137 or BIP-322 is enough. The holder signs a challenge. The verifier checks the signature and current balance.

For an institution proving reserves across many UTXOs, BIP-127 is the better shape. It lets the issuer bind a set of inputs to a commitment message and block reference. That is closer to an audit artifact than a single wallet signature.

The standards do not remove judgment. They give the evidence a Bitcoin-native form that can be checked by software and preserved in reports.