diff --git a/src/transaction.js b/src/transaction.js
index afd21da..3abdd80 100644
--- a/src/transaction.js
+++ b/src/transaction.js
@@ -61,7 +61,7 @@ Transaction.objectify = function (txs) {
  *
  * Can be called with any of:
  *
- * - An existing TransactionOut object
+ * - An existing TransactionIn object
  * - A transaction and an index
  * - A transaction hash and an index
  * - A single string argument of the form txhash:index
@@ -77,9 +77,11 @@ Transaction.prototype.addInput = function (tx, outIndex) {
         return this.addInput(args[0], args[1]);
     }
     else {
+        var hash = typeof tx === "string" ? tx : tx.hash
+        var hash = Array.isArray(hash) ? convert.bytesToHex(hash) : hash
         this.ins.push(new TransactionIn({
             outpoint: {
-                hash: tx.hash || tx,
+                hash: hash,
                 index: outIndex
             },
             script: new Script(),
diff --git a/test/transaction.js b/test/transaction.js
index 7f1cd30..89b69b8 100644
--- a/test/transaction.js
+++ b/test/transaction.js
@@ -1,5 +1,6 @@
-var Transaction = require('../src/transaction.js').Transaction
-var convert = require('../src/convert.js')
+var Transaction = require('../src/transaction').Transaction
+var convert = require('../src/convert')
+var ECKey = require('../src/eckey').ECKey
 var assert = require('assert')
 
 describe('Transaction', function() {
@@ -61,5 +62,115 @@ describe('Transaction', function() {
     })
   })
 
+  describe('creating a transaction', function() {
+    var tx, prevTx
+    beforeEach(function() {
+      prevTx = Transaction.deserialize('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')
+      tx = new Transaction()
+    })
+
+    describe('addInput', function(){
+      it('allows a Transaction object to be passed in', function(){
+        tx.addInput(prevTx, 0)
+        verifyTransactionIn()
+      })
+
+      it('allows a Transaction hash to be passed in', function(){
+        tx.addInput("0cb859105100ebc3344f749c835c7af7d7103ec0d8cbc3d8ccbd5d28c3c36b57", 0)
+        verifyTransactionIn()
+      })
+
+      it('allows a TransactionIn object to be passed in', function(){
+        var txCopy = tx.clone()
+        txCopy.addInput(prevTx, 0)
+        var transactionIn = txCopy.ins[0]
+
+        tx.addInput(transactionIn)
+        verifyTransactionIn()
+      })
+
+      it('allows a string in the form of txhash:index to be passed in', function(){
+        tx.addInput("0cb859105100ebc3344f749c835c7af7d7103ec0d8cbc3d8ccbd5d28c3c36b57:0")
+        verifyTransactionIn()
+      })
+
+      function verifyTransactionIn(){
+        assert.equal(tx.ins.length, 1)
+
+        var input = tx.ins[0]
+        assert.equal(input.sequence, 4294967295)
+
+        assert.equal(input.outpoint.index, 0)
+        assert.equal(input.outpoint.hash, "0cb859105100ebc3344f749c835c7af7d7103ec0d8cbc3d8ccbd5d28c3c36b57")
+
+        assert.deepEqual(input.script.buffer, [])
+      }
+    })
+
+    describe('addOutput', function(){
+      it('allows an address and a value to be passed in', function(){
+        tx.addOutput("15mMHKL96tWAUtqF3tbVf99Z8arcmnJrr3", 40000)
+        verifyTransactionOut()
+      })
+
+      it('allows a string in the form of address:index to be passed in', function(){
+        tx.addOutput("15mMHKL96tWAUtqF3tbVf99Z8arcmnJrr3:40000")
+        verifyTransactionOut()
+      })
+
+      it('allows a TransactionOut object to be passed in', function(){
+        var txCopy = tx.clone()
+        txCopy.addOutput("15mMHKL96tWAUtqF3tbVf99Z8arcmnJrr3:40000")
+        var transactionOut = txCopy.outs[0]
+
+        tx.addOutput(transactionOut)
+        verifyTransactionOut()
+      })
+
+      function verifyTransactionOut(){
+        assert.equal(tx.outs.length, 1)
+
+        var output = tx.outs[0]
+        assert.equal(output.value, 40000)
+        assert.deepEqual(convert.bytesToHex(output.script.buffer), "76a9143443bc45c560866cfeabf1d52f50a6ed358c69f288ac")
+      }
+    })
+
+    describe('sign', function(){
+      it('works', function(){
+        tx.addInput("0cb859105100ebc3344f749c835c7af7d7103ec0d8cbc3d8ccbd5d28c3c36b57:0")
+        tx.addOutput("15mMHKL96tWAUtqF3tbVf99Z8arcmnJrr3:40000")
+        tx.addOutput("1Bu3bhwRmevHLAy1JrRB6AfcxfgDG2vXRd:50000")
+
+        var key = new ECKey('L44f7zxJ5Zw4EK9HZtyAnzCYz2vcZ5wiJf9AuwhJakiV4xVkxBeb')
+        tx.sign(0, key)
+
+        var pub = key.getPub().export('bytes')
+        var script = prevTx.outs[0].script.buffer
+        var sig = tx.ins[0].script.chunks[0]
+
+        assert.equal(tx.validateSig(0, script, sig, pub), true)
+      })
+    })
+
+    describe('validateSig', function(){
+      var validTx
+
+      beforeEach(function() {
+        validTx = Transaction.deserialize('0100000001576bc3c3285dbdccd8c3cbd8c03e10d7f77a5c839c744f34c3eb00511059b80c000000006b483045022100a82a31607b837c1ae510ae3338d1d3c7cbd57c15e322ab6e5dc927d49bffa66302205f0db6c90f1fae3c8db4ebfa753d7da1b2343d653ce0331aa94ed375e6ba366c0121020497bfc87c3e97e801414fed6a0db4b8c2e01c46e2cf9dff59b406b52224a76bffffffff02409c0000000000001976a9143443bc45c560866cfeabf1d52f50a6ed358c69f288ac50c30000000000001976a91477890e8ec967c5fd4316c489d171fd80cf86997188ac00000000')
+      })
+
+      it('returns true for valid signature', function(){
+        var key = new ECKey('L44f7zxJ5Zw4EK9HZtyAnzCYz2vcZ5wiJf9AuwhJakiV4xVkxBeb')
+        var pub = key.getPub().export('bytes')
+        var script = prevTx.outs[0].script.buffer
+        var sig = validTx.ins[0].script.chunks[0]
+
+        assert.equal(validTx.validateSig(0, script, sig, pub), true)
+      })
+    })
+
+  })
+
 })