Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#181

Describe what Unspent Transaction Outputs (UTXO) are.
Bitcoin UTXOs are records that state positive bitcoin balances available for use. They were the output of prior settlements and they become the input of new payments.

What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
A good wallet will aggregate UTXO balances as necessary to compose a valid bitcoin transaction.

How would a bitcoin wallet specify the transaction fee when creating a transaction?
A bitcoin wallet implies a transaction fee with reduced output.

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You can obfuscate transactions by avoiding key reuse and by creating new keys, which is basically new wallets.

#182
  1. An unspent transaction output is the output of a transaction that a user receives and is able to spend in
    the future.
  2. Nothing. The transaction will not happen the amount will not be covered.
  3. The transaction fee is the difference between the transaction inputs and transaction outputs and is
    determined on previous tansaction fees.
  4. Create a new address each time you receive a transaction.
#183
  1. when the wallet puts these together you get your balance in the wallet
    2.the transaction ends or is not completed
    3.when you transfer btc the wallet will check that you have enough balance for the fee. if not, the btcs are not transmitted. if you have enough, your wallet will deduct the amount
    4.Split balance into many different addresses
#184
  1. UTXO or Unspent Transaction Outputs is the crypto funds you could spend.It is tracked by your wallet
  2. The wallet wont be able to generate a transaction
  3. Transaction fee=Inputs-Outputs
  4. You could always generate new addresses, especially the outputs, so that it is hard to tell which output goes back to the sender
#185

Hello there.
Homework

  1. UTXO is a wallet balance that you can use as input in new transaction.
  2. If your total inputs sum wont cover the amount of output then transaction will not be executed or if the sum of all single UTXO is larger (I have to think on fees) then transaction is executed due to wallet that takes all inputs and adds them up to cover output.
    3.As I understand it is difference between inputs and outputs input=output+fee. Is also correct that fees depends on bites used.
    4.Addresses are not linked to identity, use new address every time you do a transaction.
#186

  1. They are unspent funds held in your wallet from a previous output transaction sent to your wallet.

  2. The transaction would be declined, unable to move funds.

  3. Through the difference between input and output totals

  4. Using different wallet address’s can increase privacy of a transaction because it is harder to track utxo’s from multiple wallets.

#187

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO are the unspent parts (amounts) of the transactions within your wallet.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    The transaction woul dbe declined, latest by the nodes, but I think even earlier as the wallet would check when creating your transaction

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    TX fee = total input - total output.
    In some wallets you can additionally choose the fee manually, but most, the wallet checks the blockchain and determines a fitting fee

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Allways generate new adresses

#188
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • UTXO is the sum of all the inputs/TXs that I have received in my wallet (balance) and that I will be able to spend/send as an output/TX to someone else’s wallet.
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • It would be impossible to go ahead with the transaction, because it means I don’t have enough BTC in my wallet.
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • The formula is INPUT - OUTPUT = TX FEE. The wallet will look at the network and choose a fee based on the last TX Fees in the blockchain. Usually miners will choose to process the TX with higher fees first. (the smaller payments incur in higher fees too)
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • Creating new addresses (in my wallet) every time a transaction is made.
#189
  1. a record of all the transactions that have happened involving you
  2. it won’t let you spend the btc
  3. it checks the blockchain
  4. theyre hashed?
#190

Describe what Unspent Transaction Outputs (UTXO) are.

UTXO is where the previous input transaction becomes your ( UTXO ) output transaction. You always need a UTXO or an Unspent transaction output to make a Transaction. If you don’t have an Unspent transaction output, it simply means you don’t have any Bitcoin.

What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?

The wallet will sum up small UTXOs to make a large transaction. If there are not enough UTXO’s to make up the bvalance, the transaction is invalid.

How would a bitcoin wallet specify the transaction fee when creating a transaction?

Transaction fee is generated from subtracting input minus output

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?

One can create a lot of transaction sending them to others and to self. From an outsider point of view it is impossible to know, which transaction went where.

#191
  1. UTXOs are the funds you have available under different addresses. They are the change you have leftover when you send through a transaction. Your wallet adds together the UTXOs that are available under different addresses to give you a balance of funds available for new tx.
  2. Put simply, the transaction would not be verified.
  3. Some wallets allow you to alter the tx fee, but most will give you a recommended fee that it determines from recent tx on the blockchain, so that miners pick it up and verify it at a reasonable speed.
  4. You can transfer your UTXOs between different addresses you have, to increase anonymity, and decouple yourself from prev. address history.
#192

  1. Unspent Transaction Outputs (UTXOs) are the outputs from transactions that the users own and are able to spend later in other transactions.

  2. If you don’t have a single UTXO that is large enough to cover for your transaction, other UTXOs will be added to it to produce the amount necessary for the desired transaction to be conducted.

  3. A Bitcoin wallet would specify a transaction fee based on the urgency of a transaction. If there is not much urgency to the transaction, the lowest acceptable fee would be specified. If there is a great degree of urgency, the wallet’s owner would specify a higher fee to incentivize a miner to conduct the transaction as a higher priority.

  4. The privacy of transactions can be increased by sending multiple outputs to different addresses, some of which you would possess yourself. In this way, an observer would be prevented from knowing who the recipient of any given output would be.

#193
  1. it is your balance basically.
  2. the wallet will look to add more UTXOs. If not enough UTXOs, the transaction will be invalid
  3. It is implied not specified. It is implied so the transaction can be done reasonably quick.
    4.By creating more output addresses,
#194

  1. Describe what Unspent Transaction Outputs (UTXO) are.

    Unspent Transaction Outputs (UTXO) are the data created from a previous transaction. The sum of all the UTXO values connected to a wallet are the wallets balance. or the remaining unspent transactions outputs available for your use.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?

    The transaction will not occur because there are not enough available UTXOs to meet the minimum transaction amount requested. Amount to be sent plus transaction fee.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?

    The transaction fee is derived from the difference between the transaction input amount and the transaction outputs. Additionally, some wallets will allow a choice of a higher transaction fee to expedite the transaction speed if needed. Miners can choose to process those “priority” transactions first to increase their earnings.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?

    Increase the number of outputs to new addresses and use those receiving addresses only once. This will help obfuscate tracking transactions since addresses hold no personally identifiable information. Several outputs could be addresses you own and nobody would know.

#195

UTXOs are your balance in the bitcoin ledger. Unspent bitcoin in effect and literally too.

your transaction would not go through. it would be denied.

By looking at previous recent transactions determining a reasonable fee/time balance.

By usins more than one transaction address.

#196

  1. Your total UTXO’s are effectively the available balance of your ‘wallet’.

  2. If no single UTXO is large enough for a transaction then multiple UTXO’s will be combined to fill the transaction, any change in the transaction will be returned as a new UTXO for future transaction.

  3. The fee is determined as the difference of the inputs and the outputs.

  4. Utilising multiple inputs and multiple outputs to obfuscate a transaction.

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#197
  1. Describe what Unspent Transaction Outputs (UTXO) are.

Unspent(U) Transaction(TX) Outputs(O) are actually unspent inputs. For example if somebody sends to my wallet 0.5 Btc as long as i don’t make this as an input to send it somewhere else or part of it, this 0.5 will always stay as a UTXO in my wallet or more corectly in the blockchain

  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?

If a single UTXO is not enough to cover a transaction that i want to make, it will be combained with another of my UTXOs in my wallet and will be send out as a hole transaction. Then the reciever will recieve his amount of UTXO , another part will go to the fees for the transaction and the rest will return actually as a cash back in my wallet.

  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?

Wallets look at the previous fees in the network and calculate the transaction fee to be higher so they get in the first line of the transactions that will be validated by the miners.
Every input is equal to the output plus the fees.

  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?

As i understand the question the only way to have privacy in your transactions would be not to have a wallet that follows KYC rules. Normally when you create a bit coin wallet for example on the blockchain nobody can really know to whom this adress belongs. But because many people don’t know that and want an easy access way to their wallets they have wallets with KYC and that’s why you then have to follow the 13 round turn from wallet address to wallet address.(or else mixer)

#198

I think you misunderstood the question (like many others did)
==> ‘‘if you don’t have any SINGLE utxo’’

First it will combine multiple UTXO’s as input you control to cover it. Only if the sum of all your UTXO’s doesn’t cover the amount you want to send, the transaction will fail

#199
  1. A UTXO shows how much bitcoin is assigned to a private key as a result of a transaction.
  2. The wallet would sum up UTXOs associated with that particular private key until it covers the amount of the transaction.
  3. Fee = Input - Output (The wallet would construct the transaction including the fee).
  4. You can use multiple addresses to increase privacy.
#200

Thanks for the critique and you were right. The question could have been asked another way to find out if we students understood a single OR multiple UTXO’s are able to be used by the wallet. All in all this has been a great course. I’m enjoying it immensely. Thank you so much for taking the time to respond. :slight_smile:

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