Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#2012

1.Describe what Unspent Transaction Outputs (UTXO) are.
It is the output of the send transaction.i.e. it is the amount of crypto currency that you receive from each transaction.

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

3.How would a bitcoin wallet specify the transaction fee when creating a transaction?
Inputs = Outputs+Transaction fees

4.How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
output can be send to different addresses , and nobody knows which address is someone else, and which one is mine, if it is.

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#2013

  1. Outputs of transactions received and still not used.

  2. If the private key has enough UTXO to sign, the wallet will sum up all your UTXO as inputs, cover for the transaction and give back the change minus the fees as outputs.

  3. Fee = sum(Inputs) - sum(Outputs)

  4. The more outputs there are the harder it gets to tell which address belongs to who.

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#2014

  1. Your wallet scans the blockchain for your “UTXO” and lets you know your available balance to spend. It uses your private key to do this.

  2. If all UTXO available are not enough to pay then it would then become in invalid transaction.

  3. It would specify the fee by taking the difference of the transaction Input vs Output.

  4. Use multiple wallet addresses

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#2015

  1. UTXOs are transactions that are used to determine your wallets balance and they dictate how much btc is sent to which address(es).

  2. The transaction will fail and will not get sent to the blockchain.

  3. A wallet specifies the transaction fee by the outputs of the transaction - the total of all inputs minus all outputs on a transaction will dictate the transaction fee.

  4. You can send a transaction to multiple wallets which may or may not be controlled by you to increase privacy.

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#2016

Why not use multiple addresses in a wallet? :slight_smile:

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#2017

UTXOs are the sum of the inputs into a Bitcoin transaction.

The transaction would not be approved by nodes in the network.

The transaction fee is implied, and is simply the UTXOs minus the spent Bitcoin. The remainder is the fee.

You could send Bitcoin back to yourself, in change address multiple times to increase privacy.

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#2018
  • Describe what Unspent Transaction Outputs (UTXO) are.

UTXO are transactions sent to a wallet that have not been spent

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

in this instance multiple UTXOs will be added to the transaction until the sum of the UTXO is equal to or larger than the transaction

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#2019

  1. UTXOs are transactions with income, we didn’t used yet.

  2. My wallet will sum up all UTXOs it needs for sum of TX and fee. If it is more than needed, it will send the rest to my own address.

  3. It checks values of recent fees and calculate one so it will be able to make accounting reasonably fast.

  4. I can send my coins to somebody and at the same time to other of my addresses

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#2020

Unspent Transaction Outputs are basically what your wallet perceives as your spendable balance.
If there is not a single UTXO large enough to cover a particular transaction, the wallet will combine multiple UTXOs that will sufficiently cover the transaction.Additionally, the wallet will query the blockchain and suggest a fee that will get your transaction into the blockchain reasonably quickly, subtract that fee from the the UTXOs and also send your “change” back to your wallet or another wallet you control in the form of new UTXOs. Also more functional wallets allow the user to designate the transaction fee.
Transaction inputs and outputs can be structured by the user to send transactions to other addresses the user may control, therefore obfuscating the transaction, as only the holder of these private keys knows the true recipient of the UTXO’s

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#2021
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are transactions that you have received in the past. The sum of the UTXOs that can be spent with your private key is the balance of all BTC you own.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    It means you don’t have sufficient funds to make the desired transaction, and the transaction will be refused by the nodes it is sent to.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    A UTXO needs to be spent entirely. A transaction will be a fraction of the content of the UTXO. The transaction fee can be calculated by subtraction of the output by the input. The wallet will specify the amount of BTC to be transfered back to the sender. The difference between output and input will be the transaction fee.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Only the owner of the private keys knows the identity of the owner of the public key it sends BTC to. This address can also be owned by the original sender. There is no way to know, unless the address interacts with an on- or off-ramp with the fiat system, where KYC is mandated.
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#2022

How would you mitigate the invasion of your privacy in case you do have to withdraw funds from an exchange where you made KYC? :slight_smile:

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#2023

1.) UTXO’s are incoming transactions into my wallet which the wallet reads to get your wallet’s balance.

2.) (Depending on the wording in the question, any “single” transaction but what if I have multiple UTXO’s?)
a.) You would not to be able to complete the transaction if you didn’t have enough UTXO’s to cover the transaction. or b.) Your wallet can also use other UTXO’s together to complete the transaction.

3.) The BTC wallet would look at the blockchain and the fees being paid through the last few transactions and create a fee that will insure the transaction to go through.

4.) use one or various inputs to various different outputs.

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#2024
  1. Describe what Unspent Transaction Outputs (UTXO) are.

An UTXO is an output from another transaction that hasn’t been spent so it is available for the owner to spend it in any time.

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

The wallets helps us to sum up all the UTXOs, if we have enought to cover the transaction + fee then miners can successfuly validate the transaction, otherwise miners will reject the transaction.

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

The wallet verifies previous transaction fees and then proposes a transaction fee that can get done fast enough by the Bitcion network

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

By creating multiple output addresses in the transaction to increase the privacy

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#2025

  1. UTXO is an unspend transaction that your wallet is able to spend in the future. The balance of a wallet is calculated by adding all UTXOs together. In that sense a wallet never holds any real “balance”, it just holds unspend stransactions that it has the right to spend in the future.

  2. It has to combine UTXOs in a way that they cover the balance of the outgoing transactions.

  3. The TX is calculated automatically from the data of the blockchain. The wallet checks previously paid TX and calculates the sum that it thinks that will be enough for the new transaction will be mined. Some wallet also have the feature in with you can adjust the TX.

  4. More privacy can be achieved by adding multiple outputs in to one transactions.

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#2026
  1. its your money you have ready to be spend whit your PK.
  2. The transaction would be cancelled
  3. wallet calculates the fee by Input minus output.
  4. Create several outputs addresses, so it would be very difficult to see if someone looking at the TX how much has been send to a friend or/and back to you. Now i understand more what happen to Mark Karpeles hack attack.
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#2027

  1. UTXOs are inputs from previous Transaction to a private key which are not spent yet. It is recoreded is blockchain and a wallet, which holds the private key, can communicate to the blockchain and know which are the unspent transactions available for a private key to spent.

  2. If a single UTXO is not large enough to cover a new Transaction, then the wallet will construct a transaction with multiple UTXOs as input.

  3. Bitcoin wallet will select the single or multiple UTXOs, sufficient enough to cover new transaction, as input and specify amount to be sent to the recipients including amount to be returned to the sender. the difference between the sum of inputs and sum of outputs will be considered as transaction fee.

  4. By using only wallet address of sender and receiver instead of revealing their names as input and output.

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#2028

  1. Unspent transaction outputs are the " payments" or bitcoins you send to someone or back to yourself.

  2. The wallet will sum up all your inputs to cover the amount you need for your UTOX and the reminder you can take it back to yourself.

  3. The transaction fee is the difference between inputs and outputs.

  4. Whit the private key. Every sender and recipient has their own private key, in that way nobody knows the identity of the sender or recipient.

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#2029
  1. it means the total of coin that you can spend
  2. your balance is zero, you can not spend any coin
  3. the difference between input and output
  4. there several inputs and outputs and it is impossible to figure out who is sending or receiveing the transaction
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#2030
  1. Your wallet’s UTXOs are outputs received from other wallets that have not yet been sent to addresses associated with yet other wallets
  2. Send multiple outputs to a single address first. Then send the amount to recipient with difference coming back to your address.
  3. fee = inputs-outputs
  4. never receive utxos to the same address, never send utxos from the same address
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#2031

  1. UTXOs are unspent and available bitcoin.

  2. The wallet would efficiently combine UTXOs to cover the transaction and request back the appropriate change.

  3. The difference between transaction inputs and transaction outputs.

  4. Utilizing multiple outputs to multiple wallets can make it difficult for someone to track the transactions.

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