Homework on Bitcoin Transactions and UTXO - Questions

[Mechman]

1. A received/input transaction yet not spent is a UTXO.
2. I would need to spend two other or more transactions to cover for my spending, pay the fees, and send the remainder back to myself.
3. Total input minus total output is the fees.
4. I can generate a new address every time to send the remainder back to myself, and make tracking difficult.

[LTL]

1. Amount of coins that are available to be spent and recorded on the blockchain.
2. The transaction wont be confirmed.
3. input - output.
4. One or more of the output addresses are to yourself.

[VICBTC]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   they are transactions that sit in your wallet either from a previous transaction or a trade
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   there for you could not process the transaction through the blockchain due to it being invalid
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   the fee is implied rather than specified and the transaction is then executed
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   by generating an output address which is different each time so it is not linked

[Lilian]

1. UTXOs are the unspent transactions that you receive in your wallet, before to they are converted to inputs.

2. You have to have enough UTXO to be able to to do a transaction equal to the input/including transaction fee or less than the input

3. The bitcoin wallet calculates the transaction fee by subtracting the output from the input

4. When you send a transaction to another wallet, your private key is not shared to that wallet, your wallet communicates with the network to send the transaction without sharing the private key.

[manonYm]

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

UTXO’s are the transactions received in your wallet, every transaction counts as one UTXO, they will not merge and will always stay individual as received by the wallet from the Blockchain.
The total of all UTXO combined shows your wallet balance.

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

If there are more than one UTXO’s they will add up to satisfy the demand, if there is just one UTXO which cannot cover the demand, there will be no transaction.

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

The bitcoin wallet specifies the transaction fee when creating a transaction by subtracting the input from the output.

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

Use a different addresses/wallets and don’t keep everything in one address.

[andrewb]

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

UTXOs are the blockchains record of all inputs made to any particular private key. These inputs are Un-spent TX (transactions) that have been sent to a private key representing an input or multiple inputs sum total value that is ready to be spent as an output.

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

The wallet will ask the blockchain to show it all inputs (UTXOs)to the private key and then it will add multiple inputs (UTXOs) together that will cover the transaction amount and any extra is sent back to your wallet minus the fee which is the difference between the inputs and the outputs.

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

The fee is specified as the difference between the inputs and the outputs within the transaction.

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

The idea would be that anyone looking at the blockchain would not be able to decipher between which of the output addresses are the address of the recipient/s and the output address which represents the difference of the total sum of all UTXOs being used, minus the actual value of the requested transaction being made being sent back.

[Alko89]

@write2tapas

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

How would you reveal the name in the transaction? Not sure what you mean

[Alko89]

@karloz

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

What if someone knows your public key? For example an exchange where you did KYC?

[Alko89]

@Ricardo_Okazawa

your balance is zero

It is not zero, one can have multiple UTXOs to spend

[Alko89]

@rhotoshi

Send multiple outputs to a single address first.

That would be expensive. Why not just use those outputs to send to the receiver and change back?

[Alko89]

@Lilian

When you send a transaction to another wallet, your private key is not shared to that wallet, your wallet communicates with the network to send the transaction without sharing the private key.

This is true, obviously you should never share the private key. But what about your public key that is visible?

[rhotoshi]

adding a new address step would increase privacy?

[Alko89]

Yes, but you don’t need to send everything to that address first, you can just send the change back to it

[TudorGadea]

1. they are unspent inputs that were sent to your wallet. your wallet sees that as available balance.
2. If you have enough funds to cover it your wallet will choose the way that your UTXO’s are being spent, it also checks if your total unspent inputs are greater than your transaction plus the fee.
3. your wallet checks on the blockchain the last few transaction fees and deduces it, some wallets recommend you the fee while others can be adjusted by you.
4. use different addresses when sending your transactions.

[karloz]

The public key doesn’t reveal any of your personal information.So still you are safe and private .
The public key works as an “address” or “account number” to give to people who’s what to send bitcoins to you. The private key doesn’t reveal any of your personal information either. The difference is that the personal key is your “password” to your “account” and the public key is your “account number” in banking terms.
Thanks for make me do my point more clear. ( I hope )

[RARA1208]

1.an unspent transaction output (UTXO) refers to a transaction output that can be used as input in a new transaction.In essence.UTXOS define where each blockchain transaction starts and finishes.The UTXO model is a fundemental element of bitcoin and many other cryptocurrencies .

2.if a single UTXO isnt large enough to satisfy the demand of the input amount , then the wallet will use a second ,a third ,ect until the total is greater than or equal to the amount your sending.

3.A bitcoin wallet will check with the blockchain and propose a fee that would get the transaction into the blockchain in a reasonable time

4.transaction can have multiple inputs and outputs ,you could use different wallet adreses for your transaction.

[Bamse1975]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   These are unspent bitcoins that are controlled by the wallet (private key), it’s in other words your present balance.

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 be processed because the input must be equal to the output. You have insufficient funds and your transaction won’t go through.

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

The transaction fee is generated by subtracting the present input from the output → TX fee = inputs - outputs

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

You could send a transaction to multiple wallets. Some may be in your control as well. To have multiple wallets can be compared to having several identities.

[write2tapas]

I meant to say, in current notion of transaction, only input and output wallet addresses are shown, not the identity or name of the address owners. Hence looking at the transaction nobody can guess who are the owners of the wallet addresses. This is how privacy is increased.

[Alko89]

@write2tapas

Hence looking at the transaction nobody can guess who are the owners of the wallet addresses. This is how privacy is increased.

Ok, but what if you withdraw from an exchange where you did KYC?

[jaythesky]

Homework on Bitcoin Transactions and UTXO - Questions

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXOs are spendable transactions in a blockchain database.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   The transaction won’t go through because you need to have the same balance for both inputs and outputs. In this case, use more than one UTXO.
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?
   Groups multiple transactions of inputs and outputs before your transaction. I think a dapp called wasabi wallet create multiple transactions with multiple anonymous inputs and outputs help increase privacy.