Homework on Bitcoin Transactions and UTXO - Questions

[Alko89]

Yes, but if someone knows your address means that he track how much money you have.

[Borucki]

1. UTXO’s are the inputs going into a wallet to tell the wallet how many btc the wallet has to spend.

2. You would need to use more utxo’s to get above the amount you want to spend. Your wallet would then get the change back for the difference in the transaction.

3. The fee will be built into the transaction equation by fee = inputs - outputs. The difference in inputs and outputs is the fee amount.

4. As the inputs and outputs of your transaction are only labeled by the wallet codes, no one knows who those wallets belong to.

[bertrand282]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   They are all the transactions received still available to spend.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   You would need to use more than one UTXO if available, else the transaction cannot be completed.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   It is implied, fee = input - output

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   by using more than one output address with one output address be one of yours.

[ArgenFrank]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXOs are all those spent tx in the blockchain, which are then turned into new inputs for new Tx’s
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   If you dont have the necessary amount of “COIN” available in one UTXO, then your wallet will use as many UTXOs available as to reach the Tx amount +fee.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   UTXO input-UTXO output =fee
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   Using different addresses when receiving smth

[deficrypto]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXOs are basically the Bitcoin addresses with a balance currently on them (unspent)

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   If you dont have a single UTXO with a large enough balance to cover the cost of the transaction, it will pull from other UTXO addresses.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   The fee will be implied and taken from what remains on the UTXO address.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   Never reuse a Bitcoin address.

[victoriachua]

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

Basically it is the amount of money available in the wallet to spend. this amount of money can act as “output” in the wallet and has not been channeled to any expenditure yet, That’s why it is called “unspent”.
It represents the amount of money the wallet receives as inputs through other sources.

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 take place as the wallet will need to verify the validity of this transaction before it can be added to eh blockchain through consensus.

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

The difference between the input transaction value and output transaction value. However, in some cases, it is also explicitly stated in the blockchain.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
To have multiple inputs and multiple outputs from/to different addresses.

[Alko89]

@ArgenFrank

UTXOs are all those spent tx in the blockchain, which are then turned into new inputs for new Tx’s

From the rest of your answers I think you understand, but just to make sure
UTXOs are Unspent TX Outputs, so they are not yet spent. But can be used as an input to a new tx.

[AsHappyAslarry]

• Describe what Unspent Transaction Outputs (UTXO) are.
  UTXOs are the unspent transactions, if you look in your wallet you will see the unspent transactions belonging to you, ie how much bitcoin you have to spend.
• What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  All UTXOs are spent in each transaction, so the only thing that is important is that you have enough altogether to cover the transaction and fee.
• How would a bitcoin wallet specify the transaction fee when creating a transaction?
  The fee is = the input-output
• How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  you could create different addresses so that even if a UTXO is sent back to you it ends up at a different address but one you still own in your wallet.

[explorergeek]

1. UTXO’s are amounts of bitcoin or other coins that you receive from others that have not been spent yet.

2. If you don’t have any single UTXO that is large enough to cover a transaction, you can use multiple UTXo’s then send the remainder amount to yourself less a fee. If you don’t have multiple UTXO’s that are large enough then you can not proceed with the transaction.

3. A bitcoin wallet usually looks at the previous fees that were charged on the blockchain and charge your the average of the fees. Some wallets also give you the chance to choose your own fee amount.

4. By creating multiple addresses? I am not sure on this one.

[Alko89]

@AsHappyAslarry

All UTXOs are spent in each transaction, so the only thing that is important is that you have enough altogether to cover the transaction and fee.

Not all have to be spent at once, you can use just enough UTXOs to cover the transaction

[Alko89]

@explorergeek

By creating multiple addresses?

Correct, using a new address each time you receive funds will make it harder for someone to monitor your balance

[sharkycryptoninja]

1. UTXO’s are all the individual bitcoin transactions that are sent to your wallet address that have not been spent or sent to another address.

2. Your wallet will automatically sum all of the UTXO’s that are associated with your wallet address in order to cover the full transaction balance. It will actually send the full balance of the wallet to cover the transaction and then send the remaining balance back to itself as a new UTXO.

3. The the transaction fee is calculated by the UTXO input - UTXO output. Wallets will automatically calculate what a good fee would be in order to be picked up sent by miners, but some wallets allow users to specify the fees they are willing to pay.

4. You can create several bitcoin addresses and increase the number of outputs for your transaction. If you increase the number of UTXO outputs and route some of them to addresses that you control, it would be difficult to determine the total value of your BTC holdings.

[matty.t]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   Unspent transaction outputs are the unspent money that you can spend.

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

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

It will calculate your input minus your output to figure out the transaction fee.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   You can send transactions to multiple addresses and one of them could be yours but no one will know.

[lopotras]

1. UTXOs are funds transferred to an address that have not yet been used in another transaction. The sum of all of them together creates the ‘account balance’ of an address.

2. More UTXOs would be chosen that together sum up to the necessary amount. Any excess would be sent back to the original address.

3. It would choose the fee based on the recent fees in the blockchain. The size of the fee is estimated to get the transaction to the blockchain in a reasonable time.

4. Looking at a transaction itself it is not possible to know who the input and output addresses belong to. Therefore using the blockchain for transferring value adds to the privacy of the transaction.

[Alko89]

@lopotras

Looking at a transaction itself it is not possible to know who the input and output addresses belong to.

What about if you withdraw funds from an exchange where you did KYC?

[Ben_Swenson]

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

UTXOs are quantities of bitcoin that have been sent on the blockchain and are now available to your private keys as bitcoin that your private keys are able to spend.

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

The wallet will use multiple UTXOs to cover the amount in the transaction and then the leftover amount will be another output that is returned to your wallet.

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

When creating a transaction your wallet will analyze the blockchain, will identify the most recent fees paid for transactions, and then the wallet will propose a fee so that your desired transaction will get accepted by the miners and get added to the blockchain in a reasonable amount of time. The actual amount of the fee would be the difference between the input amount and the output amount.

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

The quantity of outputs for example could go to many different wallets owned by many different people, or it could go to many different wallets owned by one or just a few people. The privacy of someone’s actual control over a quantity of bitcoin could be made private because they could make a transaction that sends outputs to more than one wallet.

[Mr.ed]

1.Describe what Unspent Transaction Outputs (UTXO) are.
UTXO is where it show you the amount in your wallet so you can spend

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

3.How would a bitcoin wallet specify the transaction fee when creating a transaction?
Transaction fee is figured out from subtracting input minus output

4.How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
By creating more output addresses.

[Kanwarjit]

UTXOs are unspent transaction output of previous transactions.

Two UTXOs will be used to pay for the transactions and the left over UTXO will be returned back to the wallet.**

Bitcoin wallet will look up the blockchain and recommend the transaction fee.

By increasing the number of outputs and sending it to multiple addresses.

[Ballantines]

1. In a Bitcoin network context, UTXOs are BTCs you have available to spend as calculated from the network ledger by your wallet.

2. The transaction will be refused.

3. Remembering that fees = UTXOs - Inputs, you have to enough to pay for the transaction fee. If you do, the wallet proposes a fee by querying the network and looking the recent transaction fees. The proposed fee is usually one that will get your transaction on the blockchain “fast enough”. However some wallets will also allow you to manually choose a fee.

4. We know that a transaction is NOT just a 1 on 1 ratio input-output transaction but instead a single transaction can contain multiple inputs & multiple outputs. So again, while it is possible to see the transaction details & addresses involved on the block explorer you can’t really say whether outputs got back to the same person to another wallet address.

[horchaiza]

• Describe what Unspent Transaction Outputs (UTXO) are.
  Confirmed transactions from which you received bitcoin and have remaining an unspent amount; this is what a bitcoin wallet tracks.

• What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  Transaction will not be confirmed.

• How would a bitcoin wallet specify the transaction fee when creating a transaction? This is a fee automatically generated per transaction and can be calculated by taking the difference between the input and output.

• How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? Privacy can be increased by using different output addresses during a transaction.