Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#2235

That makes your data connectable to your blockchain address. In that case it’s also still traceable if you send your funds further to multiple new addresses - they’re all connected to the withdrawal.

To achieve total privacy I believe you would have to buy btc in person for cash and have it sent to a newly generated address. In that case it’s still a risk that the seller’s address is connected to his personal information and in case of a thorough investigation he can be traced and disclose information about you.

Theoretically another option could be also to pay someone (for example a homeless person) to complete the KYC on the exchange in their name and let you use the account.

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#2236
  1. Sum of UTXO’s is the wallet balance, each UTXO is an output of the previous transaction.
  2. The transaction would fail.
  3. The inputs minus the outputs = the transaction fee. Wallet will automatically calculate this.
  4. Use a private blockchain or could also send to different addresses you control.
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#2237
  1. UTXO’s in short is the total balance available to spend. Its the amount you are able to spend.
  2. If you dont have enough UTXO to cover for a transaction, the blockchain wont allow the transaction to be confirmed.
  3. Your Bitcoin wallet seeks for a reasonable transaction fee and applies it to your transaction. Your UTXO must be big enough to cover this fee as well.
  4. To increase privacy within transactions, you can simply use different wallet address to send/receive bitcoin. Doing so adds anonymity.
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#2238

  1. UTXO is bitcoin that you have received and not have not sent out yet.

  2. The wallet will add up the other available UTXO to cover the transaction.

  3. Input - Outputs = TX Fee

  4. One transaction can send to multiple addresses, including some of your own.

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#2239

Q).Describe what Unspent Transaction Outputs (UTXO) are.
A). UTXO stands for the unspent output from bitcoin transactions. Each bitcoin transaction begins with coins used to balance the ledger.

Q). What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
a). if no balance to cover transaction thenno transaction is possible. (i.e NO UTXO BTC = NO TRANSACTION)

Q). How would a bitcoin wallet specify the transaction fee when creating a transaction?
A). INPUT - OUTPUT = FEE

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

A). IN MY HUMBLE OPINION ONE CAN AND SHOULD USE MORE THAN ONE WALLET/ADDRESS IT IS ALWAYS GOOD TO INCLUDE YOURSELF IN THE OUT PUT TRANSACTIONS TO BALANCE THE WALLET(S)/TRANSACTIONS, iT ALSO PROVIDES GREATER TRANSACTIONAL ANONYMITY).

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#2240
  1. It is like promissory bill who allows me to spend the amount of bitcoin I received.
  2. If have have a lot of them, they get calculated from my wallet. I f I don’t have enough, my transaction is not made.
  3. It gets it from the blockchain.
  4. Several addresses and outputs can result from one input.
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#2241

hmmm :thinking: these are actually interesting ideas. But if you use a new address to get the change after you send the funds to someone else it is impossible to know which part of the output went to another person and which went back to you as change, thus making tracing more difficult :slight_smile:

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#2242

I agree, especially if the aim is only to hide your balance. This way depends also a lot on the privacy of the other address.

If you want to spend this money afterwards and the output of the transaction is connectable to you (i.e. you get yourself a new car) it is still relatively easy to trace it back.

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#2243

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    A UTXO is the change you recieve back from a transaction and how Bitcoin resolves wallet balances

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    The transaction will take from another UTXO as well as the first one, and change will be deposited in your wallet as a new UTXO

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Input = Output + TxFee

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Sending your BTC to several addresses that you own

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#2244

  1. UTXOs are the input that has been sent to a particular wallet and remained unspent. The wallet tracks the UTXO from the blockchain.

  2. Once a wallet does not have enough UTXO to spend, the transaction will not be allowed to take action by other nodes.

  3. Bitcoin wallet specify the transaction fee by checking the blockchain and giving the best fee that takes the wallet to the blockchain.

  4. ---------- I don’t understand this question at all and checking answers from others, i do not agree with most of the answers

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#2245

1: An unspent transaction output is a transaction that has been added to your wallet. All of your utxo’s together make up the total balance of your wallet.
2: Your wallet would use your other utxo’s to attempt to meet the transaction. If the total output was higher than all of your utxo’s combined then the transaction would decline.If the total output was less then all of your utxo’s then the the transaction would be confirmed.
3: A bitcoin wallet specifies the transaction fee on transactions by querying the blockchain and seeing what a good transaction fee would be. Some wallets let you specify your own transaction fee. The total fee would be the difference between the input and output.
4: You can send bitcoin to multiple non-attributable wallets. Some of these wallets can be your own.

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#2246

The Bitcoin blockchain is pseudo anonymous, meaning that while there are only addresses on there, one can connect a physical person to that address, thus breaking the privacy aspect for that person. To mitigate this it is recommended to use a different address each time you receive funds. :slight_smile:

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#2247

Why not just use different addresses? :slight_smile:

#2248

For privacy reasons (as asked in the question) and simplicity reasons you’re quite right. You can just use a different address.

But I’m a pen tester, which is a white hat hacker. It’s twice as hard to hack two different brands of wallet than it is one. So for me it would be different wallets.

Even though security wasn’t part of the question.

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#2249 
1. Describe what Unspent Transaction Outputs (UTXO) are.

They are transactions that havent been spent, in a way that they are still “pointing to your wallet”

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

in that case, you would have to add up several UTXO until the amount is neough to cover the transcation volume

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

Its still not clear to me… my answer here comes from my experience sending BTC from different wallets or applications. It seems to me that it is the wallet or the app that Im using in the moment to make that transaction that decides what is the fee, but I dont know where does this fee goes… If its to the wallet or app developer?? I dont know still

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

mmmmmm… I dont get this one

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#2250

1.- An UTXO is every transaction that has been sent to you and you have not spent it yet.
2.- The wallet will use as many UTXO as needed to fulfill the amount required for the transaction
3.- The Wallet will verify on the blockchain the previous fee transaction in order to propose a fee that can get this transaction faster into the blockchain
4.- You can have different addresses. More outputs

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#2251

Yes, most wallets will choose the fee for you. But on the blockchain this is seen as the difference between inputs and outputs (input - output = fee).

You can use a different address every time you receive funds. Because in case that someone knows one of your addresses, one still can’t create a full picture of how much money you have. :slight_smile:

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#2252
  1. unspent transactions belong to my wallet
  2. transaction will fail
  3. Unspent transactions minus spent transactions = fee, is done automatically
  4. using multiple addresses
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#2253
  1. Unspent Transaction Outputs. These are the transactions in your wallet. The value that is still unspent is what you have to spend in the future.
    2.Multiple UTXOs are combined to get to the amount you want for the transaction.
  2. Some wallets allow the user to select the transaction fee but the wallet usually goes out to the network to see what fees are being paid so a transaction fee high enough will be used to get the transaction picked up by the miners.
  3. You can use new addresses to send the transactions. You can also mix in multiple transactions so that it is not obvious what transaction in being spent…
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#2254

  1. UTXOs are basically outputs that are waiting to become inputs of another transaction.

  2. If you don’t have one single UTXO that can cover a transaction, then it will combine various UTXOs to cover it.

  3. The transaction fee is specified by the wallet by subtracting the Outputs from the inputs.

  4. You can increase privacy by utilizing more inputs and outputs in the transaction.

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