Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#2255

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    The total of the Inputs you have not spent.

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

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Either by what was set up by the user or the wallet would pick one that would complete the transaction the fastest to get added to the Blockchain.

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

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#2256
  1. UTXOs are basically digital receipts of transactions your wallet has received, the sum is your balance.
  2. It would be declined
    3.The fee is implied based on previous fees or the difference of the transaction
  3. By being able to send to 3 out 4 of your own addresses and 1 to another without being able to tell the difference.
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#2257

1.Describe what Unspent Transaction Outputs (UTXO) are.
they are outputs of transactions that others have done to send somebody money, now that somebody can spend these UTXOs as input to new Tx.
2.What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
two UTXOs would be used as input and one of the outputs is the exchange going back to sender and would be UTXO for later Tx again.
3.How would a bitcoin wallet specify the transaction fee when creating a transaction?
by checking recent transaction fees on the blockchain estimates the appropriate amount to have reasonable speed.
4.How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
from the outputs, one can not say which one is the amount that is going back or which ones are going to be spent.

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#2258

You could just use one new address you haven’t used to send back and 1 to another :slight_smile:

#2259

!. UTXOS are outputs of other transactions that are yet to be inputs other transactions. The UTXOs then make up your balance that you can spend in future transactions.

  1. If you don’t have one single UTXO that is large enough to cover your transactions, your wallet will use multiple transactions to pay for the large transaction. The difference between the cost and the sum of the smaller transactions will be sent back to your wallet as change.

  2. Transaction fee is specified by the wallet by subtracting input from the output. The appropriate trx fee is done by the wallet based on the rate miners will accept.

  3. You can increase privacy by sending funds to multiple wallet addresses that you own and another transaction to the address that you intend to send the funds to.

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#2260

Your wallet will join multiple UTXOs into a single tx.

All this happens in the same tx, you send the funds and the change back. :slight_smile:

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#2261
  1. In a bitcoin blockchain transaction UTXOs (Unspent Transaction Outputs) are created from outputs from a prior transaction, along with the owners signature (to be considered a valid transaction), to be used as inputs for a new transaction on the blockchain.
  2. Multiple UTXOs are combined to cover the cost of the transaction plus the fee.
  3. Typically the wallet will choose an appropriate fee to get your transactions validated reasonably quickly on the blockchain as miners will choose the transactions with highest fees - it does this by checking the most recent tx fees on the blockchain.
  4. Using CoinJoin to break the common-input-ownership heuristic.
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#2262

1.UTXO is like the change of the transaction.

2.no transaction would take place.

3.the wallet ask the network for proper fee price.

4.one input can be distributed to several outputs.

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#2263
  1. UTXOs are outputs of other transactions. Then these UTXOs can be used as input in another transaction
  2. Then two or more UTXOs would be used in a transaction
  3. By monitoring recent values of transaction fees on the blockchain.
  4. You can use several different wallets that you send your money to
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#2264

1, Unspent Transaction outputs are the outputs of a transaction that are sent to your private address, the sum of which represents your balance.
2.In that case you could not complete the transaction - you would need to increase the number of your inputs.
3. A Bitcoin wallet would specify the transaction fee as the remaining inputs one the outputs have been taken.
4. You can increase privacy in your transaction by breaking down the transaction into multiple outputs to multiple addresses some of which could be your own and some of which could be the recipients. This could obscure transaction size and recipient.

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#2265
  1. A transaction that has been sent to you, but that you haven’t spent yet.
  2. You combine UTXOs to cover the transaction.
  3. The fee is the difference between the inputs and the outputs
  4. 1 of the outputs can be sent back to yourself. If you send it to another wallet, an observer can’t know that it is you.
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#2266
  1. Describe what Unspent Transaction Outputs (UTXO) are.

wallet balance

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

no transaction

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

difference of input and output

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

many addresses or outputs can originate from one input

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#2267

True, you can use coinjoin but you would require other participants to construct this transaction (or a wallet that supports this like Wasabi or Samurai). But a simple solution you can also do by yourself is to use a different address each time you receive funds :slight_smile:

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#2268

Or just different addresses in the same wallet :slight_smile:

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#2269

Not exactly. The sum of all your UTXOs is the balance. :slight_smile:

#2270

1- UTXO - is the total input. or the wallet balance.
2- means no Transaction. your wallet can’t construct the transaction. because input = output + fees
3- the fees is what the miner get, this how they get paid to place a block in a blockchain.
some wallet you can choose some not.
4- use private blockchain.

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#2271
  1. UTXOs are spent outputs from previous transactions that are used to construct new transactions.
  2. If you don’t have any single UTXO that is large enough to cover for your transaction, the transaction will be declined.
  3. A bitcoin wallet will specify the transaction fee when creating a transaction by subtracting the outputs from the inputs, it is implied.
  4. You could use the notion of transaction inputs and outputs to increase privacy in your transactions by using multiple addresses for each transaction.
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#2272

  1. UTXO is the amount received thru prior transactions, sum of all UTXO equal your wallet balance.

  2. Your wallet would draw funds from other UTXO in your wallet. If the sum of all UTXO is still not enough to cover your transaction then transaction will be denied.

  3. Input - output = fee

  4. Use various inputs and outputs

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#2273

They are input transactions that have no output transaction. In essence, a credit in your account

If you dont have a single UTXO large enough, then the transaction will fail. If however you have multiple UTXO’s then they can be grouped together to cover the transaction.

The fees will be generated (or proposed) for you. It takes more energy to spend multiple UTXO’s than it does to spend one larger amount, therefore, the transaction fee would be greater in this case

Use different addresses to send the UTXO’s back to yourself

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#2274
  1. transactions left in your wallet to spend.
  2. The transction would not be validated on the blockchain.
  3. It would take the total input=output+fee, generated automatically
  4. Many various addressess are generated for each transaction therefore making it impossible to identify the wallet private key.
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