Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#2335

  1. UTXO are received inputs which have not been spent of allocated to anyone.

  2. If your UTXO is insufficient there will be not transferal of assets.

  3. Transaction fee will be specified as a result of the input minus the output.

  4. Transaction privacy is increased by using different addresses to accumulate funds.

#2336

  1. UTXO is the amount that it’s in my wallet to spend. (the sum comes from previous transactions)

  2. If IO didn’t have a single UTXO. Some individual amounts would combine and change would be sent back like when I hand over two $20 bills for a $35 bottle wine.

  3. The bitcoin wallet doesn’t usually specify the transaction fee but it can be calculated as the input subtracted from output.

  4. Creating several or more different transaction inputs & outputs will make a longer paper trail, but if someone really wanted the info they could follow you

1 Like
#2337
  1. Inputs that you have received in your bitcoin wallet.
  2. The transaction would not be valid
  3. The wallet would calculate the fee.
  4. Multiple inputs can be used to create multiple outputs.
1 Like
#2338
  1. UTXOS is basically your money but unspent.
  2. if you dont have a single UTXO to cover the transaction then nothing would happen
  3. It does this by taking the input and subtracting it from the output.
  4. One person can have multiple Inputs and outputs
1 Like
#2339
  1. UTXO is one or multiple outputs you have received that are now able to be spent independently or pooled together as a new input.
  2. You can pool together to reach desired amount and then give yourself change if need be
  3. The wallet doesn’t specify. It traditionally is the total input - total output
  4. No one can see exactly where the money is going to or know how much you actually own at one time
1 Like
#2340

  1. UTXO’s are the inputs of a transaction (received transactions) which are stored on the blockchain.

  2. The wallet will actually send 2 or more inputs into the transaction to fill the amount, once the input is spent the balance will be a new UTXO back to the wallet address.

  3. Blockchain itself offers a reasonable price for the transaction based on the amount of transfer, you can also set the fee manually to make the transaction go through faster cause the miners prioritise transactions that has higher fees.

  4. Creating few different addresses will make it much more private, there are also wallets which change your address once in a while(every hour for example) for more security. However you still have access to previous addresses.

1 Like
#2341

  1. UTXOs are outputs of previous transactions which went to your wallet that haven’t been spent yet. The sum of the UTXOs is the wallet’s balance. Your wallet collects the UTXOs as inputs to the transaction it constructs.

  2. Your wallet would not be able to construct the transaction.

  3. A Bitcoin wallet looks for past fees and, based on them, comes up with a fee which would result in the transaction being executed in a reasonable timeframe.

  4. A number of input transactions can branch out to multiple outputs (new wallet addresses, which might still belong to yourself).

1 Like
#2342

If you don’t have a single UTXO big enough, you can always combine multiple smaller utxo’s together to cover the amount and send the change back to another address of yours.

Many people mis interpret this question.
Only if the sum of all your available utxo’s aren’t enough to cover for your transaction, the transaction will not be valid to broadcast

2 Likes
#2343
  1. A UTXO is an Unspent Transaction Output. Its your balance based upon the outputs of the transaction that sent you the bitcoin.
  2. In this case your wallet would combine UTXO balances to create enough for the transaction. The total amount would have ro be sent to the amount for the transaction plus fees with the remaining balance as a transaction back to you
  3. The fee is based upon the remainder of all inputs minus all outputs
  4. You can use several addresses when receiving
1 Like
#2345

Second question edit! Misunderstood the question.

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

When you receive funds, you receive an output of a transaction, to you that’s an unspent transaction output (UTXO), which means that you have outputs of a transaction that you have the right to use as an input, when you want to send bitcoin.

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

If you have a combined worth of UTXO:s that is large enough you can use as many as you need and create a new UTXO with the remaining amount that you can send back to yourself.

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

It doesn’t, but it could easily be calculated by subtracting the outputs from the inputs.

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

You can have several addresses within your wallet and change them now and then. From the outside you can only see that funds have been moved to new addresses but there is now way to see how much you’ve kept.

1 Like
#2346

Homework on Bitcoin Transactions and UTXO - Answers

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

A UTXO is the total of your transaction outputs (amounts you recieved from other wallets) which gives you the balance that you can use as new inputs (or amount you have available to spend) for new transactions.

  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? Your wallet will pool together multiple UTXOs that you have available to cover the cost of the transaction and send the change back to you.

  2. How would a bitcoin wallet specify the transaction fee when creating a transaction? The transaction fee is the difference between the input minus the output.

  3. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? Inputs can have multiple outputs in a transaction that can’t be traced to the person receiving the output. This makes the transaction private in the sense that the receivers of the outputs can’t be identified.

2 Likes
#2347

What if you withdraw from an address where you did KYC? :wink:

#2348

Don’t know of a wallet that does that. Most modern wallets are HD (hierarchical deterministic) wallets and generate a new address each time you want to receive funds. :slight_smile:

#2349

thats right, I used to have a BTC.COM wallet and it would automatically generate a new address every 30 minutes. Maybe they have updated it as well.

#2350

Ahh, that is a hosted wallet, I never used them (except on exchanges) and never bothered to check how often they change the address. :stuck_out_tongue:

2 Likes
#2351

haha
I used it for a while. BTW just wanted to say thanks for all the time you guys are putting here, it’s beautiful.

1 Like
#2352

Thanks I appreciate the feedback :slight_smile:

2 Likes
#2353
  1. Output is a value data to be distributed and confirmed for a blockchain transaction.
    2.in this case, there will be a combination of UTXO to ensure the transaction is covered. This will result in multiple outputs, even if returned to you.
    3.The wallet will automatically calculate the difference between all UTXOs.
  2. Use multiple inputs and outputs while letting one of the outputs be returned to you.
1 Like
#2354
  1. UTXO are output from previous transactions. Total of UTXO give me balance of my wallet.
  2. Wallet will use another UTXO`s to make sume large enough to cover transaction and transaction fee.
  3. Wallet will check blockchain to find recent fees and then determine reasonable fee to process transaction in reasonable time. Some Bitcoin wallets allow to set fee manually by user.
  4. Use new address for every transaction, or ( and ) multiple output addresses.
1 Like
#2355

  1. UTXOs are coins that have been received. When the wallet adds them all together it will show a total balance available in coins. I am not sure if coins other than BTC work this way.

  2. Then the wallet would select UTXOs and add them up together until the sum of the UTXOs are sufficient to cover the transaction or greater than the transaction. Then the transaction could go ahead and any excess left over in the sum of all the UTXOs could be sent to an address control by your wallet, less some BTC for transaction (Tx) fees.

  3. The wallet will suggest a fee depending of blockchain activity. It will suggest a higher fee if speed is desired and a lower fee if economy is more important. But it must use the inputs and outputs of the transaction and not exceed the total UTXOs used as inputs. So the outputs plus the fees = total inputs.

  4. A person could create a transaction where they send BTC from an address that my be noteworthy to several new and unknown addresses. These new addresses can be owned by the same person. So actually the person is sending money from ONE of his addresses and splitting it into MANY of his addresses. So the owner of the BTC would be less transparent, and also the amount of BTC possessed would also be less readily determined.

1 Like