Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#221

  1. UTXO’s are the incoming ( input) tx to my wallet; sort of balance of a wallet. Available balance so one can make spendings out (output) of it.

  2. First it will try to find another sufficient UTXO’ s to cover your Tx otherwise it would not go through, therefore would be declined.

  3. Wallet would look at the previous tx in the blockchain to calculate the fee to be able to make the tx fast enough and it always as follows;Output sum + Fee = input sum. In some wallets you can adjust the tx fee by slowing down the tx.

  4. We can generate more addresses for each tx and send the sum to these new addresses for your security. It is harder to trace but not impossible. So you would have outputs coming back to you as input’s (UTXO’s).

#222
  1. The total amount of unspent transactions that have been sent to you.
    2.can’t spend unless you have enough utxos (earn more)
  2. utxo - utxo input = fee
#223

They are inputs that you have not spent. The balance you see in your wallet
no transaction accepted.
wallet check what fee will work
not sure about privavcy

#224
  1. The wallet does not store coins, but it stores the different unspent transactions.
  2. The transaction would be declined.
  3. Most of them suggest a transaction fee, which is added to the total transaction amount.
  4. You can generate more private keys for your transactions, which will increase privacy.
#225

Many students misunderstood the question.
First it will combine multiple UTXO’S to use as inputs.
only when the sum of all your available utxo’s doesn’t cover the amount, the transaction will be rejected (not valid)

#226

Describe what Unspent Transaction Outputs (UTXO) are:
The total amount of UTXO is your bitcoin balance.

What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
You would need to add up all of your UTXOs, and send the needed amount to the person and the remaining amount back to yourself.

How would a bitcoin wallet specify the transaction fee when creating a transaction?
The input minus the output

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
By using different addresses when receiving bitcoin.

#227

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    the name means unspent transaction output and it’s the available balance of bitcoin that the owner has access to

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

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    there’s no need to specify the fee since it’s easily calculated

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    by using multiple addresses with small balances

#228

Homework on Bitcoin Transactions and UTXO - Questions

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

The BTC that is in your Bitcoin address and not used as input is called the unspent transaction output (UTXO). It is an output that you have received and can spend.

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

Your wallet will merge several utxo until the desired amount is reached.

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

A bitcoin wallet will recommend a reasonable fee, based on the current and previous transactions fees on the blockchain

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

By creating multiple output addresses.

#229

1.UTXO are unspent transactions and if you add all your utxo in your wallt you will get your wallet balance
2.it will just add all your smaller utxo untill it becomse large enough to make the transaction or if you try to spend utxo that not yours it will never be verifid by the network
3.it look to the previous fees and then calculate the fees recomended so your transaction can be accepted into the blockchain as quick ass possibell
4.by sending a bigger amount then is needed for the transaction so that you can send the remaining balance to your self butt in a new wallet

#230
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • Funds in available to unlock with the private keys in the wallet
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • transaction is not confirmed by miner nodes as input < output which leaves nothing in fee.
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • the wallet estimates from previous transactions.
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • use all inputs available
  • send to one real out put and then the rest to a number of own addresses
#231
  1. Wallet balance.
  2. Fail
  3. UTXO minus UTXO input = fee
  4. Different address for each receiving transaction.
#232

UTXOs are outputs from a previous transaction that are used as new inputs in the next transaction. The sum of all UTXOs in your wallet is the total number of BTC you can spend. Once a transaction occurs, new UTXOs are created.

All UTXOs become inputs in every transaction, and the difference between what you’ve spent and your input is sent back to your wallet as a new UTXO.

A fee is specified by the wallet that best suits the transaction. This fee goes to the miners who either confirm or deny your transaction. The fee can be manually increased or decreased to make it more or less appealing for miners to confirm/deny.

When sending a transaction, you can also send yourself a specified amount of Bitcoin to an address of another wallet you own, thus adding an additoinal UTXO to the transaction.

#233

UTXO’s are Unspent Transaction Outcomes: a chain of Digital Signatures where the owner signs a message transferring ownership of their UTXO to the receiver’s Public Key.
If a single UTXO isn’t large enough to satisfy the demand of the input amount, then the wallet will use a second, a third, etc until the total is greater than or equal to the amount you’re sending.
Most modern Bitcoin wallets will examine the blockchain’s activity level and automatically recommend a fee that is serviceable the majority of the time.
To increase privacy, use different address when sending and receiving.

#234
  1. Unspent Transaction Outputs (UTXO) are txns you’ve received but have not spent yet.
  2. Multiple UTXOs would be combined to total an amount large enough to cover for the transaction if possible.
  3. The transaction fee is the total of the inputs minus the total of the outputs.
  4. You could send your txns to other btc addresses that you control.
#235

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    A UTXO is a transaction that you received previously but that you did not spend yet.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Multiple UTXO’s can be combined to reach the required amount for the transaction. If this is not possible the transaction will fail.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The fee is calculated by input - output. This is mostly shown when you create a transaction.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You could send transactions to addresses you own yourself.

#236

  1. UTXOs is the acronym for Unspent Transaction Outputs - The word ‘transaction’ is generally abbreviated to TX. All input funds must equal all output funds. There is no actual ‘balance’ in the same way we use bank accounts. What this means in practice is that every time a transaction is made, it is reconciled fully. If I have access to 1 BTC on the blockchain via my wallet [in other words if I own 1 x Bitcoin] then I can send someone, for example, 0.01 BTC. What actually happens is that the entire 1 x BTC is sent, and the remainder of 0.9 BTC is sent onwards [not back] to a new location which only I can access using my private key, resulting in the balance. Therefore, the input of 1 x BTC = the sum of the output [0.90 + 0.10 BTC]

  2. Given that all inputs are effectively outputs from elsewhere - the change or balance from the example above shows that the unspent funds sent ‘onwards’ are the remainder of that transaction. One’s balance can be called one’s UTXO. They are the same calculation, except the balance is an aggregate of all the UTXOs one has access to. If there is not enough in aggregate UTXOs to cover a transaction, the wallet would not allow the TX, because it is able to communicate to the blockchain - with mobile wallets this is via what is called SPV. If the UTXO total is insufficient, the wallet will inform you the transaction is not possible. Additionally, a fee is required. This is part of the infrastructure of incentivised mining behind BTC.

  3. Because a fee is required, a small amount must be paid towards this. It is not connected to the amount of bitcoins being sent, but all wallets automatically calculate this TX fee for you. If you make a transaction and examine it on a Block Explorer - which is essentially a browser for reading blockchain transaction history, you can see that a small amount has been deducted for this fee.

  4. Use of a ‘Hardware Wallet’ can maximise privacy and security. In this way, only signed transactions are ever in contact with this type of wallet, as it is insulated from the internet, and passes these permissions via USB. However, the nature of UTXOs is effectively anonymous, because new addresses are created when transactions are made. These can be publicly viewed using a block explorer, and in private your wallet will keep track of what you can access - but it is not clear on the face of it who holds the keys to these new addresses to which these new UTXOs have been allocated. This is somewhat paradoxical in the sense that although this information is easily publicly available, it can only reveal a limited amount of information about the transactions - just the amounts.

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#237

1- Utxo are single transaction output which have been sent to my wallet and which all added together constitue my total btc holding which is available for me to spend on this particular wallet.

2- my wallet will pick as many singular utxos as needed until their sum is equal or superior to the amount required for the transaction. If their sum is superior, the residual amount will automatically be sent back to my own wallet.

3- The wallet only derives the fee amount by simply calculating, after the fact, the difference between the initially requested transaction amount and the final actual paid amount.

4- you can send any amount of your utxo input to yourself on either the same or another of your wallets. No one knows who owns the wallets.

#238
  1. They are inputs waiting to be spent.
  2. The wallet will ask the network what UTXOs your private key can spend, and will add them together for you to get your balance. It can then use the total amount to cover your transaction.
  3. Most wallets will determine the fee for you and let you know what that will be. It will figure out a fee that it thinks will get you on the blockchain fast enough. The fee is essentially the input - the output.
  4. Because no one knows who owns the addresses, so no one can be sure you are sending bitcoin to yourself to a different address your own, or to another person.
#239

Describe what Unspent Transaction Outputs (UTXO) are.
Unspent transaction ouputs are transaction that have been sent out to public keys, your wallet balance.

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 that is large enough to cover your transaction it will combine other utxo or if none make the transaction fail and thier will be none.

How would a bitcoin wallet specify the transaction fee when creating a transaction?
The bitcoin wallet will specify the transaction fee by noting below the actual transaction.

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Use monero…kind of hard to do since all transaction are recorded on the blockchain but if you use a few outputs it could increase privacy, maybe.

#240

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    When somebody sends me bitcoin, I now have this UTXO from them.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    The transaction will be invalid if I have insufficient funds, or other UTXOs available to me will be gathered to fulfil my transaction.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The wallet will derive the fee from the difference between the input & the output.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    As we don’t know who controls the addresses of these inputs & outputs, you can remain relatively anonymous in these transactions.