Homework on Bitcoin Transactions and UTXO - Questions

[Michelp]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXO (unspent transaction output) represents all the remaining credit a specific address can use. Their sum represent the wallet available amount.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   The nodes will verify and refuse the transaction as the input > output

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   By asking nodes for the blockchain and scanning recent transaction fees to make an average fee. Some wallets let you input your own fee amount too. This fee is the incentive for the miners to quickly process your transaction.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   Your private key allows you to create multiple public keys. Using different public keys in the transaction outputs (when there is output going back to yourself) will make it harder for someone to follow your tracks.

[carolyn]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXO are outputs (change) received from previous transaction that the wallet keep track of and can be 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 add up the small unspent outputs and construct a transaction with enough UTXO to cover the cost.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   transaction fee = inputs - outputs

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   You can send outputs to a different address that the wallet controls and this increases privacy.

[mariop777]

@Baidis

• UTXO is like change from a previous transaction.
• Use more then one UTXO.
• The difference between inputs and outputs.
• Using many inputs and outputs. Though effective to someone reading block explorer this is useless privacy measure for software based tracking.

1.The utxo is change from a previous transaction.
2. Transaction declined.
3. The difference between the input and output.
4. You can track all utxo’s. they are numbers and letters, but once that person had been linked to an TX you can find all transactions linked to that 1.

[Naomshka]

1. UTXOs are simple said, the currency amount you have left (that you can spend, resend or invest, without dept or loan or anything of lending, just the rest you have in your wallet)
2. The transaction can’t be done, it failed.
3. Fees are the transactions inputs less the tx’s outputs.
4. By generating new addresses and using different outputs that also goes to the sender of an inputs among others. It’s impossible like that to know who it is.

[peros369]

@ivan

• Describe what Unspent Transaction Outputs (UTXO) are.
• What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
• How would a bitcoin wallet specify the transaction fee when creating a transaction?
• How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?

1. Unspent Transactions Outputs are basically transactions being recieved on a particullar adress and that havent been spent yet (or that have not been send further yet). When UTXO are being send further they become input in that sent transaction.

2. If you have multiple smaller UTXO and those combined are large enough to cover for your transactions, then it will go through, otherwise if sum of UTXO is smaller then the transaction amount, the transaction would fail.

3. TXfee = INPUTS - OUTPUTS

4. To increase privacy in your transaction you could send the remaining amount from transactions to different adresses that you own.

[bobmaucher]

1. UTXOs are the amount of Bitcoin that has come into a wallet but have not been transferred out. It’s effectively that wallet’s balance.

2. The UTXOs will be aggregated until they are large enough to cover the transaction. If the aggregate UTXOs are still not enough, then the transaction will fail.

3. A bitcoin wallet would gauge recent transactions and fees to calculate a fee amount to pay for a reasonably fast confirmation time. It would then subtract that from the total UTXOs and the outputs to send back to the originating wallet address.

4. You could combine several transactions from several wallets into one big transaction.

[cmerced1]

1. unspent funds that are sent from you by another party.
2. another transaction will occur where it takes a bigger UTXO and sends it through, but sends the change of the transaction back to the person.
3. UTXO output-UTXO input =
   4.you can break the transaction up into multiple UTXOs and send money back to yourself and other different addresses.

[Alko89]

@MarcAndre_Morissette

use a private blockchain

Private blockchains don’t have any value you can use a different address each time you receive funds

[Alko89]

@Michelp

Your private key allows you to create multiple public keys.

Not really, each public key has its own corresponding private key. Most modern wallets however are HD (hierarchical deterministic) wallets that use a so called master key (fancy name for root private key) to generate multiple private keys from that key and so generate addresses while you only have to remember the master key.

[Alko89]

@bobmaucher

from several wallets into one big transaction.

You can just use multiple addresses in a single wallet

[Alko89]

@cmerced1

another transaction will occur where it takes a bigger UTXO

You can combine multiple UTXOs into a single tx

[Fabrice]

@Michelp

The nodes will verify and refuse the transaction as the input > output

It will refuse as the input < output.

You need more input, to cover for more than enough output for some fee as well.
Input - output = fee for the miner.

If you don’t have a single UTXO big enough you can combine multiple smaller utxo’s together.

[MikomX]

1: Its your bitcoin… The transaction that you have not spent yet.

2: The transactoin dont get approved or it gets compounded with another UTXO.

3: The fee is the difference between the input and the UTXO. You can set a fee or the wallet can check the blockchain to see what fee is appropriate.

4: you can use more then one wallet and multiple transactions and no one knows whos wallet it is.

[Fabrice]

@MikomX

The fee is the difference between the input and the UTXO. You can set a fee or the wallet can check the blockchain to see what fee is appropriate.

In the inputs you specify your utxo’s with the amount of bitcoin on it and change ownership.
so the outputs become new utxo’s from the receivers.

So fee = Input (your utxo’s) - output (future utxo’s for the receivers)

[Maximus1]

1. UTXOs are BTCs you received but have not been spent yet. The sum of all UTXOs is your BTC balance.
2. Use multiple UTXOs to cover the transaction.
3. The wallet would choose a tx fee to get a reasonable transaction time.
4. Generate new addresses for each transaction.

[Warn]

1. after you pay someone there btc would be a UTXO
2. you would have to combine two of them that have enough btc for the transaction
3. It wouldn’t you have to put in a reasonable transaction for the miner
4. the outputs can be spent by using inputs sent to your wallet previously

[Socrates-01]

1.Unspent transaction outputs are the remaining funds in your wallet which can be used to spend in a transaction if possible. It will function as input in the next transaction.
2.No transactions will be made because of inability to cover up the required fees.
3.bitcoin wallet specify it by means of subtracting inputs and outputs of transaction.
4.different addresses can increase the privacy of your transactions

[Mattcrypto]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   The balance left in your wallet.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   The transaction would be invalid.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   It’s usually implied. Remainder of inputs minus outputs of a Tx.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?

[Verses]

@ivan

Homework on Bitcoin Transactions and UTXO - Questions

1. Describe what Unspent Transaction Outputs (UTXO) are.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?

1.) UTXOs is the balance of unspent outputs in your wallet. it’s like the change you get when you buy something in a store that costs 15 dollars and you pay with 20 dollars. Your wallet sums everything up and gives you a full summary of what you can spend.

2.) The transaction would become invalid and rejected unless you have more than 1 UTXO then you can add them together and the sum of that you can pay while the change you send it back to yourself.

3.) The wallet will determine the Transaction fee through reading previous transactions. and it would always be the Input - the output = the fee.

4.) By using different addresses

[Donald_Birtch]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   The output(s) of a bitcoin transaction which are equal to the input(s) less the transaction fee.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   When there is no single UTXO for your address to cover a large transaction it is possible to include multiple UTXO as an input for the transaction with a sum larger than the output(s) required.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   The transaction fee of a bitcoin transaction is calculated as the difference of the input UTXOs and the output UTXOs

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   Using unique input and output UTXO addresses would increase privacy because it would be difficult to determine which output went to another person.