1.- UTXO.- are the inputs I have received and are available to be spent.
2.- My wallet is empty, so I am not able to make any transaction.
3.- There are few wallets that enable us to set different fees, depending on the speed of the transaction. The formula es Fee = inputs - outputs.
4.- I will be use a different BTC address to received funds, there are wallets that creates a different public address for any transaction.
What if you do have a few UTXOs to spend? 
UTXO - Unspent Transaction Output, this is basically all the outputs other people have sent to your wallet which is registered as an input, the sum of all the UTXO’s to your account is essentially your account ‘balance’ and the amount you have availble to send to others.
A single UTXO’s that is not sufficient to cover the transaction cost will not be be used - your wallet combines all the UTXO’s on your account to sum up a total balance, for example: if you have a total account balance of UTXO’s totalling 1 BTC, when sending a transaction of 0.7 BTC to a recipient, there will be two transactions that are carried out - one that sends 0.7BTC to a recipient and one that send 0.3BTC back to your own wallet. These will then be considered new UTXO’s to the respective wallets. (Not including transaction fees)
The transaction fee is implied and can be adjusted when constructting a transaction - miners will choose to execute the transactions that pay the highest fee.
By generating new addresses for the outputs so it is not easly traceable as to which transaction was sent back to your own account and which was sent to a new recipient.
yes i think that is what i was trying to say. 
Hi @Alko89. Thank you for the question. 
In my idea if you connect to an exchange that you did a KYC. Then you are connecting to a hosted wallet. The exchange is the one connecting with the blockchain on your behalf. You are actually trusting them with your data and they are assuring you that your data will be safe with them. In a way these exchanges are still part of the centralized finance. I do believe that these exchanges are necessary for the evolution of money because they will introduce people like me (who doesn’t have enough knowledge about blockchain and smart contracts) to still interact with the blockchain safely (though not really guaranteed 100% safe). But as we progress, DEXES like UNISWAP will surely change the game very soon and only those who are equipped with enough knowledge will win. I’m hoping and giving my best to learn as much as I could to be ready for that very near future.
Please correct my answer if I’m wrong or add something to it. I’m very much willing to learn. 
Describe what Unspent Transaction Outputs (UTXO) are.
Available crypto available to spend.
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
Unable to process transaction.
How would a bitcoin wallet specify the transaction fee when creating a transaction?
You don’t specify transaction fees, they are implied.
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Keep on changing wallet addresses, or not reuse the same wallet.
UTXOs is the balance in your wallet
Invalid Transaction
Minus the output from the input
By using multiple addresses
To simplify it, UTXO’s are unspent funds which have been sent to a private key.
If you don’t have a single UTXO that’s large enough to to cover your transaction, the transaction will not be confirmed by the nodes within the network. Thus, the transaction will not be broadcasted to the blockchain to be mined.
Inputs = Outputs + Tx fees. This means the UTXOs are output. The balance of what you didn’t send is sent back to your private key, minus a tx fee which is relevant to recent tx fees, i order to get your tx fee to the blockchain fast enough.
4, The notion of transaction inputs and outputs creates privacy within transactions by not making it clear, exactly, how much is being output to another party’s private keys.
The are transaction outputs that are tied to your private key. When tallied up they equal your total balance.
It would look for all UTXO tied to your private key to put into the transaction. If it finds there is not enough bitcoin then the transaction cannot be processed.
Typical wallets check the blockchain for recent fees on transactions that have been verified and sets the fee in accordance to ensure the transaction is verified in a timely economically manner.
Because with multiple inputs and outputs their are more address’s to track and this makes it more difficult to identify the owners of all the address’s.
Describe what Unspent Transaction Outputs (UTXO) are.
A: When you receive some Bitcoin from someone (e.g., from you father), it is recorded as an UTXO. It is an output from your father’s transaction to you, but since you haven’t spend it yet it is called “unspent”.
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
A: Your wallet will look for two (or more) UTXOs that are large enough to cover your transaction. If the amount of the two UTXOs exceeds your transaction amount, then you will get “change” (a transaction sent back to you via an address you control).
How would a bitcoin wallet specify the transaction fee when creating a transaction?
A: It is the Total Input minus the Total Output. The wallet checks most recent transaction fee amounts on the blockchain to determine the amount that is most likely to get your transaction mined.
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
A: With multiple outputs from your transaction, it is difficult for someone else to know which one is the amount you are sending to yourself vs. which one is the amount you are sending to someone else.
UTXO’s are whole or fractions of transactions, these are tracked by the blockchain. Your wallet tracks UTXO’s gives you a balance.
If you do not have a large enough UTXO to cover a single transaction your wallet will sum up other UTXO’s and you will be provided the leftover balance minus fees.
Bitcoin wallets will recommend a reasonable fee based on current and previous transaction fees. Some wallets will even let you select the fee amount.
You could have multiple outputs that may be under your control, this would also hide the real transaction in the outputs. The total amount of the actual transaction would be hidden as well because someone would need to know which address is the actual recipient.
First my wallet will create a balance after received the information of (outputs) UTXOs from the blockchain. If I want to make a transaction with the balance of my wallet, it will create 1 or more inputs depending of the different addresses I am sending the coins. If I have change back, that will be an output. In case I have not enough Shatoshi or BTC, it will result an invalid transaction.
True at the moment centralized exchanges are like a necesary evil for new people to begin their crypto journey.
The problem with doing KYC on an exchange is that they now have a connection to a physical person and the addresses one withdraws to, which breaks privacy on Bitcoin.
UTXO is the balance you have that you can use as an output, the balance that has not yet been transacted.
The transaction would not go through.
It would look at past transactions and issue a fee based on your transaction to enter the block chain and complete the transaction at reasonable time.
You can create several different addresses.
[quote=“ivan, post:1, topic:8436, full:true”]
Homework on Bitcoin Transactions and UTXO - Questions
Describe what Unspent Transaction Outputs (UTXO) are.
A UTXO is the amount of digital currency remaining after a cryptocurrency transaction is executed. UTXOs are processed continuously and are responsible for beginning and ending each transaction. When a transaction is completed, any unspent outputs are deposited back into a database as inputs which can be used at a later date for a new transaction.
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
You will have to use several UTXOs to execute the transaction and then send back to yourself (to another address you control) any excess UTXOs as “change”.
How would a bitcoin wallet specify the transaction fee when creating a transaction?
Your wallet will check the blockchain, examining privious fees and the pick a fee that is best and would get your transaction faster into the blockchain.
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
This can be done by using several addresses.
UTXOs are your allowed sum that is in your wallet or PK
Miners will reject your Tx due to insufficient funds.
The blockchain adjusts the appropriate fee based on current and previous Tx.
Create new addresses
Unspent Transaction Outputs - UTXOs - come from previous transaction, are tracked to get summed from and by the wallet into the wallet balance.
as long the wallet finds more of UTXOs to sum up to a large enough btc amount to cover fee and transaction, fine, let us transact. If the sum of none or all UXTOx is insufficient to cover transaction amount and fee, this transaction will be invalid and so refused.
a btc wallet calculates fee by subtracting sum of outputs from sum of inputs. It seems to compare several possible fees from previous fees on block, and ( magically to me yet) chooses a quick enough one to proceed the transaction.
I would find a way to transact offline. Pleased with answer from @Alko89: “use different address for each receiving transaction”
Describe what Unspent Transaction Outputs (UTXO) are.
UTXOs are the total amount of digital currency remaining that can be spent after a cryptocurrency transaction is executed.
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
The wallet will combine multiple UTXOs so that it is large enough to cover the transaction. If the combined UTXOs are not large enough to cover for the transaction, the transaction will not take place.
How would a bitcoin wallet specify the transaction fee when creating a transaction?
The bitcoin wallet will refer to the latest transaction fees from the latest few transactions and determine a transaction fee that will allow the transaction to go through at a reasonable speed.
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Transaction input and outputs are between different addresses, with no identify revealed from the addresses. A person can be sending and receiving digital currency to multiple addresses that belong to him/her but this will be transparent to others.