Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#241
  1. UTXO’s are the unspent amount you have left to spend in your wallet.
  2. Your wallet will automatically allocate more unspent UTXO’s to cover a transaction and send the balance back to an address that you control.
  3. The wallet will see what fees are applicable to get the transaction confirmed in a reasonable time… The fee will be the difference between input and output of transaction.
  4. For one input you can have multiple outputs which the sender can still be in control of those addresses therefore no way of knowing who the funds were actually send to.
#242
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXO’s are the unspent transactions that you have direct control over through a wallet. They are portions of previous transactions that relate to a wallets address. The sum total of UTXO’s under your control equates to your account balance.

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

If available a multiple of UTXO’s can be combined to meet or exceed the amount required then any unspent outputs will be re assigned to your wallet address.

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

The fee is usually indicated by recent fee history of the network or a rounding facility on the end of a UTXO grouping. Also in some wallets a fee can be pre selected.

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

You could obfuscate your activity by sending UTXO’s of varying amounts from and to multiple addresses.

:blush:

#243
  1. A UTXO is all unspent transactions that your private keys control inside your wallet.
  2. Your wallet will combine UTXO’s in your wallet so you have more than enough to send. Any extra funds that are in that UTXO that is not to pay someone else gets automatically sent back to you. It is like paying some 7 dollars but only having a $10 bill. The $3 will be handed back to you.
  3. The input minus the output equals the transaction fee.
  4. Your UTXO can sent you funds back to another wallet you control and it is practically impossible to prove the address you sent it to was yours at the same time it sends funds to another individual .
#244

UTXO’s are transactions that I have received on my wallet’s address.

My wallet would take as many UTXO’s as is needed to cover the transaction and will send me back the change as another UTXO on my wallet.

The transaction fee is the difference between input and output of transaction.

By using many different addresses of the same wallet.

#245

  1. UTXO’s stand for unspent transaction outputs, and represent your spendable received inputs or transactions received.

  2. If you dont have a single UTXO large enough to cover your transaction, your wallet will combine however many UTXO’s are required to equal or exceed your total transaction.

  3. Your wallet will look at the blockchain to see how much is being reccommended as a fee depending on current traffic, usage, and transaction size. How many UTXO’s and multiple inputs being used to create the transaction also play a part in fee calculation.

  4. Some wallets change the change address so it is not as obvious what was spent and what was change. Maybe also, if you had multiple inputs from multiple senders, consolidate them by sending many little payments to yourself. This would ‘bury’ income source a bit further back, and make your future transaction fees less because theirs less UTXO data being combined when your next transaction is being created.

ps. on a side note, I knew NOTHING about this complex side of btc transactions, and its REALLY opened my eyes. Fascinating stuff! Only 3rd day doing this course and I’m learning sooo much! Which is the general idea I guess lol.

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#246
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    is an input that a wallet recorded that is never been sent as an output for another transaction.
    the wallet account all the UTXOs that are available for that private key to be sent in a new tx.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    the wallet is gonna sum all the necessary UTXOs to create a total of input big enough to cover for the transaction + the fees, if something is left out get sent back to the wallet using a new transaction directed to a private key controlled by that wallet.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    the wallet would look an the previous fees and calculate an amount that would get you reasonably fast in the blockchain
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    i can send a part of the transaction to the real recipient, and one or more transaction on one or more bitcoin addresses controlled by myself that aren’t the same of the original wallet that generated the transaction.
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#247

  1. UTXOs are spendable btc.

  2. You would need to combine 2 or more UTXOs that would cover the total you want to send + TX fees.

  3. By specifying all outputs and the remaining input btc is the TX fee.

  4. by sending btc to yourself at a different address. Or by adding multiple outputs to addresses you control along with the output to the intended recipient, so no one can tell what amount of btc you actually spent.

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#248
  1. These are balances that have been sent to your address, which you have not yet spent in a new transaction yourself. The collection of UTXO’s corresponding to your address is your balance.
  2. The balance of multiple available corresponding UTXO’s are summed and put into the transaction. If the summed balance of all corresponding UTXO’s are not sufficient input for your new output, than the transaction is not accepted by the nodes because they check the blockchain to verify this action.
  3. The wallet will check what the average recently used fees are and use that amount to assure that the chances are high enough for your transaction to be timely appended to a block by a miner. Some wallets will allow the user to specify the fee amount themselves.
  4. Sending (remaining) balances back to yourself in a new address that you also control, will increase your anonymity and privacy.
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#249
  1. UTXO are the results of an input transaction.
  2. It will pull from all the UTXO that are under the control of your private key to cover the amount if its there.
  3. Your wallet in default will determine the fee by looking at recent fees on the chain and then set it at a reasonable amount, in relation to a reasonable amount of time. But most wallets allow you to set a higher fee to expedite the transaction.
  4. Sending to a never been used private/public key pair, as well as sending equal output amounts making it more difficult to determine which was the actual transaction and which was the returning amount, the most s is to secure way is to create several paper wallet and use those as the input wallets.
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#250

  1. bitcoin that have not bean spent

  2. Your transaction will fail

  3. It will try to pick a suitable fee by looking on the blockchain of the previous fees of blocks.

  4. You do not know who is the recipient or who is just receiving change back

#251

First it will combine multiple UTXO’S you have. Only when the total amount of your utxo’s aren’t enough to make the transaction, it will fail

#252

1.A UTXO defines an output of a blockchain transaction that has not been spent

2.It will sum up all possible other small UTXos to make a large transaction as required and change will be credited to your account after deduction of transaction fees.

3.The wallet checks the history of transaction fees, then calculates and proposes a fee that will result in a relatively fast confirmation time.

4.By having multiple wallets wich are yours or by using a mixer example wasabi wallet

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#253

  • This is the unspent output from transactions. The blockchain does not store an actual balance - only the UTXO’s. Then a wallet calculates the balance associated with a private key from the UTXO data.

  • If a single UTXO is not enough, then the wallet will query the blockchain to see what other UTXO’s are associated with your private key that can be spent to equal the total needed for your transaction. If that is still not enough, then the transaction will not be created.

  • Some wallets will allow the wallet owner to specify the fee, although it is more common and efficient for the wallet to calculate the fee for you based upon the current fees to ensure that your transaction is accepted into the blockchain fast enough. (If you were to manually select a fee too low, your transaction could sit for a long time waiting to be picked up by a miner.)

  • Input and output addresses are inherently private by design, since ownership data isn’t easily obtained, although privacy can be increased by increasing the amount of inputs and outputs so that various addresses are used.

#254

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    It is outputs from another address to my address that have not been used/spent yet.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    You add different utxo’s together untill the sum is higher than the amount you want to spend or equal to it plus the fee.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It show it indirectly by showing both the outputs and the inputs. The fee is the difference.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You can use inputs from anonymous addresses and send back to an address that you yourself have created anonymously.

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#255

  1. A utxo is how your wallet know how many bitcoin you “own”, their is no actual bitcoin that you have, it is only the outputs from the transactions made to you that get registered on the blockchain that you than can use again as an input for your transactions.

  2. if you have multiple UTXO’s, they will be combined until it’s enough or more to cover the transaction. the entire input UTXO’s have to be spend so you will send the “change” back to yourself, minus the fees.

  3. the fee is nothing more than the amount in input minus the amount in output. whats left is for the fee.

  4. if you send the “change” not to the same adress as the input but to an other adress owned by you.

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#256
  • Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO are inputs that are unspent. They become spent transactions once you send and spend to another address.
  • What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    It is an unconfirmed transaction and will not be verified or placed on the Blockchain.
  • How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Some wallets will recommend a fee and some will not.
  • How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Only the address is on the BlockExplorer and no Name. This gives you privacy. One address may be a transaction back to yourself as change for Example and no one is able to verify that.
#257

Oh thank you for the clarification. I didn’t know that aspect of it.

#258

First your wallet will try to combine multiple UTXO’S you own to make this transaction. only if the sum of all available UTXOs Isn’t enough, the transaction will fail

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#259

Homework on Bitcoin Transactions and UTXO - Questions

  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • UTXO’s are payments or inputs that have been paid into your wallet
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • is the UTXO is not enough to cover transaction plus fee it will be rejected
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • it would calculate an appropriate speed so that the transaction can be carried out in an acceptable time period and charge accordingly. Miners want the most transaction fee so these ones would be completed quicker
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • using a different wallet address controlled by you to receive back the unspent fund’s transacted
#260

Your wallet will first combine more utxo’s available as input to make the transaction. Only when all your available utxo’s together doesn’t cover the amount, the transaction will fail.

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