Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#2617

UTXO is the unspent output of a tx and the sum of all UTXOs makes up the balance.

Therefore you can combine multiple UTXOs to pay for a tx, if you have enough to cover the tx. :slight_smile:

2 Likes
#2618

Yes, most modern wallets are HD (hierarchical deterministic) wallets that generate new private keys from a master key (fancy name for the root private key). You will notice that each time you choose to receive funds you will get a new address. :slight_smile:

2 Likes
#2619

You can just create a new address in a wallet each time you receive funds. :slight_smile:

#2620

UTXOs are previous transaction outputs to a wallet and at the same time are the inputs available for a construction of new transactions.

The wallet will take two or more available UTXOs the sum of which is large enough to cover the outputs + fee for the transaction.

It looks on the network for recent transactions and suggest a reasonable fee to cover the cost for the transaction. The fee should equal the sum of all inputs minus the outputs.

By increasing the number of outputs to many personal accounts + never expose Public keys to connect to personality.

1 Like
#2621
  1. UTXOs generally are incoming credits to your wallet you can use to send to people or places.
  2. The transaction will fail.
  3. By taking the difference of the inputs and outputs.
  4. By sending money to someone else and back to yourself at the same time will give you to different outputs masking it impossible to determine destination of money
#2622

You would also have to use a different address to send back, if you send back to the same address as in the tx input it would be easy to know what parts of the tx outputs go to whom :slight_smile:

1 Like
#2623
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    • UTXOs are the unspent Bitcoin available for spending and calculated as Inputs (BTC received transactions) minus Outputs minus Fees.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    • The wallet calculates the output requirement and then sends the remaining balance back to yourself as part of the output such that input = output + fees.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    • It is the balancing number from Input = Output + Fees, determined by observing the fee for similar transactions and time required to process the transaction.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    • Theoretically this is not possible but one can make it more difficult by using multiple wallets appropriately.
1 Like
#2624

Alko89 TY for clear my thougths!

#2625

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    A UTXO is a sum of received and spent transactions. It gathers received transactions and adds up their sum for a total wallet balance. It also has other applications such as calculating transaction fees, and returning change to your wallet when a transaction is fulfilled.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    The system would gather from other unspent transactions and pool them to fulfill the order cost. If there was not enough UTXO the transaction would be rejected.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The total number of outputs in the transaction would be subtracted from the total number of inputs, minus any fees.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    A new address could be created each time a transaction is made, potentially sending a portion to another party, and returning the sum to a new privately held address. It would be very difficult to verify that you are the user of the original address and new address.

1 Like
#2626

  1. UTXO are essentially the output from a hash and signifies how much funds have been allocated for use in your wallet.

  2. The transaction would be discarded from the nodes as a failed transaction if no other UTXO’s could help to bolster the transaction through.

  3. The fee is calculated using the inputs and outputs given to determine the proper fee.

  4. You can send money to different personal addresses to increase privacy.

1 Like
#2627
  1. It shows the remaining amount of all previous transactions, your wallet will add that total up for you.
  2. The transaction will take enough UTXO, even if it’s higher than the transaction amount, send the transaction amount, and the remaining will be sent back to the sender.
  3. A bitcoin wallet specifies the transaction fee by subtracting the output from the input.
  4. By using a new address for each receiving transaction.
1 Like
#2628

UTXOs are used as inputs in a new transaction, after that they are spent.

You can also use multiple addresses in a wallet :slight_smile:

#2629

UTXOs are only the Unspent outputs. Once they are used as an input to a new tx, they are considered spent. :slight_smile:

#2630

Thank you. I appreciate the feedback.

#2631
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • Unspent Transaction Outputs - Transactions of received Crypto - Sum of all Transactions to said wallet.
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • It would look to see if there are anymore Inputs to cover the TX, if not then it would fail. If so, the unspent change of Crypto would be sent to an address you control.
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • The wallet would look on the network to calculate / suggest the fee based on latest previous TX’s.
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • Use multiple addresses when receiving and sending Crypto that you have control of.
1 Like
#2632

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    It is like an amount you can use which you can check from your wallet.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    You can not process your transaction or it will add with other UTXO to make the input big enough to purchase.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It will calculate the amount good enough to be processed into a block.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Create a different accounts in the same wallet.

1 Like
#2633

  1. UTXO’s are transactions that have added to the balance of a wallet but they have not been spent or used as an input in a transaction.

  2. either multiple UTXOs will be used in the transaction or if you your cumulative UTXO balance is not enough to cover the transaction qty then the transaction will be rejected.

  3. Input(s) minus output(s) equal the fee.

  4. Create multiple outputs to mask the intended destination of the transaction. You could use multiple wallet addresses that you control.

1 Like
#2634
  1. Total unspent transactions in wallet
  2. Transaction would not go through
  3. The difference between inputs and outputs
  4. Using multiple inputs and outputs.
2 Likes
#2635

  • utxos are the balance of you’re wallet

  • it will be declined

  • it will tell you what is you’re input and you’re output, the difference between input and output will be the transaction fee

  • you can atleast try to put many outputs, but worthless

1 Like
#2636

Why do you think its worthless? :slight_smile: