Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#2657
  1. utxo are fund from a output that is available for you to use

2.your transaction will fail

  1. dif between the input and output

  2. constantly generating a new output addys

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#2658

  1. A Unspent Transaction Outputs (UTXO) are records that indicate the value I have available to spend in my wallet. It is generated when someone or myself send funds to my wallet. A wallet can have zero to many UTXOs to spend at any given time.

  2. Then we would send a portion of the transaction value from other UTXOs to cover for the whole transaction, assuming the total amount we want to send is covered by the multiple UTXOs we have as part of our wallet’s overall calculated balance.

Assuming we are sending 0.6 BTC to Bob and we have 0.8 BTC balance in our wallet split into two separate UTXOs. UTXO A has a balance of 0.5 BTC while UTXO B has a balance of 0.3 BTC. Then we would spend both UTXOs to form a balance of 0.6 BTC.

What does this mean?

It means UTXO A isn’t large enough to cover the full 0.6 BTC spend. Therefore we also spend UTXO B
to send our desired 0.6 BTC value to Bob. However, now it means we have an output of 0.8 BTC.

Why?

because the full value of every UTXO is like a bank note with a number written on it. We can’t simply tear up a portion of a bank note to send someone a portion of the note’s money.

So what happens in reality is we still end up sending 0.6 BTC to Bob while the extra 0.2 BTC is simply sent back to our own wallet. So now we have a 0.2 BTC UTXO which would also be our new overall balance.

If it’s the case that we only have a single UTXO and its value is lower than what we would like to send then the transaction will eventually end up getting disposed of by the blockchain. As a result the UTXO will remain to be spent.

  1. It can be in varying ways depending on the wallet application used. It could be in the form of a Low-Medium-High setting where the fee for each setting is suggested based on the average fees paid by other transactions in the blockchain at the time. Otherwise, it could be a custom fee or a fee that gets automatically applied when a UTXO is spent without any input of the fee provided by the user.

  2. You create multiple inputs for each transaction you receive which enhances anonymity and you send multiple outputs to others. For any regular individual using the block explorer, it becomes very difficult to track the owner of a UTXO by doing so which increases privacy.

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#2659
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • UTXO’s are unspent BTC the your wallet uses as fees to make a transactions.
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • If you there is no UTXO’s then your transaction will not go thru. It will be rejected and state accordingly on the ledger.
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • So your wallet searches the blockchain and will determine which fee is best for said transaction.
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • You can generate different outputs and use them only once.
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#2660

  1. UTXOs are unspent cryptocurrency that are eligible to be spend for the next transaction.

  2. The transaction will not take place as the wallet checks the UTXOs before making a transaction.

  3. Input - Output = Tx fees.

  4. We cannot know to whom the Tx is being being sent to. It is anonymous and thus increases privacy.

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#2661

The funds an address receives. Unspent outputs of previous transactions sent to a given address. They are the inputs of a possible new transaction that the wallet may construct.

This isn’t a problem as long as the some of all your UTXOs cover your transaction. If they don’t, your transaction would be discarded by the nodes because it is invalid.

It wouldn’t. The fee is the difference between the sum of input UTXOs and the defined outputs. If you don’t leave enough for the miners, your transaction won’t get picked up.

You can hide you’r identity by generating a new address with every transaction in your wallet(s) and sending funds to them (really, still just yourself, but how could an outsider know?). You can send a much larger amount then you intended to the recipient and send the rest this way back to yourself, hiding which of the addresses were the true recipient(s) in the process.
Trying to track someone who consistently uses multiple new addresses, and never uses the same one twice - I imagine - must be quite a headache.

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#2662
  1. UTXO is an unspent transaction output. Like change from a purchase.
  2. You can Use more then one UTXO and send the change back to yourself.
  3. The difference in the inputs and outputs.
  4. Using multiple inputs and outputs can increase bitcoins pseudonymous nature but this is no longer very relevant with the development of tracking software firms like chainalysis.
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#2663

  1. UTXOs are transaction outputs not already used as inputs in any transactions. My UTXOs would be all the bitcoin sent to my address and that I have not already used (i.e. spent). If I sum up all my UTXOs, it gives me my BTC balance.

  2. I would therefore use (i.e. add up) more than one of my UTXOs to cover the transaction amount. If the sum of all my UTXOs is lesser than the transaction amount, then I cannot send this transaction (it would be rejected by the blockchain).

  3. The transaction fee is implied by the difference between the total inputs and the total outputs. So the wallet would ensure that this difference equals the transaction fee amount.

  4. By systematically using a new address as the destination of the UTXO corresponding to the change (if any) of my transactions (change = total inputs - amount(s) to be paid - transaction fee).

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#2664

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are transaction outputs you received from someone’s transaction that you have not spent yet or you have not used it to create a new transaction.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    You cannot create a new transaction

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The transaction fee is not specified, it is implied.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You can use multiple wallet addresses and by sending UTXOs to your other addresses that you own, it will be hard to trace who the owner is.

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#2665

1.- UTXO is an output from a previous transaction to a wallet that has not been spent. The sum of all UTXO of a specific wallet on the block chain is equal to the available “balance” for that wallet.

2.- To create a transaction your wallet will use available (more than one) UTXO such that the input sum of the transaction exceed the total amount you want to output. Any remainder will return to your address as “change” or in blockchain terms another UTXO to yourself.

3.- A Bitcoin wallet will estimate an “appropriate” transaction fee based on recent fees in the blockchain.

4.- By owning or creating new wallets under your control, and creating a transaction which output includes various of your own wallets; it would be difficult to identify if the transaction was done to a second party or to yourself.

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#2666

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    The UTXO is an output just received to my walled, not spent yet.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    In this case it’s not possible to do the transaction.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It’s the input minus the output. Some wallets take a look to the network and offer a reasonable fee for a secure and quite fast transaction.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    By changing the output address you may increase privacy if you are worried about some control.

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#2667
  1. Describe what Unspent Transaction Outputs (UTXO) are. UTXO is a transaction you have received but you haven’t spent making it unspent. When you make your own transaction the UTXO will be a input in a transaction making it spent and a UTXO for the receiver.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? The transaction will fail or your wallet will add up all your UTXO to cover the amount and proceed with the transaction.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction? Your wallet will check the last fee made on the blockchain and calculate that fee on your transaction or your wallet will calculate the input minus the output and what’s left will be for the fee.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? Use a different wallet address for each transaction.
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#2668

  1. UTXO are how your wallet keeps its balance. They are transactions that have come into your wallet that you have not used yet.

  2. It will use and combine another transaction. It will combine these amounts, send the correct amount plus fees and return the remainder to the wallet. If there is not enough UTXO the transaction will fail.

  3. It picks the best fee from the network based on previous transactions and network congestions.

  4. Inputs and outputs serve as a record of the transactions but there is no way to know who they belong to.

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#2669
  1. The amount of available BTC you have access to in your wallet
  2. You would use them all together, assuming you have more … send the desired amount … spend… The remaining balance minus fees is returned to your wallet. I not enough in total , the transaction will not go thru or be validated
  3. Uses the latest fee percent used in previous transactions, and subtract it from the leftover balance of transaction, then the final balance is returned to your wallet
  4. No one knows which output is the spend amount versus the return amount
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#2670

  1. Unspent Transaction Output’s (UTXO’s) are the inputs from the last transaction BEFORE the next transaction occurs. Put another way UTXO’s are the unspent transaction out from one wallet address before the receiving address spend it; after which it becomes a ‘spent transaction’

  2. In this case, two (or more) UTXO’s are combined (sum) to pay for the transaction (+ TX fee) and the difference would be sent back to a wallet address I own

  3. The transaction fee would specify (calculate and illustrate) the difference between the total input and the total Output what’s left is the Transaction fee.

  4. You could first send Bitcoin from your current address to a unique address that you own, and then initiate a transaction from the new address showing a different public key.

#2671

I don’t think this would help much, one could still assume the address is yours.
You could just spend the UTXO and send the change back to yourself to a different address. In that case there is no way of knowing that part of the tx was used to pay a service and what part went back to yourself. :slight_smile:

#2672
  1. They are the unspent amounts of for example BTC you received from somebody else.
  2. They’d get sum up with other UTXO’s in order to cover the output and TX fee, the reminder would remain as a UTXO.
  3. It suggests the optimal fee based on the current network congestion.
  4. Using multiple addresses for each transaction.
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#2673

  1. UTXO’s are the amount of unspent bitcoin on a private key after sending it.

  2. If you don’t have a single UTXO that is large enough to cover for your transaction then the wallet will pull from multiple UTXO’s. If there are not enough UTXO’s available then the transaction will become invalid.

  3. A bitcoin wallet would specify the transaction fee when creating a transaction by identifying an average fee that will get your transaction on the block in a timely manner. The amount of the fee will be the difference between the input and output values.

  4. You could use transaction inputs and outputs to increase privacy in your transaction by using new output addresses that are not yet attached to any entity.

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#2674

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs hold information how much funds have been sent to Wallet.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    More UTXOs must be used to cover the cost of transaction we want to make. The leftover will be sent back to us. If we dont have enough UTXOs we cannot execute transaction.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Transaction Fee is amount of Input minus Output. Its cost depends on transaction fees ongoing on blockchain.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    While using more UTXOs for transaction, leftover will be sent back to us but nobody from outside can see if it was sent back to us. So its unclear how much of funds have been really spent.

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#2675

1- balance
2- if there is no balance available there is no transaction
3-the wallet checks the balance and the fee and is processed automatically
4-use multiple inputs for multiple outputs

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#2676

  1. UTXOs are transactions that you can use/spend (e.g. send to someone else’s bitcoin wallet address).

  2. The transaction will be denied by the nodes/network. If you have several UTXOs that together cover the transaction however, then it’ll go through.

  3. The wallet will calculate/propose a fee based on previous transactions on the blockchain.

  4. You can use/generate different wallet addresses for each transaction.

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