Homework on Bitcoin Transactions and UTXO - Questions

[Deon]

• Describe what Unspent Transaction Outputs (UTXO) are.

– Its outputs from transactions that has not been used as inputs yet in subsequent transactions. As soon as a UTXO are identified as input for a new transactions it becomes a spent outputs.

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

– Other smaller amount UTXOs would be summed together to make up your transaction. That is if you have enough UTXOs that has been “signed” by your private key to make up the transaction.

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

– Inputs = Output + Tx fee. Your wallet determines the fee based on current network conditions and the size of your transaction (not the amount though)

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

– You can generate multiple public addresses to make it hard to track your activity thus giving you more privacy.

[/quote]

[jelle_van_der_meer]

kyc is that you send your id or passport to the exchange right ? i have done it for a vew times

[Den]

@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. UTXO is the amount of coins that you have attached to your Bitcoin address which are not spent yet

2. If I do not have any single UTXO larger than the output that I would like to generate
   then I will aggregate several UTXOs whose the sum will be greater than the output I want to spend.

3. Transaction Inputs = Transaction Outputs + Fees

4. Sending the “cash back” part of the output that will return to “me” to be sent to another address that I control.
   Input(InMyControl_AddressA) --> Output(OutOfMyControl) + Remaining(InMyControl_AddressB) + Fees

[Dany]

1. Describe what Unspent Transaction Outputs (UTXO) are.

• Simply those are the unspent balances. The funds you have available in your balance. You can send them to someone or to yourself.

• technically the UTXOs are the outputs that were send to adress on your wallet.

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

• you cannot make that transaction, you need to cover the transaction fund and Tx fee also.

• to cover the transaction it combines all UTXOs (if you have them) to have enough funds for Tx and Tx fee

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

• it will take the “average” of previous transactions, just to get you fast enough in the block.

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

• I can spread my available funds to a lot different adress which are mine and other people. The blockchain only guess by the time of Tx that it “could” be mine Tx.

[Guilherme_Freitas]

1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXO’s are outputs from transactions that can be used as input um new transactions.

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

The transaction, if broadcasted, will not be validated by the network nodes and will be rejected.

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

It will be calculated as the difference between inputs and outputs. Wallets usually suggests values based on the latest fees by recalculating the “change” in the utxo sent to itself, if it is the case.

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

You can create multiple outputs to the atual recipient and other adresses controlled by yourself, making it hard to identify the atual transaction and its value

[leeandro.leeite]

Homework on Bitcoin Transactions and UTXO - Questions

1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXO’s are unspent outputs of the previous transaction.

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

The transaction cannot go through.

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

A bitcoin wallet recommend a reasonable fee, bases on the current and previous transaction fees.

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

Using multiple addresses as input and output.

[Alko89]

@jelle_van_der_meer

kyc is that you send your id or passport to the exchange right ?

Yes, the reason they do this is to be able to link your identity to your addresses after you withdraw the funds from an exchange.

[Alko89]

@Dany

to cover the transaction it combines all UTXOs

You don’t need to combine all UTXOs, just enough to cover the tx

[Jugging_Crypto]

1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXOs are funds that have been sent to your wallet. They are added up to equal your “balance” or how much you have available to send. UTXOs are the inputs you have received.

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

The sum of the UTXO inputs will be sent, a specified portion will be sent for the transaction, the remaining balance will be sent back to yourself minus the transaction fee.

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

Input-Output=Fee, The fee is not specified however; the fee is the remaining balance of the transaction after sending funds to the receiver and back to yourself.

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

Generating multiple addresses to make it difficult to determine which transaction is going to the receiver and which transaction is going back to the sender. Furthermore, the more outputs added makes it harder to determine

[Jedi_06]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXO’s are used to let your know wallet know what you can or can not spend.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   Two or more UTXO can be combined to complete the transition and the difference will be returned.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   The wallet considers the last few transitions on the blockchain to determine a price.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   There is no way of telling who owns the wallet except the user and no need to share that data with an auditor because of the transparency the blockchain provides.

[StevenM]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   The amount left after a transaction is executed. They are responsible for ending a transaction. Anything that’s left becomes an output that is deposited back into the wallet, like getting change from a twenty dollar bill on a $4.87 purchase.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   You’d have a wish sandwich, which is two pieces of bread and nothing in the middle. You can’t spend what you haven’t got.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   It would subtract the output from the input and that’d be your fee.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   Use multiple bitcoin addresses for transactions.

[281Cypher]

Describe what Unspent Transaction Outputs (UTXO) are.

UTXOs are the outputs of blockchain transactions or the credits in a tally of a private key’s funds. In order to determine the balance of funds available to a given private key, the wallet on which the key is stored queries the blockchain network to find which UTXOs can be accessed by said private key.

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

Every transaction involves a total of all UTXOs available to the private key. As long the total of available UTXOs is larger than or equal to the sum of the transaction output and transaction fees, the transaction will go through.

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

Most wallets query the blockchain network for recent transaction fees and calculates the lowest fees that result in reasonable transaction time.

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

Transaction inputs and outputs are not traceable to any private keys, so privacy is maintained.

[Gaelaxy]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   If crypto currency is in your wallet, by definition it is unspent (hence UTXO). You can think of that as the balance. When you send some of your crypto currency to another address that amount is subtracted from the total balance along with any fee and whatever is left is your new balance or UTXO and it will be the balance you start with in your next transaction.
2. What would happen if you don’t have any single UTXO that is large enough to cover your transaction?
   You can combine more than one UTXO to get enough juice.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   It doesn’t have to specify it. I takes the input UTXO amount and compares it to the amount sent and the new UTXO and whatever is left will be the fee so it doesn’t have to specify it.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   You can create a new wallet for the transaction and only put enough into it for that purpose. Then only use it that once.

[Dany]

Yes, I forgot to add, in case the one UTXO is not enough

[Fabrice]

Yes, so this exchange has a database with your personal information and how much crypto you deposit, trade and withdraw from this exchange.
In the past, binance was hacked and a list of pictures with users holding their passport on a selfie got leaked.

[Fabrice]

@Gaelaxy

If crypto currency is in your wallet, by definition it is unspent (hence UTXO). You can think of that as the balance. When you send some of your crypto currency to another address that amount is subtracted from the total balance along with any fee and whatever is left is your new balance or UTXO and it will be the balance you start with in your next transaction.

Bitcoin doesn’t work with an account model like Ethereum.
In Bitcoin, Your Wallet will read the blockchain and sum up all utxo’s your keys can spend. And show this as your balance.
Bitcoin works like cash. If someone pays you 1 bitcoin on a particular address, you will have 1 utxo of 1 bitcoin. If someone else pays you 0.5btc to another address you own, you will have 2 utxo’s. One utxo of 1 btc and another utxo of 0.5btc.
If you now want to spend 0.1 btc, you need to use an utxo of 0.5 btc in the transaction input, and spend 0.1 btc to the address you want to pay, and also send the change back to another address of yourself (0.4 minus some fee)

So when the transaction is mined, the receiver will have 1 utxo of 0.1 and you will have a new utxo of 0.4 (minus some fee)

[Helen]

1. A UTXO is a record of a transaction stored on the blockchain corresponding (not sure if this is the correct word to use) to a private key and available to be used by that holder of that private key. A person with 1BTC has one or more UTXOs assigned to their private key.

2. The wallet queries the blockchain and adds up all of the UTXOs available for that private key. If the sum of the UTXOs is below the required amount, the transaction will be ignored.

3. The wallet queries the blockchain to find the most recent fees and calculates the fee according to the size of the transaction.

4. Using multiple input and outputs.

[CryptoHats]

Homework on Bitcoin Transactions and UTXO - Questions

1. Describe what Unspent Transaction Outputs (UTXO) are.
   A: Balance left in Wallet after Transaction
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   A: No transaction possible if fees higher than balance
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   A:Signed utxo minus output=Fee
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   Different adresses can be created at will and the underlying data is obscured in the transaction process

[Alko89]

@Helen

adds up all of the UTXOs

You don’t need to add up all of them, just enough to cover the tx.

[mepler]

1. UTXO’s are the inputs used to create/finance transactions (Unspent Transactions Output). You don’t really have a balance on the blockchain, just a collection of these unspent outputs from previous transactions.

2. If you don’t have any single UTXO big enough to cover a transaction, you’ll have to send multiple or however many UTXOs so that you can cover the sum of the output and transaction fee. This would likely result in sending more than required, but one of the outputs of the transaction will redirect the difference back into your holdings.

3. Bitcoin wallets usually compare past transaction fees and will automatically create a competitive fee based on previous transactions to secure your transaction on the blockchain. Theres also a manual option to pay higher transaction fees if you wish to urgently confirm a transaction, because miners will be more incentivized to pick your transaction first.

4. You can increase anonymity on the blockchain by including yourself in the outputs of the transactions you perform. Addresses are pseudonymous so you can disguise the value and recipients of your transactions.