Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#2779

Describe what Unspent Transaction Outputs (UTXO) are.
They are transaction amounts that you have received but have not spent yet.

What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
Two or more UTXO’s would be used as inputs to the transaction.

How would a bitcoin wallet specify the transaction fee when creating a transaction?
It will look at current transaction fees on the blockchain to determine how much of a fee would be needed for a reasonable transaction time.

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You could use one or more of the outputs to send Bitcoin back to addresses that you own, either in the same wallet or a different wallet.

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#2780

  1. UTXOs are outputs from previous transactions, which have been received and are now available to spend as inputs in newly constructed transactions.

  2. Assuming my total balance is enough to make the transaction, my wallet will aggregate the available UTXOs to construct the transaction.

  3. The wallet apparently estimates fair price based on recent blockchain performance metrics. Some wallets let you edit this. From the blockchain data, the fee is inferred from the difference between the input and output values.

  4. If you want to jumble up transaction data from an outside view, you can generate new addresses to send your change to.

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#2781

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are the sum of all transaction that have been sent to your wallet, your inputs. This is the effective balance that you have available to spend.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    You wallet would refuse to confirm and sign the transaction.

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

the wallet will specify the transaction fee by looking at recent transaction fees and ensuring that an appropriate fee is used that is enough to complete the transaction in a reasonable amount of time.

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

Always use a new address to send back UTXO outputs to (Any unspent Bitcoin/ Your change from the transaction). This way tracking where the UTXOs goes back to the sender is very challenging.

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#2782
  1. UTXO is an output of a transaction. They ultimately become inputs if someone spends BTC, however as assets, they are outputs from the initial transaction in which they were either created or received.
  2. You would use more then one UTXO and the balance less the transaction fees would get sent back to you.
  3. It would look at the most recent transaction fees that miners are choosing and select one that has had good processing time.
  4. create multiple outputs and include a different address for whatever amount goes back to you so that your wallet is not identified as the output and the input. Always use different wallet addresses for transactions.
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#2783

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO is the balance in your wallet that it keeps track of

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

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    With the difference between inputs and outputs

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

  5. Use a different address for each receiving transaction.

#2784
  1. UTXO are inputs that can be spent in another transaction. These are wallet balance.
  2. Wallet would add UTXO together to form a sum large enough to cover transaction. If the sum would still be insufficient, transaction would be rejected.
  3. Bitcoin wallet looks at the recent transaction fees on the blockchain and proposes the value for your transaction. Fee can also be manually selected.
  4. One user can use many different addresses for transaction. It is also possible to send back to the same user using different address.
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#2785

An UTXO is not your entire balance. An utxo is a amount of bitcoin that is send to 1 of your addresses. You can have multiple utxo’s on different addresses that the keys of your Wallet control. So if someone sends you for example 1 bitcoin to your address, this will be 1 utxo of 1 bitcoin that you now own and can spend later if you want. If you get a second payment of 0.5 btc, this will be another utxo you own and can spend in the future.
Your Wallet will read the blockchain and check on all addresses you own and sum up all utxo’s you own. (and show this as your balance)

If you want to pay for example 0.1 bitcoin to someone, you can. Use your utxo of 0.5 bitcoin in the input of the transaction, and in the output of the transaction you set 0.1 bitcoin to the address you want to pay to, and the remaining 0.4 has to get send back to 1 of your own addresses again as change (minus some fee) in the output of the transaction as well.
So you can see utxo’s like cash. If you want to buy coffee for 2 dollars and you have a 5 dollar bill (like a 5 dollar utxo) you will get 3 dollars back in change ( wich will be like a new utxo of 3 dollars you get back)

If you don’t have an utxo big enough to cover for your transaction, you can use multiple smaller utxo’s together in the input of the transaction.

(Like giving 3 utxo’s of 1 dollar to pay for a 3 dollar coffee)

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#2786
  1. It is your balance
  2. The transaction cannot be performed
  3. The fee is input - outputs
  4. You do not know who make a transaction or receive it.
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#2787

What about if you do know the address of both participants? :slight_smile:

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#2788
  1. Describe what Unspent Transaction Outputs (UTXO) are.

This is database of all transactions that belong to your private key, sum of them gives you balance you can spend.

  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    It will sum UTXO to have value enough to send transaction, and any change that left value will send back to you.

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

it is difference between inputs and the outputs

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

Transaction outputs can be send to different addresses including your own

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#2789
  1. The surplus amount left after a transaction.
  2. Your wallet will aggregate multiple UTXO’s until it has an amount larger than the transaction otherwise the transaction will be rejected.
  3. The Bitcoin wallet will specify the transaction fee by subtracting the output from the input value.
  4. By moving funds to multiple accounts it is hard to prove how much of the funds have actually been moved to other wallets.
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#2790
  1. UTXO is your balance of bitcoin from a previous transaction, that have not been spent
  2. Transaction will be declined
  3. Fee is easily calculated. It s basically difference between input and outputs.
  4. By sending the output to a different addresses.
#2791
  1. Describe what Unspent Transaction Outputs (UTXO) are: Wallet Balance
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? If only a single UTXO, then it would not go ahead. If multiple, then the wallet would combine to send
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction? Subtracting the input from output and applying taking out the difference
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? Clustering the inputs and outputs helps dilute the transaction data making it harder to sort through
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#2792

  1. the UTXO is like receiving change back from a purchase. example of tendering $10 for a $7 items and received $3 back in change. the output of a transaction that remains unused… what is left over.

  2. not enough to cover the transaction.

  3. Bitcoin wallet transaction fee is the input - output plus transaction fees. basically the difference between the two.

  4. use different address for the same wallet.

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#2793

Homework on Bitcoin Transactions and UTXO - Questions

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    The output from a transaction that a user owns and that they’re able to spend later in another transaction.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    You can combine UTXO’s, enough that the sum of is equal to or larger than transaction.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    based on how fast you want to send it. some wallets just do the choice of speed and calculations for you.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You could send to multiple wallets that you own. Make it look like you sent to other users.

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#2794

1 Balance

2 refused transaction

3 Input minus output equals fee~

4 Having other wallets or accounts and sending to my self in separate outputs besides the actual payment or transaction i meant to do in first place

#2795

You can always try to combine multiple smaller utxo’s together to cover the amount. Only if the sum of all your available utxo’s aren’t enough to cover for your transaction, it will be invalid

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#2796

But keep in mind that you can have multiple utxo’s. If you got paid twice an amount of bitcoin, you will have 2 separate utxo’s. You wallet will sum up all utxo’s your keys can spend as your balance.

If you don’t have a single UTXO big enough to cover a transaction, you can combine multiple smaller utxo’s together in the input of the transaction.

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#2797

It doesn’t always have to be change. If someone send you an amount of bitcoin, it is also an UTXO you can spend later on.

You can first try to combine multiple smaller utxo’s together to cover the amount in the input of your transaction. Only if the sum of all your available utxo’s aren’t enough to cover, then you can’t send this transaction

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#2798

Yes, and technically, the transaction fee is the total amount of the utxo’s in the input minus the total amount of the outputs.

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