Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#261
  1. Basicaly they are deposits
  2. The tx could not initiate
  3. Input -output
    4.By sending a tx back to self
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#262

Got it makes perfect sense thanks man :pray:

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#263

  1. Unspent Transaction Outputs (UTXO) are the ballance of your address, basically how much output you have left to send.

  2. The transaction will be found invalid by network participants and then ignored by miners (not added to the blockchain as a valid trx).

  3. (FEE = input - output) wallet finds information about average fee at the time of the transaction from the current data on the blockchain.

  4. You can easily create multiple addresses and then switch between them or even always use a new one so it’s harder to trace back to you.

#264

  1. Unspent transaction outputs. When you receive a transaction it remains a UTXO until it is spent.

  2. The transaction will fail when you try broadcasting it to the network.

  3. The input minus the output of the transaction.

  4. You can send transactions to yourself.

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#265
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXO – Are the sum total of unspent bitcoin transactions in your wallets balance

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

When a single UTXO in your balance is not enough to cover your transaction 2 or more UTXOs are combined to cover it. If there is unspent sum left from the transaction it is sent back to your balance.

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

Fees are determined from the previous transaction fees on the blockchain

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

When transactions are down each block may have a number of transactions written to it. The y are not associated with an user thereby making each transaction relatively private and anonymous.

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#266
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXO stands for Unspent Transaction Output. Every bitcoin transaction has inputs and outputs. In order to figure out how many bitcoins a specific wallet is able to spend, the wallet will simply track UTXO and sums up all the UTXOs.

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

More than one UTXOs will be used to cover for your transaction.

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

A transaction fee is simply total inputs minus total outputs.

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

During a bitcoin transaction, bitcoins can be sent to multiple other wallets as well as back to the sender’s wallets. For an outsider’s perspective, it is hard to figure out how many bitcoins has been sent back to the sender’s own wallet.

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#267
  1. UTXO is the output of a transaction that the user receives and is able to spend in the future as an input in a future transaction.
  2. If you don’t have any single UTXO that is large enough to cover for your transaction, then the wallet will combine other UTXO’s until it can cover the transaction. If there are enough UTXO’s the transaction happens, if there are not enough UTXO’s to cover the transaction then it will not happen.
  3. A bitcoin wallet specifies the transaction fee by researching the blockchain to see the previous fees and propose a fee that it considers to be the best, which is one that will get your transaction into the blockchain reasonably fast. In some wallets you can choose it yourself.
  4. Since each address is private, I could increase the number of outputs, making it very difficult to know which amount goes to which address.
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#268

Homework on Bitcoin Transactions and UTXO - Questions

  1. Unspent Transaction Outputs (UTXO) are those funds, which come from another wallet into your own wallet, without having it spent yourself (= being sent to another wallet)
  2. If you don’t have any single UTXO that is large enough to cover for your transaction, then you either have to combine 2/3/enough UTXO’s which CAN cover the transaction, or you simply cannot make a transaction due to insufficient funds.
  3. A bitcoin wallet would specify the transaction fee when creating a transaction by lessening the output from the input. The outcome from input - output ALWAYS has to be positive.
  4. You could use the notion of transaction inputs and outputs to increase privacy in your transaction by making more than 1 wallet address which belongs to me. The transaction go to different addresses but since I am the owner of both of them, I can “split up” the UTXO’s without losing / spending them.
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#269

Homework on Bitcoin Transactions and UTXO - Questions

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

The UTXOs are the unspent or incomplete transactions that are still Associated with my wallet

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

My wallet would calculate the transaction and inform me of the potential unavailability to complete transactions. If I proceeded with insufficient UTXOs transaction is typically declined from processing.

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

The wallet would communicate with the network and give me an approximate fee then I could see if I have enough in UTXOs to complete transactions.

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

Using multiple outputs it would very difficult to actually see who is the recipient of such transactions

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#270

Homework on Bitcoin Transactions and UTXO - Questions

1.Describe what Unspent Transaction Outputs (UTXO) are.
When we say that a user ‘received’ bitcoins, what that means is that user’s wallet has detected a UTXO that can be sent (spent) from the keys controlled by that wallet. In this way, the ‘balance’ of a wallet is the balance of all UTXO that can be spent from that wallet.

  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    My wallet don’t chose one UTXO to cover a transaction, instead the wallet checks all available UTXO’s on the blockchain and joins them together to form my balance. If it covers what you want to spend, it sends all my UTXO’s back to the network sending the amount to spend, and the rest, excluding the fee, is sent to an address corresponding to my private key forming a new UTXO.

3.How would a bitcoin wallet specify the transaction fee when creating a transaction?
A bitcoin wallet checks the fees that have been paid recently to assign a fee that will be met by the network in a natural time frame. However, in some wallets it’s possible to assign the fee we wish to pay.

4.How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
When we send a bitcoin transaction, we can send to multiple wallets, as well as resend to ourselves. For outsiders, it is difficult to know how many bitcoins are in our wallet.

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#271

  1. Unspent transactions outputs are transactions you already received from others on the network which you haven’t spent.

  2. If you don’t have enough UTXO to cover for your transaction then it cannot execute transactions on the network.

  3. Wallet specify transaction fee by determining how fast you want to send it , example normal time takes longer but cheaper or as fast as possible to reach the recipient but a bit expensive. But some wallet will just calculate by itself and then you just have to sign it if you agree.

  4. To increase privacy using inputs and outputs means you will need to create many inputs and outputs and generate new addresses every time you receive funds. On BCH chain you can use cash shuffling protocol to increase privacy through coins mixing, I haven’t try it myself because its a new development worth exploring.

#272

  1. UTXO is bitcoin that we own. So sum of all UTXO’s that are addressed to us is our bitcoin balance we can spend.

  2. Transaction wouldnt be created unless we have multiple UTXO’s whose sum can cover for it.

  3. Fee= Input - Output

  4. By having multiple output adresses.

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#273

  1. Unspent Transaction Output is an output of an transaction not been spent, or if you want, as input to a new trasaction on the blockchain.

  2. The transaction will not be approved.

  3. Input=Output + Transaction Fee

  4. Several outputs can result from one input

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#274
  1. UTXOs are unspent amounts attributable to a private key and are used as inputs for subsequent transactions.
  2. A wallet would use two or more UTXOs as the input for the transaction such that the sum of the individual UTXOs exceeds the transaction amount plus the fee. If the transaction amount exceeds the sum of the UTXOs plus the fee it will fail.
  3. The wallet will calculate a fee based on recent transactions and in some cases the user can adjust this suggested fee. The fee is not specified in the transaction but is implied by the equation: sum of inputs = sum of outputs.
  4. I could include an address of my own in the transaction such that an observer would be under the impression that I have parted with more than is the case.
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#275

  1. UTXO is the output from a transaction. This is unspent and tracked.

  2. You can use multiple utxo’s to cover your transaction.

  3. The wallet checks various fees and determines what it believes to be the best fee.

  4. Use different address eacb time you complete a transaction.

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#276
  1. UTXO are transactions that were sent to the wallet but were not spent. They can be used as an input for new transactions.
  2. If a single UTXO isn’t large enough to cover for the transaction, then the wallet will use a second, a third, etc until the total is greater than or equal to the amount to be sent. If the sum cannot be greater then the transaction is not valid.
  3. The bitcoin wallet would check blockchain’s activity level and provide an acceptable fee, to make sending the transaction possible.
  4. To increase the privacy one could use multiple outputs since it will be harder to trace how many outputs belong to one person.
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#277
  1. UTXOs are unspent txs. Basically amounts that are not currently being sent or received in a tx hash. These are “coins” in a wallet
  2. The transaction would still go through so long as you have enough cumulative utxos to cover your output + fees. If not, the tx would not process.
  3. It specifys by subtracting the outputs from the inputs and that’s the fee.
  4. You could use a mixer which would spread utxos into several hundreds or thousands of txs to several hundreds or thousands of outputs, or vica versa.
#278

  1. a UTXO is like your bank balance i.e. it is the total of unspent inputs into your wallet.

  2. If a single UTXO is not enough to cover the expense, you would either have to add another UTXO absent which, the transaction would not go through. Like buying a $2 chocolate with a $1 bill - would not be able to purchase the chocolate bar unless I had >$2 i.e. additional UTXO’s.

  3. A Bitcoin wallet specifies a reasonable transaction fee based on previous and current transactions. It happens automatically although it can also be manually set on some wallets.

  4. All addresses are nothing but hashes which in themselves, are anonymous to begin with. However, increasing the number of my addresses can obfuscate my identify even more

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#279

UTXO’s are outputs of previous transactions. The sum of UTXO’s which are under the control of your private keys is your balance. This can be one large (hopefully) UTXO or multiple smaller UTXO’s. Normally when our wallets shows the balance we don’t see all the individual UTXO’s underlying that.

If you make a transaction your wallet will assemble multiple UTXO’s which are sufficient to cover the transaction plus the miner fees. Any part of the input UTXO’s not used for the transaction or the fees becomes a new UTXO back to you.

A wallet specifies the fee based on fees paid in recent transactions to ensure your TX gets included in the blockchain in a timely manner. “Bad” wallets do not allow the user to control this but some newer wallets allow the user to specify, fast, medium or slow or even put a specific fee per byte depending upon the current state of the mempool and how quickly you need the transaction to go through.

Understanding the concept of UTXO’s allows you and those you transact with to be more private by having multiple outputs some of which are to the real recipient and others to addresses that you also control.

This lesson helped me understand “dust.” A wallet that minimizes the accumulation of small residual UTXO’s would be really important.

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#280
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • Outputs from a transaction you haven’t spent yet “A form of credit” or “IOU”
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • The transaction would check if theres other UTXO’s that will minimum cover the transaction, if not TX will be declined
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • TX_fee = Input - Output
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • One input can generate multiple output addresses
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