Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#2839

In the next lesson I understood that it makes no sense if in any case all available UTXOs are used, because it will just blow up the size of the transactions - which results in a higher fee (bytes/sat). So the wallet will just combine as less UTXOs as possible and I think also the variation of the smallest difference to the spending amount.

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#2840

Why would a miner need to know you have a private key? All a miner does is put valid transactions in a block. :slight_smile:

#2841

Hey, glad you figured out yourself :raised_hands: sorry I didn’t notice your question. You are right, your wallet will combine just as many UTXOs as it requires to make a tx. :slight_smile:

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#2842

UTXOs are the amount of unspent input transactions of the wallet. In simpler terms, how much BTC you have available in the wallet.

Then two or more UTXOs will be added as inputs until the sum is big enough, the remainder of the transaction after fees will be transferred back to the wallet.

The fee is implied from previous transactions in the blockchain.

Anonymity is achieved by the fact that no one knows what adresses in the output are the true receiver of the transaction.

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#2843
  1. UTXO are all your funds what has not been sent to different addresses yet.

2.The transaction will be rejected and not going to be part of the blockchain.

3.Most of the wallet automatically check previous fees and trying to found the best possible price for a relative soon occasion for you.

  1. Well all transactions are belong to addresses and fully transparent ,however those are could any ones ,as KYC not integrated.So there are only codes you can track.And there is no coin in your wallet,only inequality of inputs and outputs.Also several input and output variety possible what is make it harder to fallow any fund.
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#2844
  1. It is the “balance” that a certain private key has which can be used as input in a transaction by the same private key.
  2. Gather more UTXOs to cover all input.
  3. Based on the difference between inputs and outputs.
  4. Use multiple output addresses.
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#2845

The miners are validate the transaction by using digital signature what include your private key as well. Am I right?

#2846

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    These are transactions that your wallet can find in the blockchain and use them as input for your transactions.

  2. What would happen if you don’t have any single UTXO that is large enough to cover your transaction?
    You can make the transaction because you don´t have enough funds for it, also you have to have funds to pay the transaction fee.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Input = Output + fee TX

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You can send transactions from a wallet to multiple addresses.

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#2847

1.UTXO is the unspent amount of fund left in your wallet( the current balance).
2. Would not be processed declined.
3. Fee= input-output
4. It provides new addresses that promotes privacy in the output so it is nearly impossible to trace back with the hashes used in the addresses.

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#2848

All nodes in the network are doing that. And you only need the public key to validate a signature. :slight_smile:

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#2849

You can have multiple utxo’s on 1 bitcoin address. So 1 utxo isn’t necessary the whole balance.
But address reuse is not wise. In the early days of bitcoin, it was very common. For example a donation address.

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#2850

  1. Utxo are outputs from other transactions , in other words the utxo in your wallet is your balance.

  2. Doesnt need to be from a single utxo for the transaction to happen as your wallet will add your utxos. Now if you dont have enough utxos to cover it the transaction will be denied.

  3. The wallet work out the difference between the inputs and outputs.

  4. Creating new addresses for when receiving .

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#2851

  1. An unspent UTXO is a transaction that is received (input) in a wallet from a sender (output)
    This UTXO is unspent and hence is reflected as available funds in a wallet

  2. Then you cannot proceed with the transaction

3.The bitcoin wallet will scan the blockchain for recent transactions and usually specify an average of the recent transaction fees for you to get you into the block soon enough

  1. As your wallet address is private, your transaction cannot be traced back to you if you have kept your wallet address private. This ensures a level of privacy when sending and receiving funds on the blockchain.
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#2852

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Transactions which have have not been spent. The total of UTXOs is the balance of a wallet

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    It will be declined. But it can use more than one UTXO to cover the transaction

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The wallet checks the blockchain for recent fees.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Use many inputs and outputs. or use different addresses for every transaction

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#2853

  1. They are the funds you have to spend. The blockchain keeps a record of the UTXOs that you have and your wallet adds them up to give you a balances of your funds available (UTXOs).

  2. If you don’t have enough UTXOs, there would be no transaction. If you have multiple UTXOs that you can add up to pay for the transaction, it would add them together, send a transaction to the recipient of the money then send back the change to yourself minus transaction fees.

  3. Looking at the previous fees on the blockchain to ensure our transaction will be picked by miners.

  4. Using many different addresses.

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#2854

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are the unspent transactions that have been sent to you 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?

Then you must spend more than one UTXO that combined is enough to cover your intended amount of output plus fees, and send the remainder back to yourself (like making change).

  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Determined by previous network transactions. The fee can be calculated by subtracting the input from the output.

  2. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? By utilizing multiple wallets/addresses since there’s no way of knowing who is the owner of the address.

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#2855
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • Transactions that were sent to an specific wallet address that are not spent yet , so it becomes wallet
    balance along with other UTXOs

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

    • Your wallet will get others UTXOs as well to build the transaction , so that all of them are equal or
      above to the transaction amount you want to transfer.

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

    • it usually gets the best fee for you based on previous blockchain fees , or it may let you specify the
      fee you wish to use (this depending on the wallet used)

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

    • For example , you could use different wallet address that you own as inputs/outputs , so that you send money to yourself and then use the final destination , so tracking may become harder since its using different transactions and blocks on the blockchain to reach the destination you wish.
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#2856
  1. The sum of all your UTXO is your balance to spend.
  2. It would uses more than 1 UTXO to spend on the transaction. If there is no more UTXO left to spend, the transaction will be rejected.
  3. The wallet will recommend a fee based on previous transaction in the blockchain. Fee= Input-Output
  4. You could use mutiple addresses to increase privacy.
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#2857

UTXO is/are bitcoin tx you can spend.

Your tx will ge rejected.

Depending on the current fee structure and how fast you want your tx be, it will be deducted from your input.

You can probably increase privacy by creating more tx and wallets.

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#2858

You don’t need to create multiple transactions. Using a new address each time you receive funds is good enough for achieving basic privacy. Also sending the change back to yourself from a transaction to a new address. :slight_smile:

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