Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#2880
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • Unspent transactions are the outputs received from other addresses. These will then be used as inputs when you create a transaction.
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • Your wallet will use multiple UTXO’s
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • Inputs = Outputs + Transaction fee
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • Transaction inputs and outputs can be used to increase privacy in transaction by using an input in a transaction that has one or more outputs that sends funds to a wallet controlled by the same person who makes the transaction. In other words, you can send funds to yourself without this fact being evident in the transaction.
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#2881

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Is the remaining value of transactions inputted in an account and outputted from.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    The wallet will add the UTXO’s to produce a value to cover the transaction and reject if the total is not able to cover

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

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Having multiple wallets or addresses would increase privacy

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#2882

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO’s are the records of the balance of BTC I can spend. It’s the input in the transaction.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    I would use multiple UTXO’s to construct the transaction and send the balance of the UTXO’s back to myself and to a wallet that I control.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The wallet would construct the transaction add up the output UTXO’s and subtract the mining fee from them returning the remainder UTOX to a wallet address that I control.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Because both the input and output UTXO’s are hexadecimal they are by default anonymous. In other words all the public sees on the ledger is the public wallet keys plus the hash.

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#2883

(1) UTXO = transactions you have received and not yet spent --> those can be spent.
(2) The transaction would be invalid. Therefore not sent by the wallet and not accepted by miners.
(3) Fee = input minus output.
(4) Generate new addresses for outputs.

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#2884
  1. The UTXO the unspent transaction output is the transaction that you received from others that are stored on the blockchain converted by the wallet so it is more readable. the output is the process of transferring bitcoin to another wallet with a fee and then transfer the remaining fund back to your wallet.
  2. The transaction won’t be made.
  3. The fee is the total input minus the total output.
  4. They are private and nobody knows anyways who did the transfer, but you can use multiple outputs and inputs.
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#2885
  1. is the input transactions that you dont make it output trasactions.
  2. the transactions will not made it.
  3. input transactions minus output transactions
    4.to increase privacy make more output transactions
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#2886

!. UTXOs are outputs from previous transactions sent to your wallet. The sum of unspent outputs is your balance.
2. The sum of UTXO is used to cover the transaction. The change is therefore still your UTXO.
3. The wallet can propose a transaction fee by querying the network and determining what the current fees are and choosing one that is quick. Some wallets let you decide on the fee. Input - Output = Fee.
4. Sending the output to different addresses

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#2887

Describe what Unspent Transaction Outputs (UTXO) are.
Unspent Transaction Outputs are bitcoin balances that have been sent to you, for example if someone sent you 0.1 BTC then you would have a UTXO of 0.1 that you are able to spend.

What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
You will take all the UTXO’s that you’ve ever received, send them all in a single transaction and you will send the change back to an address that you control.

How would a bitcoin wallet specify the transaction fee when creating a transaction?
A bitcoin wallet would give you the transaction fee by taking the transaction input and subtracting the output to then give you what the TX fee will be.

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You are able to send to many different output addresses, therefore you can send your remaining change bitcoin to a different bitcoin wallet address that you own. Your identity is not linked to the wallet so it can be very difficult to keep track if someone is sending themselves bitcoin to a different address and using it in transactions on that wallet.

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#2888

UTXO’s are inputs that haven’t been spent.

If you do not have a single UTXO that is large enough to cover a transaction the sum of smaller UTXO’s will be used, if this is not enough then the transaction is invalid.

The tx fee is input minus output, the wallet determines a fee that will get the transaction added in a decent amount of time.

The use of multiple outputs, including “change” returned makes it more private.

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#2889

Making more transactions wouldn’t help in case you would be sending the funds to a new address. Did you mean more outputs within the same tx? :slight_smile:

#2890

You don’t need to spend all UTXOs, just enough to pay for the tx. :slight_smile:

1 Like
#2891

ohh yeah I see now, Thanks for the clarification! I must’ve misunderstood from the example only being 2 UTXOs and needing both to cover for the payment of the bicycle. Thanks for the help! :slight_smile:

#2892
  1. UTXOs are the outputs from transactions that haven’t been spent, future inputs.

2.The transaction wont happen at all

  1. Inputs = Outputs + fee

  2. Using multiples outputs

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#2893
  1. Describe what unspent transaction outputs (UTXO) are.

UTXOs are all the inspect funds in your wallet. They are made up of all the outputs that have been made from sending transactions to the wallet address.

  1. What happens if you don’t have a single UTXO that is large enough to cover your transaction?

If the wallet does not have a large enough UTXO to pay for a transaction it will combine your UTXOs until the transaction can be covered. Any amount over the transaction price will be sent back to the wallet as a new output.

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

The transaction fee is the difference between the inputs and the outputs of the transaction being made. Some wallets will allow you to manually suggest a fee while others will look at previous transactions and suggest a fee for you.

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

You can own and use multiple addresses when conducting transactions, these addresses do not have personal information linked to them. When a transaction is made you can send part or all of your transaction to these addresses essentially mixing the bitcoin and increasing your privacy.

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#2894

[quote=“ivan, post:1, topic:8436, full:true”]
Homework on Bitcoin Transactions and UTXO - Questions

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    They are the sum of inpouts that have yet to be “spent”
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    THe wallet will create a sum of all UTXos
  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?
    total output = total input so you cannot be sure who the transaction is for
#2895

Thanks I’m a beginner and just been in this world of crypto for only 6 months and I try to understand and educated my self in this academy :grinning:

#2896

You don’t need to spend all UTXOs, just enough to pay for the tx. :slight_smile:

If your output would equal to input it would mean you wouldn’t pay no fee to the miner, why would that increase privacy? :slight_smile:

#2897
  1. A UTXO is the remaining balance from a transaction input minus fees.
  2. the OTXO is summed as a transaction input and the entire amount is spent then the remaining balance is returned minus the fees.
  3. A bitcoin wallet will provide an estimate of gas price and maximum gas spend but this can also be specified programmatically.
  4. By by sending UTXO’s to an unknown wallet one can obfuscate who the owner of a particular output is.
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#2898
  1. The sum of you UTXO’s are your wallet’s balance, or the transaction amounts you have received but not yet spent
    2.The transaction will not be accepted by the network.
  2. It should be stated on the transaction page prior to sending the transaction
    4.Make use of different wallet addresses when receiving crypto currency.
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#2899

  1. UTXO are transactions which have been sent from one user to an addressee but is sitting their waiting for its next direction.

  2. The the transaction is cancelled.

  3. It finds the difference between the Inputs and the Outputs.

  4. Utilizing additional and different address each time in each transaction.

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