Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#2900

A UTXO is the amount of BTC available for transaction

If you don’t have a large enough UTXO the transaction will not be accepted by the blockchain

The wallet app will automatically select a fee for you or some wallets will give the user a selection a fees

The transaction difference or remaining balance can be sent to a new address

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#2901
  1. Your Bitcoin balance “in” the wallet, or the transaction sent from one address to another, which would become the second address input.
  2. Transaction would get rejected.
  3. It specifies the best fee that would get the transaction into the blockchain.
  4. You can use one transaction to send to different output addresses.
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#2902
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Ans: They are the inputs in your wallet that are unspent and can be used by the private key
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Ans: The transaction would be rejected by the nodes
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Ans: It will look at the blockchain and figure out a transaction fee that will enable the transaction to go through effectively.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Ans: Refrain from using the same address to send outputs. You can mix and match by using the concepts so that no hacker can link you to your public key.
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#2903
  1. UTXO’s are unspent transaction outputs, they become inputs when they are spent by the User who received them. Your private key uses these UTXO’s to create new UTXO’s when creating new transaction this turns the former UTXO’s into inputs.
  2. If you don’t have a UTXO to cover a single transaction then your wallet will utilise other UTXO’s to complete. These UTXO’s then become inputs. The surplus funds from the other UTXO’s then become a UTXO that is sent back to your own wallet.
  3. Wallets propose fees based on effective previous transactions.
  4. If you use multiple addresses as outputs.
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#2904

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO’s are unspent outputs from previous transactions

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    it would not go through, however this is only the case if the sum of all UTXO’s doesn’t cover the amount.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It will first query the blockchain, then it will set the required fee. The wallet sets the fee depending on the amount you are sending, also sets the fee if there is an option to do so.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? By increasing the number of wallet addresses, input and output addresses increases privacy in the transaction.

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#2905

1)Unspent amount from previous transactions.

2)Add up the other UTXO’s in your wallet until you have enough. If you don’t have enough it would be discarded.

  1. Total inputs - total outputs.

4)Increase the number of outputs in order to make tracking more difficult.

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#2906

1:utxo´s are unspent transaction outputs.basically the balance of your wallet is determined by the size and number of your utxo´s.

2:depends on:if your balance is too low, your transaction will not go through. If you do have enough balance, more than 1 utxo will be used for that transaction.

3:they are implied, based on previous transactions. Some wallets offer you to pick the fees. The lower the fees, the more time is needed for the transaction.

4:you can use it by sending funds to yourself to a different address.

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#2907

  1. They represent the bitcoin you have received that you haven’t spent yet. If you add them up together they would give you your “balance”.

  2. You can combine multiple UTXO so that there is sufficient amount to cover your transaction. If after combining them there is UTXO left after fees it can be sent back to yourself (as change) within the same transaction. The sum of the inputs is the sum of the outputs plus fee.

  3. Some wallets offer you a choice others suggest a fee based on other current transactions that have taken place.

  4. An individual can control multiple wallets and can send to different wallets including his/her own wallets. You cannot see in the blockchain to which individual a wallet is registered.

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#2908

Homework on Bitcoin Transactions and UTXO - Questions

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    1R.- UTXOs Are transactions incoming to your private key with an amount of bitcoins that you can use in new transactions.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    2R.- You use more than one transaction to cover the total amount + fees and get the difference back to you.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    3R.- It’s going to be calculated in the monet of the transaction some wallet offer options to choose, some other choose for you the best option available at the moment of the transaction.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    4R.- using different addresses for the amount that I am not spending.

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#2909

You can also use different addresses within the same wallet. :slight_smile:

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#2910

  1. Unspent Transactions Outputs are transactions that were sent into the wallet but have not been sent out of the wallet.

  2. The wallet will add multiple UTXO together to make an amount large enough to cover the transaction.

  3. The wallet will subtract the outputs from the inputs to determine the fee.

  4. As I see it. All transactions are visible to everyone and will be forever. If you wanted to use multiple outputs to send/return funds to different address or wallet that you control within the same transaction, it could make it confusing for anyone trying to track it. But the transaction an all address will be able to be seen.

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#2911
  1. UTXO - Unspent Transaction Outputs. are transfers of bitcoin that are inputs for the recipient and outputs for the spender.
  2. Your wallet will combine UTXOs until there is enough to finance the transaction. If there aren’t enough… Access Denied!
  3. By polling nodes to see what the going rate has been.
  4. Using multiple wallets could obscure the source, but not completely hide it.
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#2912
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    A: The amount of digital currency you are able to spend.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    A: You would have to use other UTXOs that you own, if you have them.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    A: you would take the input minus the output and that would give you your tx fee.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    A: By sending UTXOs to multiple places, including back to yourself, it will generate a new UTXO thus making it harder for someone to tell which ones goes back to you.
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#2913
  1. UTXOs are tracked by your wallet. The some of them is the balance of your wallet.
  2. The TX will be declined
  3. Fees =UTXO – TX input
  4. If you have some UTOXs left after sending BTC to someone. You could send the money back to yourself by creating another UTXO to a different address controlled by the same wallet
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#2914

1 Describe what Unspent Transaction Outputs (UTXO) are.

UTXO are the balance of what’s left in and tracked by your wallet.

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 declined.

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

It checks the blockchain to see wha to charge so your transaction would complete in a resonable time.

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

Try to use many inputs and outputs to make it hard to track the source and destination of the transaction. But, this can be circumvented by the use of good software tracking tools. It would be better to use a privacy coin.

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#2915
  1. This is the amount of btc available on my wallet/pvt key
  2. My wallet will combine the utxos and send the balance back to me.
  3. By looking at recent fees, and suggesting a fee that will allow to process the tx in a reasonable time.
  4. Use different adresses.
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#2916
  1. The UTXOs are the transactions that you have received (that you have in your wallet) and you have not spent.
  2. It will sum all the small UTXOs and if the output of UTXOs is enough then the transaction will be processed (including the fees that are automatically calculated by the wallet).
  3. It looks at the recent fees on the blockchain and proposes you the new fee.
  4. Creating new outputs to every input you sent
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#2917

Coins are not in your wallet they are on the blockchain. Its more correct to say they are available to your wallet. :slight_smile:

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#2918

If you don’t have a single UTXO big enough, you can use 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, the transaction will fail

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#2919

  1. UTXO - determines how much there is in your wallet for you to spend by comparing it to the wallet input and calculating the difference for what is being output.

  2. Your wallet will review all UTSO available and construct as many transactions required that allow you to spend only what you have available in the wallet (as compared to the inputs received and available in the wallet).

  3. The wallet will add all the outputs and fees together so that the total equals the total inputs.

  4. Privacy could be increased by breaking the UTSO into many smaller transactions to multiple wallets that someone controls.

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