Homework on Bitcoin Transactions and UTXO - Questions

[mrossman1973]

Unspent Transaction Outputs (or UTXO’s) are coins that were sent as transactions. As their input they have all the current unspent transactions associated with your bitcoin wallet and its outputs are other wallets you are sending bitcoins to, including your own. The inputs of the transaction should equal the outputs less the transaction fee.

Your wallet adds all your UTXO’s together. If you had enough UTXO’s when they are collectively added together the transaction would be processed. Otherwise the transaction would be rejected.

The transaction fee is implied rather than specified. The amount sent to the other accounts (including back to your own if there is any left over) will add up to slightly less than the sum of all the UTXO’s input. That difference is the transaction fee.

Since you cannot be sure who each output transaction goes to due to the encryption you cannot be sure what value of the UTXO’s output to yourself

[CryptoJedi]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXOs are transactions that are only on the blockchain, which your wallet queries to determine how much the balance is for your private key. There are no coins on the Bitcoin blockchain. Instead, there are UTXOs. When spent, your UTXOs become someone else’s UTXO.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   The blockchain will not allow the transaction to occur if your balance isn’t large enough, but if you have multiple UTXOs it will sum them all up and allow you to complete your transaction.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   It queries the blockchain to see what a reasonable price based on current network conditions the size of the transaction would be to complete the transaction in a relatively fast matter.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   You can send different amounts to different addresses owned by the same person so as to mask how much is received by that person.

[maxpower106]

1. Unspent transactions outputs are the blockchains way of recording funds that have been sent to a users address. They are unspent because the user is yet to spend the funds since they were sent to them.

2. The transaction would fail if you dont have a large enough UTXO

3. UTXO - UTXO input = Fee

4. You can use multiple outputs to mask transactions. Others can not tell if you are sending UTXOs to yourself or others when sending to multiple outputs.

[Rumplebitskin]

1.UTXO’s are the unspent balance in a wallet(address)
2 transaction would be ignored no transaction.
3 checking previous fees from previous blocks(total input - total output= fee)
4 use many outputs (addresses)

[Isaacbrennan]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   They are the total of the wallet.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   You would have to sent the unspent UTXO to another wallet that you own.

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

4. UTXO – UTXO input= the fee

5. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? Use many different address, mainly with the output to make it harder to figure out who the output goes back to.

[Alko89]

@William

4. ?

You can use a new address every time you receive funds or send the change back to yourself.

[Alko89]

@maxpower106

The transaction would fail if you dont have a large enough UTXO

@Rumplebitskin

2 transaction would be ignored no transaction.

@Isaacbrennan

You would have to sent the unspent UTXO to another wallet that you own.

You can use multiple UTXOs as inputs to a tx, if its still not enough though the tx will be declined.

[Cryptomech410]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   Its the remaining balance from the initial input which results in the OUTPUT. the next input will be the last UTXO,
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   If the UTXO is not large enough it has two choices first it will see if there is any other UTXO that they can combine to make enough for the transaction and if that does not work then the transaction will fail.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   The fee total it input - output but its a ever change amount. Once person fee might not be the same for the next its partially calculated by the demand on the blockchain. Heavy traffic on the chain leads to higher fees
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   If more privacy was wanted you can constantly use a different address but there is already a large amount of privacy since there is no personal data its just digits on the input/output

[nioctib]

1. Received data from a previous transaction stored in your wallet. This data makes up your balance and can now be spent.

2)Your wallet will attempt to add up other UTXO’s stored in order to cover your transaction. If the some added is not enough, your transaction will be rejected.

3. By subtracting the output from the input of the transaction.

4. I suppose in theory by creating several outputs, perhaps some being other wallet addresses you hold could somewhat increase privacy.
   However, people can still see the full transaction history of those addresses and may be able to put 2+2 together quite easily depending on how careful you have been with those addresses in terms of privacy.

[Gerard]

1.UTXOs are the unspent outputs from a previous transaction.
2.The transaction would be invalid or declined
3.The fee is calculated from the input minus the output, the balance is the fee.
4.Each input can result in several outputs and addresses.

[Nick_Roses]

1-received transactions are stored as utxos, which i can acces trew my private key
2 i wont be able to make a transaction
3 output minus input = transaction fee
4 by sending money back to myself on other adresses

[Alko89]

@Nick_Roses

received transactions are stored as utxos

They are the outputs of a transactions that are not yet spent, not transactions itself. Their sum represents the wallet balance.

@Gerard

2.The transaction would be invalid or declined

@Nick_Roses

2 i wont be able to make a transaction

You can use more UTXOs as inputs to a tx, if its still not enough, the tx will be declined.

[nathangray]

1. UTXO are how the blockchain ties transactions to your private key. You can almost think of it as your balance. In regards to your wallet your UTXO represent how much bitcoin you can spend.
2. You would not be able to make a transaction. Your input transaction can’t be less than your output in the block transaction.
3. It would or should find you the most efficient fee in regards your transaction, taking into consideration speed of transaction.
4. You should feel good that your transaction cant be duplicated or double spent. Because there is only a one way street in your transaction meaning your transaction can only be an input and that your UTXO cant be spent without your permission. Also you cant tie your transaction directly to you when looking at the blockchain it is all numbers with no significant identifiers to you.

[Daniel_Maurrasse]

1. A UTXO are unspent outputs of the previous transaction.
2. If you are trying to spend more then your UTXOs
   the transaction would be invalid.
3. The fee is difference between Input - Output
4. Create different address each time you do a transaction, all of the Bitcoin will be moved to that new Address (minus the fee or payable amount)

[Tokenomist]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   Unspent funds in your wallet
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   Transaction will fail because you need to have enough UTXO to cover it. If you have multiple smaller UTXO wallet will anex them in one big enough tranaction.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?

Wallet check´s from the blockchain what is current fee for transaction to go thru quik enough and pick´s it. In some wallet you can choose the fee manually.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? By using different input and output adresses

[RoryPhilBTC]

1. A UTXO is an outcome of a previous transaction that remains unspent and can be used in future transactions. Basically the change left over.

2. The wallet would use other UTXOs to make up the amount needed to complete the transaction and pay the fees.

3. The wallet will specify the transaction fee based on the input minus the output and will use a bigger amount of UTXOs to make it go faster into the blockchain to increase the incentive of the miners that make the transactions possible.

4. You could use more inputs and outputs. For example, you can use many UTXOs and send to a couple different addresses and the balance come back to one of your addresses.

[Alko89]

@nathangray

UTXO are how the blockchain ties transactions to your private key. You can almost think of it as your balance. In regards to your wallet your UTXO represent how much bitcoin you can spend.

The sum of your UTXOs is your balance.

@nathangray

You would not be able to make a transaction

Therefore you can use multiple UTXOs as inputs to a new tx. If its still not enough then you won’t be able to make a tx.

@nathangray

Also you cant tie your transaction directly to you when looking at the blockchain it is all numbers with no significant identifiers to you.

What about when you withdraw from an exchange where you did KYC?

[hodltimo]

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

Funds you received (= funds that you can control with your priv. key) that sit and wait to be moved in a potential next tx.

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

Then you need to find another UTXO that you can control with your priv. key that can be used to cover the tx you want to create.

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

Input UTXO = Output UTXO + fee
–> fee = Input UTXO - Output UTXO

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

You can send a tx to a new wallet of which nobody knows that you control the priv. key. Additionally you pair this tx with other txs.

[iceman12276]

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

They are the output or the funds you receive from the input( the sender of the currency).

2.What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? Well your transaction would not be validated by the nodes therefore it would be declined.

3.How would a bitcoin wallet specify the transaction fee when creating a transaction?
By subtracting the input by the output

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

Well it doesn’t record who is sending who money or what exact data is stored with the transaction.

[TomDrones]

Homework on Bitcoin Transactions and UTXO - Questions

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXOs are received transactions to addresses which have not been sent. They are tracked by the blockchain.*

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   If the user does not have a single UTXO to cover the transaction the wallet will not create the transaction; however, if you have multiple UTXOs within your wallet it will string them together to total the entire transaction cost and allow you to send it.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   The bitcoin wallet would specify the transaction fee based on the user’s time preference to have the miners put that transaction into a block.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   Transaction inputs are equal to the outputs minus the transaction fee, so it can increase privacy because it is unknown which or if any of the outputs are controlled by initial sender of the transaction.