The inputs to a transaction are UTXOs. True that if you are creating a raw transaction that use use the hash of the previous tx, but in this case the hash is used as an id to query the tx data. The data of the tx also contains the address where the outputs of a tx was sent.
What happens in case you withdraw from an exchange where you did KYC? 
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- UTXO- Each transaction is a group of inputs and outputs. Since no balance is held in record on the blockchain, UTXOs logs all inputs and outputs so my wallet can compute a balance for me.
Inputs from my prior transactions would be gathered together in order to make a sum large enough to cover the current transaction.
A BTC wallet subtracts the fee from the output portion of the unspent transaction that comes back to me.
I could create a spiderweb of crisscrossed transactions with portions of inputs and outputs going to and from various hosted wallets (apps), as well as, my hardware wallet at varied intervals and amounts.
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1. Describe what Unspent Transaction Outputs (UTXO) are.
Whenever a transaction is created, its output is an UTXO. Once the UTXO is used in a new transcation as an input, it is considered to be spent.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
It would use all of the UTXOs to construct the transaction and the difference (change) would be sent back to the sender. If the sum of all UTXOs cannot make it up for the transaction, the wallet would not allow it or the blockchain itself would reject it.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
Fee = Inputs - Outputs.
Wallets will check average transaction fee on the network and balance between cost and priority.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Different addresses could be used as outputs that belong to the same sender.
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- UXTO’s are the total amount of coins/tokens allocated to a wallet
- Your transaction will not be confirmed as a valid transaction
- It auto-calculates the difference between the input and output amounts, as well as checking the blockchain for previous feel amounts to ensure your tx gets confirmed at a reasonable time & cost.
- If you create multiple outputs per each input, the sheer amount of txs could help obfuscate what is truly happening to the naked eye. Chain analysis makes this pointless however.
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UTXO’s are the unspent funds you have available in your wallet after receiving them from a transaction. And which can now be used in new transactions as input.
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If your UTXO is not large enough to cover the transaction, the transaction will be invalid and it will not be confirmed into the blockchain.
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The transaction fee is the total amount of output substracted from the total amount of input. So “Fee= Input - Output”.
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You can send funds from one input via multiple outputs, maybe one or two of them with the intended recipient(s) and the other one(s) back to yourself.
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Hi,
So let me see if I understand this. The inputs of a transaction are UTXOs (unspent transactions) and they are represented by hash values that are used to query that UTXO. And the outputs of a TX (transaction) become UTXOs with new hashes that are again associated with appropriate private/public keys.
What is the actual transaction look like or the code? If that’s the right way to ask that, the UTXOs go into a transaction as input and come out as new UTXOs, what’s the place/code where this happens?
What is KYC???
Thanks!
UTXOs are Unspent TX Outputs, once you spend them they are used as inputs to a new tx.
You could just use a new address each time you receive funds or send change back within the same wallet.
You don’t need to use all UTXOs, you can pick just as much as you need to fun the tx.
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UTXOs are used as inputs in a new transaction. The outputs of that transaction are new UTXOs that can then be used in a new tx.
You can check the coinselection.cpp file to see this being done in the code.
You can also check out our Bitcoin programing 101 course that explains how transactions function in more detail.
Know Your Customer regulations that were introduced a few years ago that most centralized exchanges have to enforce.
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The sum of all UTXOs is the balance.
You can combine multiple UTXOs to fund the tx. If its still not enough, the tx will fail.
You are right. Thanks for the correction.
@Alko89, thank you for the addition. It applies to both a singular UTXO and a combination of multiple UTXO’s 
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Describe what Unspent Transaction Outputs (UTXO) are:
UTXO’s are the remainder unspent in a transaction. It is equivalent to the change you receive when you spend cash at a store. All of the inputs are included in a transaction along with the output (who you are sending money to) and the UTXO’s are the remaining balance (ignoring fees). -
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
My wallet would check to see if I have any other UTXO’s that can be used to cover the fee of the transaction. If not the transaction would be rejected by the nodes as you don’t have enough inputs to process the transaction. -
How would a bitcoin wallet specify the transaction fee when creating a transaction?
A bitcoin wallet would find the difference between the inputs and outputs of the transaction. This difference is the fee paid to the miners. -
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You could have multiple outputs on the transactions that you make where many of the outputs could be sent back to yourself. Nobody but the owner of the private keys knows where the addresses are which allows for stronger anonymity. It can be difficult to tell what outputs are being sent to other users and which are UTXO’s.
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- UTXOs are trasnactions what you dont spend, they are under the controll with your private key on your wallet.
- I sepnd so mutch UTXOs what is neccesarry to cover transaction if i spend more deifferent between Input and Output come back to my wallet.
- Inputs = Outputs + TX fee
- I can use defferent adresses.
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It’s the money you have in your wallet.
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TX won’t go through.
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It’s the difference between the input and output.
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Use different addresses to send money.
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UTXOs are the unspend money that is available to you. UTXOs are the outputs of some transactions where the transaction output was directed to you.
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The transaction would decline as there are not enough money to spend.
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Bitcoin calculated the transaction fee as sum of input money - sum of output money.
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Multiple input address can be generated for same wallet and multiple output address can be generated for same wallet. In this way, people can distiniguish between the input users and output users.
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1.UTXOs are a collection of transaction inputs into a holders wallet that have not become outputs yet.
2.Transaction will be rejected
3.It looks at the blockchain’s recent history of fees to determine a fee that would allow the transaction to reach the blockchain in a timely manner
- Using differently wallet addresses to mix and match outputs from inputs may help increase privacy.
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The sum of all UTXOs is the balance in your wallet.
You can use multiple UTXOs as inputs to a tx. If its still not enough the tx will be rejected.
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UTXO’s are inputs that have been received and are sitting in a wallet. Each UTXO represents an amount of Bitcoin. A UTXO is sent from a wallet to a receiving address when Bitcoin is being spent.
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Multiple UTXO’s will need to be combined. The remainder can be sent back to your own address.
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The wallet determines an appropriate fee based on recent activity on the blockchain.
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Multiple input/output addresses can be generated for a single wallet.
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- Unspent outputs, basically your balance in the ledger from previous transactions.
- It will select the fees that would get you onto the block the fastest. The fee would be listed alongside the output in the ledger which you can see online on a block explorer.
- Inputs and outputs can have many origins and destinations. I would think that if you have more than one wallet you could increase your chances of it being traced back to one single origin.
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