Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#301

Homework on Bitcoin Transactions and UTXO - Questions

Describe what Unspent Transaction Outputs (UTXO) are.
UTXOs are responsible for beginning and ending each transaction. Confirmation of transaction results in the removal of spent coins from the UTXO database. A record of the spent coins still exists on the ledger.

What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
Either it’s confirmed and the Bitcoin or Satoshi’s have exchanged hands, or it’s unconfirmed and the money is still in the sender’s wallet. If a transaction is never confirmed, the Bitcoin or Satoshi’s are still the sender’s.

How would a bitcoin wallet specify the transaction fee when creating a transaction?
Transaction fees are calculated by Fee = Input – Output which are included with your bitcoin transaction in order to have your transaction processed by a miner and confirmed by the Bitcoin network.

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You will need to create different addresses for each transaction and all remaining satoshi’s will be moved to a new address minus the transaction total and fees, the address are not link to a single person so it would be hard to try and link unspent transaction but not impossible, if you want to be totally anonymous then you should be looking at using a privacy coin instead of BTC.

#302

  1. UTXOs are outputs from transactions. They are stored on the blockchain in such a way that only the recipient controlling the private key can claim them.

  2. Multiple UTXOs will be combines into one transactions.

  3. It is not explicitly specified. It can be calculated as the difference between the input and the output.

  4. By using a different wallet address for the amount that gets sent back to you.

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#303

  1. UTXO is payments that a wallet has received that haven’t been sent on to another wallet yet.

  2. The transaction wouldn’t be verified.

  3. Input minus the output specifies the key.

  4. Use a BTC Tumbler? Use a different address

#304
  1. UTXO is the “balance” of your wallet
  2. The transaction would not be valid.
  3. The wallet calculates a reasonable fee.
  4. By creating different addresses
#305

  1. your wallet consists of different UTXO’s of different value, this is your wallet balans. They are your received inputs. Each UTXO can be compared to a banknote with a specific value. To make a transaction of eg 0.2btc, you must have at least 1 UTXO in your portfolio of at least 0.2btc + tx fees. If not you have to spent a few UTXO to cover the complete tx incl. fees

  2. if there is not enough funds, or UTXO’s in your wallet you cannot execute the tx at all
    in some cases you can try to reduce your tx fees at the expense of the tx speed.
    if I have not understood this question correctly, please see answer to question 1

  3. the wallet checks the blockchain for the correct tx fees. You can find out on blockchain.com how much the tx fees are by either subtracting the total output from the total input, or simply reading it in the fees box

  4. in my opinion you can’t because every tx is traceable but you could make it more difficult by using multiple addresses

#306

Answer:

  1. UTXO is the number of bitcoins you can spend in the next transaction. It is coins (money) you own inside your wallet. A wallet can use those UTXOs for new transactions. There can be more than one UTXO assigned to the private key that your wallet controls.
  2. You won’t be able to create a transaction that would be accepted by the Bitcoin network. You have no coins. ( I am not sure about this one since I don’t understand the question fully)
  3. A bitcoin wallet looks on the network and looks for the previews fees and calculates a fee that is a reasonable amount so that it will be added to the bitcoin ledger promptly.
  4. You can create an output that is an input to an address that you control. You can split that output into a transaction with an output that goes to someone else, and the other transaction goes to your own address.
#307

  1. UTXOs are what you’re wallet can send as outputs

  2. Your wallet would use multiple UTXOs and your wallet would receive back the leftover.

  3. inputs - outputs = fee

  4. Having multiple UTXOs linked to multiple addresses.

#308
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • UTXOs are the unspent transactions output, which are like your “coins” in your wallet.
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • If you don’t have a single UTXO that is large enough to cover your transaction, the miners will not verify your transaction and it will remain in an uncertain state; thus the mining process will need to be repeated.
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • A bitcoin wallet would specify the transaction fee when creating a transaction by subtracting the total input UTXOs by the total output UTXOs.
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • By using a different address when the UTXO outputs are being distributed
#309

  1. UTXO’s represent the transition period from the output of one wallet, to the input of another before the funds are written into another transaction. They represent the “bitcoin you have in your wallet” that you can spend

  2. It depends, if you simply don’t have the adequate number of UTXO’s in your wallet you want to send then the transaction would be invalid. However if your wallet pulls all the UTXO’s from one of the inputs you received it can search the block chain for other UTXO’s you’ve received and accumulate them into one balance to fulfill the transaction you constructed

  3. It takes the difference of your UTXO’s and the total funds you are looking to send and creates and estimate based on what you’re getting back as “change”

  4. The more outputs in your transaction the harder it becomes to identify who send the transaction in the first place

#310

1.UTXO - is transaction that you received but is not spend.
2.you can’t spend your UTXO - transaction is not accepted by nodes.
3.input- output = transaction fee( the wallet calculates)
4.If you input goes to more outputs -than nobody knows if one of the outputs is yours again.

#311

You actually don’t send btc to a wallet, but you change the rights to wich keys can spend it.

When you don’t have any single utxo to cover the amount, it will first try to combine more smaller utxo’s you control.

#312

Thank you.

Regards
Mark.

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#313
  1. UTXO are the inputs that have not been used yet.
  2. you can’t make the transaction.
  3. The bitcoin wallet(depends on what kind) will look at the past transactions and fees and specify the transaction fee.
  4. use different addresses for each transaction
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#314

I was actually wondering if there is anyone checking our answers and helping out where needed. :slight_smile:

#315
  1. UTXOs are transactions sent to your wallet and available to be spent.
  2. The wallet sums up all UTXOs and constructs a transaction based on your total balance.
  3. The wallet automatically specifies a fee that is large enough for the transaction to be rapidly adopted by miners and ensures that the input equals the output + the fee.
  4. Although transactions are visible, the owner of the addresses are anonymous and thus privacy is ensured.
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#316
  1. UTXO’s are essentially payments you’ve received (inputs) that you haven’t spent yet.
  2. If you don’t have any single UTXO’s that are large enough to cover your transactions you will have to pool multiple UTXO’s together and remit the difference back to yourself.
  3. A wallet would specify the transaction fee by subtracting the outputs from the inputs.
  4. You can use multiple addresses to increase privacy in your transaction.
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#317
  1. UTXOs are what you’re wallet can send as outputs
  2. Your wallet would use multiple UTXOs and your wallet would receive back the leftover.
  3. inputs plus fee with outputs, to get the tx
  4. Having multiple UTXOs linked to multiple addresses.
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#318
  1. utxo is basically the bitcoins at disposal in a wallet.
  2. Then you have to cover it from more than one adres or first transact from other adresses enough utxo
  3. The fee is the difference between what came in to an adress and what was spent.
  4. Use a private blockchain
#319

  1. Describe what Unspent Transaction Outputs (UTXO) are:
    It is the BTC in your wallet that you could spend.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    A sum of other UXTO’s would be used to cover the transaction if possible. Otherwise the transaction would be invalid.

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

  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Create multiple outputs for each input to increase privacy.
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#320
  1. Unspent Transaction Outputs are part of transactions that came to their destination, and are now available to become input for another transaction.
  2. Then you cannot create transaction because of fees
  3. Bitcoin wallet specifies fee based on previous transactions on blockchain, and it proposes fee that would be on average fastest for transaction to enter to the block. In some situations we wallet can propose fees to be picked by ourselves.
  4. We can use different addresses to receive outputs/send inputs