Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#3201

Thanks Fabrice! I can see I did not read the question properly :open_mouth: I better do extra study as punishment. But if thats the punishment I better answer more questions incorrectly as I enjoy it too much :rofl:

1 Like
#3202

  1. UTXO are inputs to your wallet that have not been spent. Your wallet will do the job of adding up all your UTXO’s by referencing a node.

  2. If you do not have a single UTXO that is large enough to cover a transaction the wallet will pull in another UTXO. If you do not have another UTXO the transaction will be invalid.

  3. Input - Output = transaction fee

  4. Using multiple inputs and outputs increases privacy. In regard to multiple outputs it will be hard to tell who that actual recipient is of the transaction is.

3 Likes
#3203
  • Describe what Unspent Transaction Outputs (UTXO) are.

UTXO are the sum of inputs that a public key has received. it is like the amount of coins that the wallet has received.

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

all utxos are added up and are spent by the output = fee.
if you dont have enough utxo to create the output for the tx, then the tx wont be posible.

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

The tx fee is calculated by subtracting the inputs - outputs.
It also checks for previous tx to stimate the tx fee.

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

sending different tx to wallets that are in my control and spending the outputs

1 Like
#3204

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Unspent Transactions Outputs (UTXO) are transactions of Bitcoin a person has received under their Private Keys. These are individual transactions of Bitcoin that have been recorded on the Bitcoin Blockchain and are not summarized just listed one by one.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    For example if a person had a .5 UTXO and a .3 UTXO and wanted to pay someone .7 Bitcoin then she would have to send .5UTXO and .2UTX to the payee and send herself back the .1UTXO

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Bitcoin wallet would not specific any transaction fee, the wallet examines the market and gets the best fee, user must have the extra bitcoin to cover the estimated fee to complete the transactions

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You could send the UTXO to a payee and any balances to yourself under a different private key. So no one knows that you own both the private keys, no one will know you own them and you have moved funds to yourself without anyone know that the transaction is circling bitcoins to yourself.

1 Like
#3205
  1. UTXO is like the “balance” of your wallet
  2. This is a tricky question because you can never spend a single UTXO to cover for your transaction but you have to spend it all? (and reimburse yourself ofcourse)
  3. Input - output = fee
  4. By using different inputs and outputs
1 Like
#3206

  1. UTXO’s are unspent outputs from other addresses sent to a wallet’s address

  2. The transaction would be denied by the network if your UTXO’s do not add up to the sum of your transaction output (including fee).

  3. Since inputs must match outputs, the transaction fee is equal to the input minus the output. The fee calculated by your wallet and is typically made large enough to match the average transaction speed of the network, if you want a faster transaction you can manually increase your fee.

  4. You could perform a transaction that is greater than the total amount you want to send and send the remainder a wallet address which you control.

1 Like
#3207

So does my fee get eaten if I try to spend more than I have? Who verifies my transaction is valid prior to being include on the next block? What would stop me from the just spamming the network with invalid transactions?

#3208

The sum of all your UTXOs is your balance.

You only need to spend as much UTXOs as you need to fund the tx. Using more UTXOs as inputs then needed would be pointless and would only increase the tx fee. :slight_smile:

1 Like
#3209

The miners get the fee.

Every node verifies a transaction when it receives it and doesn’t broadcast it further if its not.

A node you are connected to would blacklist you. Eventually you would run out of nodes to connect.
This is a measure that is implemented in Bitcoin core though, not necessarily part of the protocol.

#3210
  1. Your bitcoin balance. The received (input) bitcoin which has been not spend yet.
    2.Transactions will not happen
  2. Mathematical difference between input and output
  3. Create different input addresses and more than 2 output addresses.
1 Like
#3211

You can always combine smaller utxo’s together in your inputs to cover for your transaction, only if the sum of all your available utxo’s aren’t enough to cover for your transaction, the transaction will fail

1 Like
#3212
  1. Utxo’s are unspend incoming transactions. When you spend the utxo,s they become an input to another transactions.
  2. The transaction Will not be approved by the blockchain and therefore denied. Not executable.
  3. When you extract the output from the input it shows you the fee.
  4. By sending parts of the transaction inputs to your own wallet (different adresses) (output) it becomes very difficult to tell witch of the outputs go to another party and witch Goes to yourself
1 Like
#3213
  1. UTXO’s are received transactions that have yet to be used in a new transaction. These are calculated together to create your wallet balance.
  2. Your wallet would choose the best UTXOs to combine in order to complete your transaction. Then the excess amount would be sent back to a wallet you control.
  3. the transaction fee would be specified as the difference between the input and the output.
  4. The more inputs and outputs that are used will make it harder to know which transactions are being sent to others and which are sent back to the sender.
1 Like
#3214

Describe what Unspent Transaction Outputs (UTXO) are.

A UTXO is a transaction we have received and that can be spent. It would be an unspent input to our wallet. THe sum of all the UTXO would give us our money balance.

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

For a transaction, I can select more than one UTXO from my wallet. If still it doesnt cover the transaction, it will be rejected.

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

The fee of the trasaction would be the inputs minus the outputs.

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

In the transaction I can split the output money into different wallet addresses, including a wallet of my own. That makes more difficult to know exactly where is the money going, from an outside looking.

1 Like
#3215
  1. UTXOs are the transactions arrived to your wallet which haven’t been used as your output yet. The sum of all UTXOs are the balance you see on the wallet, which is not stored as a value in the blockchain.
  2. There is no transactions since you don’t have enough funds
  3. The fee is equal to input minus output
  4. The more inputs and outputs a transaction has the more difficult it gets to know what was really paid to who.
1 Like
#3216 
Describe what Unspent Transaction Outputs (UTXO) are.
 UTXOs are the amount of BTC that are not spent. Hence any bitcoins sent to you are unspent. When you do spend the unspent the original UTXOs are not UTXOs any more. 

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

The wallet collects all of the UTXOs and sends them out. So, assuming the combined UTXOs are enough for your purchase, the out may have some extra which goes to the fee and the remainder goes back to yourself as a new UTXO.

How would a bitcoin wallet specify the transaction fee when creating a transaction?
The wallet examines the traffic on the blcokchain and automatically determines a workable fee. The wallet may give you option levels allowing you to pay more satoshis to achieve a quicker response. Zero satoshis might reulst in never being confirmed.

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You could output to different addresses for yourself each time and therefore the BTC coming back to you doesn’t go to the same address making it harder to determine what you are doing.

1 Like
#3217

  1. UTXOs are the individual transaction balances that are owned by a wallet.

  2. UTXOs are added together and sent to the recipent while the remander is returned as a new UTXO minus the mining fee.

  3. by looking at the current price of sats per byte and how many bytes the transaction will take up in the block.

  4. you can create many wallets and therefore send utxos to a true receipent as well as sending many back to others you own.

1 Like
#3218

[

Homework on Bitcoin Transactions and UTXO – Questions

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

The Unspent Transaction Outputs is what has not been used and it is like money in your Wallet, maybe you spend some previously and that’s what is left over, for you to use or to do other transactions.

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

The wallet will not go through, It will be denied, it will not be valid, it will be rejected, decline,

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

You can figure it out by finding the difference between your Input – Output= Transaction Fee

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

You can generate, add new output address so that the public cannot relate it to the same user so each time you can use the same address but with a different Hash Tag Code Keeping the integrity of you privacy.

1 Like
#3219
  1. UTXOs are any transactions going towards a wallet, specifying how much this wallet has in spending power. Since the wallet doesn’t store actual coins, the amount of bitcoin that a person “holds” is defined by how much he has flowing towards him but has not yet spent. hence it is an Unspent Transaction.
  2. The transaction wouldn’t go through - the blockchain would be queried resulting in the information that I don’t have enough BTC to spend.
  3. The fee is the input minus the output
  4. By sending to many different outputs - for example another wallet that you also own
1 Like
#3220

  1. UTXO is the output of a BTC transaction in which for the value of the input (BTC) you receive, that value has to be totally spent in the output. For instance, if the input is 0.8 BTC and you’re only using 0.5 BTC to make a purchase, the remainder 0.3 BTC is also ‘spent’ in that you’re sending the 0.3 BTC back to yourself.

  2. I suppose the transaction will not go through.

  3. The transaction fee is the transaction input minus the transaction output.

  4. Privacy happens because no one really knows the exact breakdown value of the inputs and outputs. The public can only view the total input and output values.

1 Like