Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#3281

Ah, ok. Thank you.
(Unspent Transaction) Output.
Before it looked for me like “Unspent Output of a Transaction”
This language worked for me this way.

One thing is to repeat, another to really understand

#3282

  1. Unspent Transaction Outputs are transaction constructions built by wallets. All transactions have (x amount of) inputs and (x amount of) outputs. A UTXO is essentially an amount of crypto (such as BTC) that is sent to a recipient but not yet sent to another recipient.

  2. Absolutely nothing. The blockchain will reject the transaction if the UTXO is not large enough.

  3. This is mostly done, via a wallet with a fixed fee rate, by calculating the difference between the input and output. Some wallets are capable of using flexible fee rates.

  4. The easiest method this can be done is through outputting the inputs into separate addresses. The addresses can reside within the same wallet or separate wallets.

Feedback is appreciated :slight_smile:

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#3283

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

2)What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
It will sum up all of the UTXO in the wallet if there isnt enough transaction will be invalid.

3)How would a bitcoin wallet specify the transaction fee when creating a transaction?
The difference between inputs and outputs.

4)How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Creating multiple address and BTC mixing

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#3284

You can use multiple UTXOs as inputs to a tx. If you don’t have enough then nothing will happen :stuck_out_tongue:

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#3285

  1. Unspent Transaction Outputs- UTXO represents the spendable balance of a wallet. The blockchain tracks which portions of transactions are unspent.

  2. If a wallet does not have UTXO large enough to cover the transaction, just like at the grocery store, the transaction is rejected.

  3. A transactions calculates the transaction fee by the equation inputs = outputs + tx fee.

  4. One could use their knowledge of inputs and outputs to increase privacy in transactions by using an uncorrelated, receive-only wallet to receive transactions. Because the public key has no KYC, no one can know who owns it.

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#3286
  1. UTXO = wallet balance
  2. No transaction would happen
  3. Input minus the output gives you the transaction fee
  4. using multiple output addresses
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#3287
  1. The amount available to a wallet that can be paid out
  2. The transaction can’t be made
  3. it would sometimes look for the lowest fee to automatically apply it to the TX and deduct the required amount.
  4. Use different addresses to receive payment
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#3288

Homework on Bitcoin Transactions and UTXOs - Answers

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    • Sums of BTC that have been sent to a wallet but have yet to be spent. Received Bitcoin, laying in wait until used in a transaction.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    • Multiple UTXOs are combined to cover the amount of the transaction and associated fees.

  3. How would a Bitcoin wallet specify the transaction fee when creating a transaction?
    • Input = Outputs + Transaction Fees

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    • By sending to multiple outputs, with portion of transaction going to another private key address that you own

blockchain.Ronin

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#3289

The sum of all UTXOs is the wallet balance.

You can use multiple UTXOs as inputs to a new tx. If all your UTXOs are not enough, then the tx will fail. :slight_smile:

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#3290

  1. UTXOs are outputs from previous inputs that are available for you to spend.

  2. You would use multiple UTXOs and send the change minus the fee back to yourself.

  3. It bases it on previous TX fees that is see in the blockchain which will get you into the blockchain at what it considers fast enough. So, basically at a speed relative to the amount in the TX which miners prioritise by highest.

  4. Increase number of outputs with different addresses sending money back to yourself.

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#3291
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • Unspent transaction outputs (UTXOs) refers to the amount of money a person has left after spending an amount of cryptocurrency, BTC for example.
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • If I don’t have a single UTXO that is large enough the blockchain would add up more than one and add the sum up and then my transaction would go through.
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • The transaction fee is the UTXO minus the UTXO input, for example: I have 1 BTCon my account, I want to send someone 0.7 BTC and 0.2 to myself. The fee would then be 1- 0.7 - 0.2 = 0.1. The fee would be 0.1 BTC. But, the wallet usually calculates the best fee automatically.
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • I could generate new addresses when sending back money to myself making it impossible for someone looking at it to know which address I’m sending money too.
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#3292
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    The amount of spendable balance which can be used for transactions
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    it would use multiple UTXO’s to cover the transaction and return the excess amount
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    input minus output is the transaction fee
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    by using multiple output addresses
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#3293

1.- UTXOs are Outputs from a previous transaction and are the balance in my wallet.

2.- If I don’t have a single UTXO that is large enough I can spend another one till in sum I have enough to cover the transaction. If the sum is larger than what is actually needed to pay for my transaction I get back the rest of what the transactions cost.

3,. The transaction fee = output-input

4.- By spending my UTXOs input is sometimes split into two or more outputs because I get back the rest of what the transaction cost but can not be seen for others if the output goes to my address or to the one of another person

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#3294

  1. The UTXO is an transaction from others. It is an output from another people which isn´t been used for a new output.

  2. It will sum up different UTXOs. If the sum is still not large enough, then the transaction is invalid.

  3. A transaction fee is the input miuns output. The wallet will compare different inputs and outputs, calculate the fees and pick the best.

  4. A man can use differnet adress for differnet inputs and outputs. A man can even send the bic to himself in one wallet by two adresses, which increases the anonymity.

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#3295

1, A UTXO is the portion of a previous transaction that associated with a public key. The owner of the private key that is associated with the public key is able to spend the value in the UTXO by including it as an input for a new transaction.

2, You add it to other UTXO(s) until you have enough to cover the tx outputs and mining fee. If the sum of your UTXO inputs is greater than the sum of the outputs plus the fee, then you can add yourself to the list of outputs to give yourself the resulting “change”.

3, A wallet specifies a fee by making the sumo the outputs slightly larger than the sum of the inputs. The miner takes the difference as the fee.

4, You can increase security by always using a fresh bitcoin address for each transaction. This way it is not possible for anyone to lookup any other transactions you have made (and start to build up a picture of your behaviour on the blockchain) with the same bitcoin address .

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#3296

  1. They are transactions that have been sent to your wallet address by other wallets, and that have not yet been spent.

  2. Your wallet would (by it self) decide which multiple UTXO’s to use to complete the transaction. The remaining difference (change) will be sent back to you minus the fee

  3. It determines the fee based on average previous transaction fees on the blockchain

  4. When multiple UTXO’s are used with an amount of BTC higher than the intended amount, 2 outputs will be shown. It can not be determined which one was for payment and which one was returned to same wallet?? (Any comments on this answer would be appreciated, not sure if i answered this correctly)

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#3297

That’s the basic privacy measure that is also described in the whitepaper. Its not perfect especially not with modern chain analysis tools. :slight_smile:

#3298

  1. These are spent transactions coming from someone’s wallet. Since you haven’t sent these to other wallets, these are called UTXOs. Your own wallet basically tracks all UTXOs and sums them all up, thus you see the total balance in your wallet.

  2. The transaction finds other UTXOs that would be higher than the spent amount when summed up. The total UTXOs less the spent amount will be sent back to your own wallet as. a new UTXO. This will then again be shown up as a total balance in your wallet toget ther with the rest of your UTXOs.

  3. If, INPUT = OUTPUT + TX Fee
    then we can say
    INPUT - OUTPUT = TX Fee

  4. Transactions are always one way. If the spent transacation output PLUS the tx fee is lesser than the INPUT ( if [OUTPUT + TX Fee] < INPUT )then the difference from the INPUT and the sum of OUTPUT and TX Fee ( Back to Wallet = INPUT - [OUTPUT + TX Fee] ) will be sent back to another wallet address that basically represents your same originating wallet. In the blockchain explorer, it’s not clearly stated which transaction is really the sent transaction and which one is being sent back to your own wallet as the change.

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#3299

  1. UTXO are the amounts of a BTC that you are able to spend. It’s what you or your wallet address owns.

  2. The transaction will fail, as you don’t have enough… alternatively if you have other larger amounts or enough single amounts it will combines these UTXO’s to form the payment TX.

  3. The transaction fee is specified when and during the transaction. This is what the miner is prepared to take in order to complete the order.

  4. You could change the size of the transaction in order to disguise the actual size of the transaction and the difference can be paid back to your wallet or to a separate wallet.

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#3300
  1. UTXO is transaction sent to your wallet. Inputs
    2.If I would have only one UTXO, that too small to cover transaction, than the tx will not be signed. If I will have more UTXO, than wallet will use sum of more UTXO, to cover and sign tx.
  2. Fee = input - output
  3. To increase more privacy you can send transactions to your self, to different wallets and addresses.
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