Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#3441

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO are bitcoins received but not sent in a transaction. Once there is an output that’s when the bitcoins are spent. The recipient of the spent coins will then have an input and unspent transaction outputs.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? You have to spend all the input in your wallet with each transaction, and the unused portion can be returned to you or wherever you specify as an input. If the total of your UTXO is insufficient to cover the transaction, then there is no transaction.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The wallet will specify a transaction fee based on recent blockchain fees as they relate to completion time of the transaction getting on the blockchain.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? Output would use different addresses, including any portion of output returning to the sender.

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#3442

Well if I had 2 UTXO of 1BTC as in a total of 1 BTC in unspent transactions then I could not send 1.5BTC to a friend. However if I had 2 UTXO each consisting of 1BTC then I would have instilled in my friend the purest form of passion and love that could only come from a true Bitcoin HodLer.

#3443

Homework on Bitcoin Transactions and UTXO - Questions

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    It’s the money that is received in a wallet and not spent yet.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    The wallet will addition all the UTXO in order to reach the necessary amount.
    If after this operation, the amount is still not enough then the transaction won’t be valid and so won’t happen

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    By checking the previous fee on the blockchain and establishing which fee will allow the transaction to happen quickly enough

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    No one knows where the output goes and it can go to several addresses including your own

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#3444

The sum of all your UTXOs is the money you have available.

You can use multiple UTXOs as inputs to a new tx. If you still don’t have enough then the tx will not go through. :slight_smile:

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#3445

You don’t need to spend all UTXOs, that would be a waste of block space. You only need to pick as much UTXOs as you need to fund the tx. :slight_smile:

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#3446
  1. UTXOs are transaction outputs sent to your address that have not yet been used as a transaction input in your own wallet (ie, they have not been spent yet).
  2. If you want to send a transaction for a certain amount but you do not have a single UTXO large enough to cover the transaction then your wallet will construct a transaction with multiple UTXO’s until the balance of the UTXO’s is either equal or greater than the transaction amount needed.
  3. The transaction fee is implied by the difference between the input and the output balances, the input will be larger than the output and the remainder is the fee. Your wallet will estimate the most efficient fee to get your transaction on the blockchain.
  4. Transactions can be routed to a wallet that is controlled by the same person that sends the transaction, (ie, you can send money back to yourself) and because nobody can identify the person that owns a wallet from the address alone this increases privacy for the person moving funds.
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#3447

  • Describe what Unspent Transaction Outputs (UTXO) are.
    They are like the balance on a wallet.

  • What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Then the transaction cannot be fulfilled.

  • How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It is the sum of inputs minus outputs.

  • How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    By using multiple addresses for the transaction.

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#3448

The sum of all your UTXOs is the money you have available.

You can use multiple UTXOs as inputs to a new tx. If you still don’t have enough then the tx cannot be fulfilled :slight_smile:

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#3449

Jun '19

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    total of UTXO is the wallet balance.Unspent transaction outputs are how transactions are initiated. You can have multiple inputs and outputs. But you must always have an input.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?It would be rejected.You would have to have additional input. Then try UTXO again.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?There is a fee in satoshi’s for every transaction it would be deducted from your transaction output. This fee goes to the miners that hold the block on the node.
    UTXO minus UTXO input = fee
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? You could send money to yourself by sending a UTXO from one wallet and put it in a different wallet under control.
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#3450
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    A UTXO is basically the unspent remains of a transaction. It is the result of you wallet keeping track of the transactions that come into your wallet.

2)What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
The transaction would not be verified by the blockchain nodes as your wallet does not have the funds available to cover the requested output.

  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Input = Output + Fee.
    The fee is the difference between the output and the input.
    Output - Input = Fee.

  2. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Buy splitting up the input into multiple outputs.

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#3451

1.UTXO’s are essentially the amount of an asset that has been input into your wallet that have not been sent or spent.

  1. The transaction would be invalidated.

  2. Wallet fee is automatic and based on average transaction fees.

  3. Wallet address do not identify user, hence is secure and private.

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#3452

You can use multiple UTXOs as inputs to a new tx. If you don’t have enough of them then the the tx will not be verified. :slight_smile:

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#3453

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

#3454
  • Describe what Unspent Transaction Outputs (UTXO) are.

Are inputs from a previous transaction that have not been used in a transaction

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

Wallwt will combine previos UTXOs to create a transaction to cover the propose transaction plus fee.

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

It looks at previos transactions to calculate the transaction fee for the outgoing transaction

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

You can create a outgoing transaction with several outputs so that it cotains a different address for the same user

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#3455
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    • Bitcoin received from the output of another wallet. This bitcoin is now the input to your wallet. UTXO holds the value of the unspent bitcoin. Balance of you wallet
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    • The transaction would be rejected
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    • Input - output = fee. This fee is calculated by looking at the blockchain for similar transactions and what those fees were.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    • You can send bitcoin back to yourself as all UTXOs have to be spent if you are going to make a transaction purchase.
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#3456

1.UTXOs are combined the total wallet balance which can be used for future transactions.
2. Transaction will be denied by the blockchain.
3. Input minus the output = Fee.
4. By using new wallets

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#3457

Homework on Bitcoin Transactions and UTXO - Questions

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    These are the amounts that are sent back to your wallet when you make a transaction.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    You would need to use more than one UTXO then (if you had on your wallet). Then you would end up with another UTXO on your wallet in a smaller amount than one of the ones you used.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It would suggest fees based on what the fees were for the most recent transactions and their speed. The fee would be specified as the input minus the output.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You can do this by sending bitcoin to multiple wallets per transaction so that it is more difficult to deduce how much and who you sent coins to.

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#3458

  1. UTOX are transactions, that are available to be spent. Sum of all UTOX is total balance.

  2. Then UTOX-es would be summed together, like banknotes and the excess funds would be sent back to me as new input, like the change.

  3. Fee is the difference between input and output and if i understand it right, it is determined by the market, not the wallet. The wallet looks at last few transactions and only proposes the fee, that is appropriate for transaction to be successfully confirmated. To me, the wallet acts like electronic barterer for me, but i may be wrong on this.

  4. You can increase privacy by sending one transaction to many different recipients. Bitcoin address doesn’t include any information, about who owns it, so one or more output addresses could be controlled by me, not somebody else.

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#3459

UTXO’s are unspent transaction outputs. They are the amount of bitcoin in your wallet that are available for transactions.

If you did not have any single UTXO large enough to cover your transaction you could aggregate all of your UTXO’s to determine if you had enough. If the total aggregate of your UTXO’s was not enough the transaction could not be completed.

Fee = UTXO out - UTXO in

Transaction privacy could be increased by increasing the number of wallet addresses in a transaction. This would make it more difficult to determine the owner of any particular wallet address.

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#3460

UTXOs are Unspent TX Outputs. The sum of all your UTXOs is your balance.

You can use multiple UTXOs as inputs to a new tx. If you don’t have enough ballance in them, then the tx will be rejected. :slight_smile: