The wallet will only set a recommended fee based on the market yes. But the fee can be specified manually however you wish. In the blockchain this will be implied as the difference between inputs and outputs. 
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1. Describe what Unspent Transaction Outputs (UTXO) are.
Transactions which you has been not spent
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
You wallet will sum the input transcations to get in the amount of desire transaction
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
Its based on previous fees paid. If the user wants, he can set the fees byself. The price of fees based on supply and demand.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You can send BTC to another anonymous wallet which belongs to you
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Describe what Unspent Transaction Outputs (UTXO) are.
UTXOs are transactions that the recipient has received and is waiting to be spent.
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
The sum of all other UTXOs will be calculated to cover the transaction and can then be executed unless there still isn’t enough funds.
How would a bitcoin wallet specify the transaction fee when creating a transaction?
input - output = fee
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Increasing the number of addresses the transaction is being sent to.
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Describe what Unspent Transaction Outputs (UTXO) are.
These are bitcoin funds sent to you, which haven’t been spent yet in another transaction. UTXO’s are the output of transactions and will be spent when they are used as input for a new transaction. -
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
In case the total amount of your UTXO’s is lower than the total amount of the funds you want to spend, Your transaction is invalid and you can’t do the transaction. In case you have enough funds (meaning the sum of all your utxo’s is high enough), multiple utxo’s will be used as input for the transaction. The end result would be that x amount is sent to the address of the person you need to pay and the “change” is sent to yourself (minus transaction fee) -
How would a bitcoin wallet specify the transaction fee when creating a transaction?
It will check the most recent transactions on the blockchain and will pick a transaction fee that will make sure the transaction is picked up reasonable fast enough by the miners. -
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Nobody knows who’s behind the addresses in the input and output. You can send funds to others but also to a different address of yourself. Since nobody knows who’s behind which address, this creates some kind of privacy
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Homework on Bitcoin Transactions and UTXO - Questions
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Describe what Unspent Transaction Outputs (UTXO) are.
Simply Put, they are bitcoin you get to keep and have not spent yet so they are stored in your wallet or other storage place -
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
Your transaction would fail and not be confirmed on the blockchain -
How would a bitcoin wallet specify the transaction fee when creating a transaction?
It would compare to other transaction fees on the network at the time and then make a determination based off of this -
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
if all the inputs are sent to one wallet then outputs sent out then the wallet could be shown as having received funds from multiple sources but you would not know where specifically the funds were coming from. Also you never know who is behind a wallet unless they announce it so in this sense there is some form of privacy
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- Describe what Unspent Transaction Outputs (UTXO) are.
Transactions where the sum of the inputs exceeds the sum of the outputs.
- What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
Several rransactions would be combined.
- How would a bitcoin wallet specify the transaction fee when creating a transaction?
Private key.
- How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Send some outputs back to myself.
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- UTXO’s are transactions outputs that has not been spent yet. Let’s consider a transaction in which A sends one bitcoin to B, until the moment B spends the money that A sent, the transaction is considered an UTXO.
- If you don’t have any single UTXO large enough to cover for your transaction, your wallet can combine two or more of your UTXO’s in order to reach the amount required for the transaction.
If after combining all of UTXO’s, the amount required has not been reached then the transaction will not go through.
- The transaction fee will be separated from the output, in a way that the ouputs plus the fees will be equal to the inputs.
You can use the input-output model to send the remainder of the output into a different address that you control, which will increase your privacy.
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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 in them, then the tx would fail.
“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”
Of course it makes much more senses like that, however this part wasn’t really clear in the training video.
- Describe what Unspent Transaction Outputs (UTXO) are.
UTXOs are funds received in a blockchain and are not yet used in a transaction. Transaction inputs are UTXOs until they are spent and they become outputs. - What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
The transaction will just not go through, it will fail. This is the same as trying to start a car without gas/fuel. - How would a bitcoin wallet specify the transaction fee when creating a transaction?
The Bitcoin transaction fee is predetermined as a percentage of the transaction. It is auto-calculated for each transaction. - How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
As an account owner I can send BTC to different people without disclosing the total from the funding source. I can also use different addresses to receive BTC from other users. Those that I transact with do not have to know more than the information relating to my transactions with them.
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Describe what Unspent Transaction Outputs (UTXO) are.
-basically they are the inputs of my future transactions, for example it shows how much btc I can spend
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What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
-then the transaction would be processed with smaller UTXO’s
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How would a bitcoin wallet specify the transaction fee when creating a transaction?
-it would look back at the blockchain’s previous transactions and decide a fair enough fee for the transaction to go through fast enough
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How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
-to use more different outputs
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- Unspent Transaction Output (UTXO) An output of a blockchain transaction that has not been spent, and can be used as an input for new transactions.
- If you don’t have any single UTXO that is large enough to cover for your transaction then you should combine it another one to pay the balance and return the surplus to own personal address.
3.A bitcoin wallet will specify the transaction fee by subtracting input minus output.
4.You can use the notion of transaction inputs and outputs to increase privacy in your transaction because the first transaction has no inputs by tracking your UTXOs, store your private keys, and wallet structures the input to choses and outputs to create automatically and chose the best fee you for you.
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- Describe what Unspent Transaction Outputs (UTXO) are.
- What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
*3.How would a bitcoin wallet specify the transaction fee when creating a transaction? - How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
- UTXOs are unspend outputs, these tx that are ready to use for another our tx are UTOXs, they are unspend until we use it in another tx
- transactions can not be executed
- input = UTXO + fee, , so fee=UTXO -input
- use many adresses for outputs
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- Describe what Unspent Transaction Outputs (UTXO) are.
- UTXOs is the amount of currency a wallet can spend. It is the collection of currency it received and the currency spent.
- What would happen if you don’t have any single UTXO that is large enough to cover your transaction?
- In this scenario, the transaction will be declined. The wallet will ask the blockchain how much UTXO it can spend and will discover that it will not have enough.
- How would a bitcoin wallet specify the transaction fee when creating a transaction?
- The transaction fee = input-output but it’s more complicated than that.
- The fees go to the miner as a reward for computing the hash block.
- The wallet calculates the transaction fee and chooses what fee works best for the transaction based on the other fees in the block. The miner always prefers larger transaction fees over smaller fees so the larger transaction fees will allow those transactions to be placed on the blockchain faster.
- There are ways to manually set the fee amount. A person might want to do this if a certain transaction holds significance.
- How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
- Because each transaction creates a unique output address for each transaction. Therefore, it will be hard to track where transactions go from the outside looking in.
- This increases privacy because a person can’t see how much cryptocurrency you have in your wallet. Transactions are based on UTXOs. UTXOs are the collection of money received (inputs) and money sent (outputs).
- So wallet amount information is not available for people to see. This is different compared to a bank because accountants and other bank employees can search your bank account information in minutes.
Instead, bitcoin relies on the function of the blockchain which is the total collection of all transactions.
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You can use multiple UTXOs as inputs to a new tx. If you don’t have enough, then the tx will fail.
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- Are the transactions we received and which are still unspent, in order words we can use it to send funds further. The sum of UTXOs gives as our ‘balance’.
- It can be combine with another UTXO and send the require amount to addressee. The remaining part needs to be send back to our account.
- It would suggest us a transaction fee, calculate it automatically based on the recent blockchain situation.
- By using many addresses for outputs, not holding only one address.
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Unspent Transaction Outputs (UTXO) are unspent funds left as outputs from previous transactions. UTXOs are stored on the bitcoin blockchain, scattered throughout various transactions recorded on the network. UTXOs are initially locked and require a private key associated with the bitcoin’s address to be unlocked. This happens when someone sends a certain amount of bitcoin to a public address. The wallet generates a new transaction that takes UTXOs as inputs and unlocks them using the associated private key. This transaction then generates new locked UTXOs that become registered to the new owner’s address.
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All the possible small UTXOs will be aggregated to cover the remaining transaction. Any remaining UTXOs will be credited to your account as change after the transaction fees have been deducted. However, if the amount remains insufficient despite aggregating, the transaction becomes invalid.
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The wallet will calculate this based on:
transaction fee = input UTXOs - output UTXOs -
It is good practice to have multiple bitcoin addresses for transaction input and outputs.
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UTXOs are when someone has sent you a transaction and you have not yet spend it.
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Then you can not make a transaction.
3.Transaction fee is input - output. You can choose the transaction fee, but miners are normally taking the highest transaction fee.
- Make many transactions.
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You can use multiple UTXOs as inputs to a new tx.
- They are the inputs your wallet that you use for a transaction - like bills in an old school wallet
- The wallet combines UTXO’s to get an amount equal to or greater than the transaction amount (plus fees). If it is over, it returns the overage to the wallet (or another designated destination) as a new UTXO.
- You can pre-determine or it will look at the average transaction fees going rate.
- None of the inputs or outputs have a name associated with them .
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