Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#3482
  1. UTXO are the difference between all your receives inputs and all your spent outputs. In other words, the amount that you could currently spend but haven’t yet. Similar concept to the account balance.
  2. The transaction will get to a node, which will check if is a viable transaction. The node will see it is not and will discard it as garbage.
  3. Looking back at previous transactions and fees in the chain, it will decide which fee will be incentive enough for miners to include your transaction in a block in a reasonably short amount of time.
  4. Your transaction can have real output among many other addresses that you possess.
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#3483

  1. A UTXO is basically what was sent to another wallet. The transaction is unspent until the recipient creates a UTXO to another wallet.

  2. No transaction would occur.

  3. The transaction fee is the difference between the inputs and the outputs.

  4. The inputs and outputs are anonymous. Privacy is increased in my transactions because inputs and outputs are anonymous.

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#3484

Homework on `bitcoin Transactions and UTXO:

Q1: Describe what Unspent Transaction Outputs (UTXO) are.

A: UTXO’s or Unspent Transaction Outputs are literally transaction inputs a wallet has received but has not spent.

Q2: What would happen if you don’t have any single UTXO that is large enough to cover your transaction?

A: It’s a rule that in any transaction all UTXO’s in total must be spent. Therefore in the instance that no single UTXO is big enough to cover the intended transaction, the total combined UTXO’s received by the wallet would be spent to cover the intended transaction output which would consist of the intended transaction output, the returning transaction output, and the unspecified fee. Total inputs must match total out.

Q3: How would a bitcoin wallet specify the transaction fee when creating a transaction?

A: Taking previous transaction fees into consideration, a bitcoin wallet will calculate a (reasonable) fee for the transaction. The end result will look like this: Total input’s minus STXO’s = fee.

Q4: How would you use the notion of transaction inputs and outputs to increase privacy in your transaction?

A: Numerous inputs and outputs can be utilised to increase privacy in a transaction.

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#3485

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Ans 1: (UTXO) are transactions (money) you have received and that is available for you to spend.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Ans 2: If you don’t have a single UTXO that is larger than the amount you want to spend, the transaction wont go thru because the output is more than the input.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Ans 3 Output sent to you minus input received by you = fee charged to create the transaction.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Ans 4 One can generate new output addresses, and also have multiple output addresses.
    :pray: :heart: :pray:

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#3486

Describe what Unspent Transaction Outputs (UTXO) are.
The amount of unspent bitcoin in your wallet.

What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
The transaction will not be completed.

How would a bitcoin wallet specify the transaction fee when creating a transaction?
Input minus output equals fee.

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction
Generating new output addresses, and having multiple input addresses.

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#3487

1) Describe what Unspent Transaction Outputs (UTXO) are.
An UTXO is an unspent output from a transaction

2) What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
The sum of Inputs - sum of UTXOs = fees

3) How would a bitcoin wallet specify the transaction fee when creating a transaction?
It is indirectly specified. The wallet does the calculation Fee = Inputs - Outputs

4) How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You can send some BTC back to yourself - then it won’t be known how much BTC you spent

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#3488

The sum of all your UTXOs is the wallet balance.

You can use multiple UTXOs as inputs to a new tx. :slight_smile:

#3489

You don’t need to use all UTXOs, you can pick just as much as you need to fund the tx. However you do must spend the entire UTXO and then send the remaining funds back to yourself or the entire remaining funds will be considered as a fee for the miner. :slight_smile:

#3490

I’m not sure how this explains what happens when you don’t have enough balance in a single UTXO then constructing a tx. This is though how fees work. :slight_smile:

#3491
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO is an output of a transaction that hasn’t been used as input in any transaction.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Then additional available (if any) UTXOs would be added to cover the transaction.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    fee is implied, it equals the reminder left after substracting outputs from inputs
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You could split the change from the transaction across many wallets you control to make it difficult to identify the wallet of the receiver or the amount.
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#3492

Yes you’re right. It said “if you don’t have any single UTXO that is large enough to cover for your transaction”. Other UTXO can be used. I totally misread the question. Thanks for the correction.

#3493
  1. Bitcoin that is available for spending for the address holder.
  2. Multiple UTXO’s can be combined to give greater than the required amount for the transaction.
  3. The transaction output is less than the transaction input with the difference being the transaction fee.
  4. You could output to multiple new addresses of the owner of the input address.
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#3494

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    its the amount of currency you have available to spend after someone sent you a previous transaction.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    then you have to wait to have the complete amount to have it or the transaction will get rejected

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    the wallet asks the block chain is the necessary funds are available to make the transaction

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? have multiple outputs that way it makes it hard to know if the transaction is just going to one person ( please let me know if this answer is correct )

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#3495
  1. Unspent transaction outputs
  2. It would try to add multiple UTXO’s to create the correct amount, if not it would be invalid.
  3. Looks at the blockchain to determine the correct fee, input - output
  4. All UTXOS have to be spent, with a new address every transactions, its impossible to trace the outputs to someone.
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#3496

Homework on Bitcoin Transactions and UTXO - Questions

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    They are the inputs you receive from other bitcoin holders and you wallet with calculate all of these to determine how much BTC you control with that particular private key

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    The bitcoin network would reject the transaction

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Usually bitcoin wallets will suggest a transaction fee however you should be able to adjust it depending on how much or how little you wish to prioritize the transaction

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    If you are in control of multiple wallets you can send bitcoin to different addresses and no one knows whom these addresses belong to unless they are publicly advertised (such as exchanges). So you can send your bitcoin to your different wallets back and forth and no one will really know for sure who holds those bitcoin

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#3497

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

You can use multiple UTXOs as inputs to a new tx. :slight_smile:

#3498

Why would spending all UTXOs increase your privacy? UTXOs are linked to an address and can’t be changed. You can either receive funds or send change back to yourself to a new address which helps with privacy because its hard to link the address to your identity.
In case of sending change back to yourself there is no way of knowing which output was used to pay a service and which to send change back. :slight_smile:

#3499
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • Inputs from previous transactions that then turn into UTXO’s in your wallet for you to “spend”.
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • The transaction would be invalid and you would need to use more UTXO’s.
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?

-The fee is the difference between inputs and outputs.

  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • Use and send to multiple different addresses.
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#3500

sum total of transactions on the blockchain for your private key
transaction would be denied
a wallet can determine a transaction fee based on current fees or increase fee to increase speed of transactions
additional private keys

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#3501
  1. Total UTXO is the wallet balance.
  2. The transaction wouldn’t happen.
  3. Input - Output
  4. Nowadays it doesn’t matter with the up-to-date software based tracking
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