Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#3522

  1. UTXOs are the unspent bitcoin sent to your address that you are allowed to send. UTXOs are the outputs from previous transactions that will become the inputs you ‘spend’ in future transactions.

  2. If a single UTXO is not large enough to cover the required amount for a transaction, more than one UTXO will be used as the transaction input and the unspent amount will be sent back to the wallet address.

  3. Most wallets automatically specify the transaction fee by querying the blockchain for previous fees and finding a fee that will allow the transaction to be mined quickly enough.

  4. To increase privacy in a transaction you could send varying amounts of BTC to addresses owned by you in addition to the intended address as to make it harder to discern to intent of the transaction.

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#3523

Homework on Bitcoin Transactions and UTXO - Questions

1. Describe what Unspent Transaction Outputs (UTXO) are.
UTXO are all the transaction outputs written in the blockchain that haven’t been used as inputs in another transaction. So, basically, UTXOs are the amount of Bitcoins available to use (so, you can check the balance for a wallet, based on a certain private key, and theoretically, the sum of the bitcoins saved into UTXOs is the full amount of BTCs available in the network).

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
If there isn’t any UTXO that can fit the bill for the transaction you are creating, you will be able to use as many UTXO’s as you need in order to pay it (including fees). Naturally, if all of your UTXO’s are not enough to cover the transaction, it will be rejected.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
Since there is a rule that the sum of the inputs of a transaction should match exactly the sum of the outputs, the wallet will suggest an amount of BTC as a fee, which will be enough to ensure that the transaction will be confirmed in an acceptable time. The remainder of the BTC used as inputs will be delivered to an address defined by the wallet’s owner.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Basically, all inputs and outputs are wallet addresses, therefore, you cannot identify who was involved in any transaction if you don’t know the wallet address of any of them.
Also, anyone can have more than one address, so, they can send the remainder of each transaction to another of their own addresses, which increases the difficulty of tracking how many BTC has a person.

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#3524

You can use as much UTXOs as inputs as you need but you must spend the entire UTXO. :slight_smile:

#3525

Homework on Bitcoin Transactions and UTXO - Questions

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO are transactions that you have received but haven’t spend yet. the sum of utxo’s is your balance.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    if your utxo combined are still not enough to cover your transaction. the transaction will be denied by nodes.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    wallets will calculate the average transaction fee of the latest transactions, however some wallets let you choose your own tx fee.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    by sending the remaining amount of the output back to a diffrent btc address of yours.

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#3526

Homework on Bitcoin Transactions and UTXO - Questions

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

UTXO’s = Unspent Transaction Output

They are unspent outputs from a previous transaction (input for you) that you have not spent.

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

Your wallet would check the blockchain for unspent UTXO’s

If you have not a single UTXO large enough to cover the transaction, it will add up multiple UTXO’s to make a larger amount … if this is not large enough the transaction would be invalid.

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

Your wallet recommends a reasonable fee that will get you on the blockchain quickly based on previous fee’s

It is also the difference between the transaction inputs and transaction outputs.

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

you can increase the outputs including sending back to yourself ? and sending back to yourself to another wallet ?

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#3527
  1. Unspent outputs from previous transactions.
  2. Transaction will be invalid.
  3. Input-output
  4. Generating different addresses can increase privacy in your transaction.
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#3528

  1. UTXO’s are unspent transactions related to what you currently own or have received (inputs)

  2. You would not be able to complete that transaction

  3. It will automatically calculate a FEE amount to conduct your transaction. It is not predetermined within a wallet

  4. You could have multiple outputs in regards of your inputs, to create multiple utxo’s and send them to different addresses.

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#3529

Unspent transactions are Bitcoin that you received that you have not spent yet

You would have to use another utxo and then you would use the leftover balance and send it back to yourself

The wallet would look at the the transactions and propose a fee.

Use a different address for every transaction

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#3530

1 Describe what Unspent Transaction Outputs (UTXO) are.

UTXOs are basically the input or your balance in easier terms.

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

The transaction will simply not go through

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

It will include it and make it part of the transaction. It will be automatically added to the transaction therefor you cannot send more the your UTXO minus the transaction fee.

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

By using a private key ( Digital Signature)

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#3531

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are unspent transaction outputs, i.e. outputs of a previous transaction that are not yet input of a successive transaction

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Your wallet will try to combine smaller UTXOs to create the necessary total input. If the total of the UTXOs is smaller than the required transaction input, your wallet cannot create the transaction.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It will not explicitly mention the transaction fee. It is simply the total input minus the total output.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Your own input and output address do not have to be the same, so it is hard to determine for others which part of the transaction output is sent to yourself.

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#3532

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

#3533
  1. UTXO-remaining coins in wallet
  2. If you have more than 1 UTXO in your wallet, use as many as needed to cover the transaction. If you don’t have enough, UTXO, transaction is invalid.
  3. Sometimes you get to pick the fee, sometimes not and the fee becomes UTXO minus transaction amount.
  4. By sending yourself UTXO’s from your original wallet.
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#3534

  1. it is the transaction record of the moneys sent to other users that wait around until they are ready to be moved by the recipient. e.g. All the moneys sent to me that I have not spent yet, wait around until I spend them at which point they are not UTXO’s anymore.

  2. Another utxo would be sent to cover ‘greater than the amount’, then, the specified amount would be sent to the receiver/receivers (signature) and, the remaining amount would be sent back to one’s self (minus a fee in which all sent matches the amount of all the utxo’s used in the transaction.

  3. the fee is dependent on the speed at which the transaction will take place. You select the speed (appx) and it automatically comes up with a fee that uses up the total of the utxo’s used in the transaction.

  4. When looking at blockchain transactions, there is no way to know which of the outputs, are going out of one’s wallet vs going back to one’s own wallet.

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#3535
  1. UTXO are the balance left in your wallet from which it keeps the balance of.
  2. your transaction would be declined if your UTXO is not sufficient enough to cover it.
  3. The wallet communicates with the blockchain to figure out the correct fee.
  4. Many different addresses and outputs have a possibility to come from one input.
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#3536

Only is you use a different address when sending change back. :slight_smile:

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#3537

The sum of all you UTXOs is your balance.

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

#3538

Homework on Bitcoin Transactions and UTXO - Questions

  1. Describe what Unspent Transaction Outputs (UTXO) are.
  2. 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?
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?

1)The UTXO are the balance of the outputs that remain unspent from a previous transaction.

  1. The transaction would not be valid as it would not be accepted.

  2. The fee is calculated as the difference between transaction inputs and outputs.

  3. By creating a new address the bitcoin can be transferred after a fee or payable amount is subtracted. Anonymity is ensured as addresses are not linked to an identity so from the outside it is not possible to see which output went where.

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#3539

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

#3540
  1. Describe what Unspent Transaction Outputs (UTXO) are.

Unspent transaction are amounts of crypto that have not been spent, you could also say that this is your wallet balance and UTXO’s are inputs.

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

The transaction would not take place because you do not have enough, it would be checked on the blockchain and the network computers would not agree to the transaction.

  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    UTXO minus UTXO input = fee

The fee is calculated by subtracting the input from the output and is only ever implied on the blockchain.

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

If you use multiple addresses to make transactions, it makes it more difficult to know to whom or where these transactions are going creating more privacy.

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#3541

  1. UTXOs are unspent outputs from transaction, they are money that you can spend.

  2. Wallet tries to find another UTXO that can be signed with your privet key, if you don’t have any more UTXOs transaction will be invalid.

  3. Bitcoin wallet looks at previus transactions fees and then determine fee for your transaction based on previus fees in blockchain.

  4. To use multiple addresses.

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