Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#341

First your Wallet will try to combine multiple smaller utxo’s together to cover the amount, If the
Sum of all available utxo’s can’t cover the amount, the transaction will be invalid. You can’t broadcast an invalid transaction. So it will not propagate to other nodes.

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#342

First your Wallet will try to combine multiple smaller utxo’s together

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#343
  • Describe what Unspent Transaction Outputs (UTXO) are.
  1. Basically they are input/incoming transactions that are from other wallets that have not been used as an output/sent transactions.
  • What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  1. Your transaction would not be allowed to happen depending on the wallet, and would become invalidated on the blockchain if funds were insufficient.
  • How would a bitcoin wallet specify the transaction fee when creating a transaction?
  1. Input minus the output = fee. The process is automatic and the fee is included in the outputs of the tx. Some wallet allow customization of the fee.
  • How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  1. The Large string of public addresses make it pseudo anonymous as most people/organizations cannot tell what extremely large digit addresses belong to who control them. Many wallets allow for fresh deposit addresses upon request. Companies like Chainalysis can Identify blockchain addresses by tracing them back to accounts connected to fiat on and off ramps(exchanges).
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#344

Unspent output, what can be spent as an input in a new transactions.

The transaction would not be verified by the network, so it would not be delivered.

Some would try to offer you the best solution compared to the actual moment of the network, others only would give some possible option so the person can choose depending the priority of his transaction.

All the inputs and outputs having more privacy through hash functions.

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#345

1.-inputs of a wallet which are still not related to an output transaction
2.-your wallet would search for a second or third UTXO to cover for the uotput plus fees, if not it is ignored or rejected
3.-it calculates it either from the difference Input/Output or checks the blockchain for the best fit
4.-Creat several uotputs

#346

  1. UTXOs are every single transaction on the Bitcoin network. They are essentially add up to your account balance.

  2. Your wallet would try to add up multiple UTXOs to fulfill the transaction.

  3. You can send assets to multiple addresses at the same time, and some of them could also be controlled by you.

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#347
  1. A UTXO is the amount of bitcoin you received from other wallets in previous transactions, it equals the amount of bitcoin you can potentially send on to another wallet. It is your wallet balance.
  2. If you don’t have enough UTXO, then your request for creating a transaction is not accepted by your wallet which, using your private key, can verify on the blockchain if you have enough funds to create it.
  3. Generally, wallet look up to the blockchain to charge a fee small enough to get the transaction done is a reasonable time. Other wallets let the user choose the fee by its own. The fee is taken by the leftover UTXO after output of the transaction is taken.
  4. To increase you privacy, you can fracture outputs into multiple addresses which is big enough to make it hard for anybody willing to understand where the input is coming from.
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#348

1.UTXO’s - is the balance in your wallet that you can spend.

  1. Your wallet will group your UTXO’s in order to cover your desired transaction as long as you have a big enough total balance.

  2. Your wallet checks the blockchain to calculate a reasonable transaction fee to pay.

  3. If you use multiple addresses and break transactions into multiple outputs it becomes impossible to trace who gets what.

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#349

  1. UTXO’s are unspent transactions paid to your wallet from other wallets. They represent the sum total of available “currency” in your wallet

  2. If you didn’t have a single UTXO big enough to cover a transaction you would have to incorporate another UTXO and pay the difference back to yourself.

  3. The fee is the difference between the input and the output. The wallet determines the best fee available with the blockchain.

  4. Increase the amount of transactions to others and to yourself.

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#350

1- it’s the amount of funds in the wallet that came from an input transaction.
2- the transaction gets declined
3- the wallet figures out the transaction fee and automatically includes it in the transaction
4- transactions are public but we don’t know who is who. We can also use different outputs from one sender.

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#351

  1. An UTXO can be sent as an input in a transaction becoming then a Spent Transaction Output. Each UTXO represents a chain of ownership implemented as a chain of Digital Signatures where the owner signs a message transferring ownership of their UTXO to the receiver’s Public Key.

  2. That transaction will be refused.

  3. When you are making a transaction most wallets will tell you straight away how much the fee would be for that specific transaction. Other wallets will let you choose the fee, normally the quicker you want the transaction to be confirmed the more you would pay for the fee.

  4. Transaction use all the UTXOs and create different addresses for each transaction and as the addresses are not linked to identity it is difficult to match the UTXO’s with the person.

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#352

  1. A UTXO is a previous transaction to one of your addresses, which you can now use to send to another address.

  2. Your wallet will combine different UTXOs to create the transaction

  3. It scans the blockchain for recent fee amounts, and gives you a suggestion

  4. Using many different addresses as outputs and inputs.

#353

UTXOs are incoming transactions that have not yet been sent to any other addresses. They are linked to a specific private key. When a transaction is authorised by this specific private key, it becomes spent output for the sender, and Unspent Transaction Output for the receiver.

The transaction would take all UTXO that were previously received by the related private key - address pair and sum them all up to complete the transaction. If there is not enough UTXOs to cover the amount we would like to send, the transaction would be declined.

By looking at recent fees to find an optimum fee that is more likely to be accepted by miners to help to speed up the transaction.

A transaction can have multiple inputs and multiple outputs. By sending the amounts from our private key’s UTXOs to other wallet addresses controlled by us, we can increase the privacy, as it will become increasingly difficult to track, who owns those addresses.

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#354

  1. Unspent tx is an output from a private key - so it´s btc sent. This can be somebody sending you btc - your input, or you sending btc to someone else - your output. The sum of output must be same as the sum of the input (minus fee).

  2. The wallet app will send two UTXO to cover the transaction, and the send the rest back to your wallet.

  3. UTXO input = UTXO output-transaction fee.

  4. You can send btc to your own wallet.

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#355

  1. When I get a 20 dollar bill it’ll like an UTXO if I leave it on my desk for the whole weekend. When i use it to buy something, then it will no longer be a 20 bill, rather a 10 and a 5 with changes if my candy costs 2.30.

  2. It takes another UTXO and splits it up, one to you back, the other to the receiver.

3.Most will auto do it in the background and look for the average low cost thats needed to get into the block. Other, you can adjust it and make it very cheap but it wont get on the blockchain sometimes and you have to try your luck with it.

  1. Just scatter your money to other addresses you control. No address has an id.
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#356
  1. Unspent transaction output are the btc amount originally received in a wallet.
  2. you can use multiple UTXO to cover the amount necessary to make a transaction.
  3. The wallet scans the B.C. for a fee that is reasonable to get your transaction processed quickly.
  4. the wallet address is not tied to any personal data. only to other transactions. so nobody really knows who the transaction is going to other than an address.
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#357

  1. Confirmed outputs from previous transactions that have not yet been spent.

  2. The transaction would be declined.

  3. By looking at the fees from previous transactions and calculating a fee that will allow the transaction to be confirmed in a reasonable amount of time.

  4. You can send some Bitcoin to the same account you are spending from or to another bitcoin address that you also control.

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#358

  1. Output from previous transactions that I have received and can be spend.

  2. Transaction will not be valid and therefore will be rejected

  3. The transaction-fee = UTXO input - UTXO output

  4. I would use different addresses for out- and inputs

#359
  1. Describe what Unspent Transaction Outputs (UTXO) are. UTXOs are the outputs of a transaction. Each UTXO must be completely spent in the following transaction.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? UTXOs are summed within a wallet so that you would spend more than 1 UTXO, noting that each UTXO must be fully spent in the following transaction, even if some returns to the spender.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction? The bitcoin wallet would query the latest block transactions to conclude a fee that will nearly guarantee that the transaction will go through but also that will not be the highest fee in the range. The fee is claimed by miners, so similar to a stock transaction on Bid/Ask, you want to spend as little as possible yet get the deal done. Some wallets allow the user to determine fee, but this is usually not the case.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? If you are sending to yourself, use a different wallet on the output.
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#360

  1. Total of unspent transaction sitting in your Wallet

  2. The wallet will construct the transaction rounding down to the higest amouny UTXO;s and then send back the difference

  3. Will look at previous transaction and give a good estimate to get your transaction into the block the fasts way

  4. Use different address IN and OUT

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