Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#3642

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

The fee is merely implied as the difference between inputs and outputs. Wallets usually calculate the fee based on the recent confirmed tx in a block. Some might have more advanced methods, but none rely on the specific miners to make the prediction since miners don’t determine fees by themselves.

You need the private key to sign the tx, not sure what you mean by using the private key in this regard. Using multiple outputs to send change back to yourself to a new address is the most simple way of increasing privacy. :slight_smile:

1 Like
#3643

The fee is always the difference between inputs and outputs. The wallet will do this behind the scenes for you when it determines a proper fee. :slight_smile:

1 Like
#3644

Thanks for the input!

#3645
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO is unspent output
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    If your total of all UTXO’s covers your transection than you can exercise that transection.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Inputs – Outputs = Transection Fee
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Because output is created by SHA-256 algorithm so there is no possibility to know who is sending and who is receiving.
1 Like
#3646

SHA256 is used to get transaction ID (txid) not to encrypt them, transactions are public and anyone can view them.
The most basic method you can use to increase privacy on Bitcoin is to use a new address every time you receive funds or when you are sending change back to yourself.
From the explorer it will not be possible to determine what part of the tx was used to pay a service and what went back to you. :slight_smile:

#3647
  1. UTXO’s are the previous inputs that are summed up by the wallet and ready to become output in next transaction.
  2. All UTXO’s summed up has to have enough amount for transaction and fee. Otherwise the transaction is not possible.
  3. Transaction fee is the difference between input and output.
  4. Many outputs and addresses can be made from one input.
1 Like
#3648
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXO’s are inputs to your wallet that your private key confirms you are able to spend, ie an available balance.

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

Multiple inputs would be used to create the transaction and the outputs would be the cost of your transaction plus your change (also a transaction) and also a fee, which is the difference of Input-Output. If you didnt have enough UTXO’s then the transaction would be declined

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

It would read the blockchain and work out what a reasonable fee would be based on previous fees. It is demonstrated by subtracting the output from the input. It can be specified or implied and depending on the amount can increase or decrease the speed of the transaction as it goes to the miners.

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

Because a name isn’t specified with the transaction, only addresses, and you could send your coins to another address you own.

1 Like
#3649
  1. All of the UTXO’s in your wallet will represent the balance.
  2. Wallet will check the combined total of your UTXO’s and then execute the transaction, in case if the total isn’t large enough then the transaction will be declined.
  3. The fee is calculated upon the transaction by the wallet, it will calculate it and provide the information to you.
  4. Many addresses and outputs can actually result from one input.

Thanks @Alko89 for feedback, the answers were fixed accordingly.

1 Like
#3650

  1. Outputs from previous transactions you have received, but have not yet spent.

  2. As long as the sum of all your UTXOs cover the transaction it will be accepted by the blockchain, otherwise it will be declined.

  3. Most wallets will look at previous transactions and decide on a fee that will get you into the blockchain relatively quickly. Some wallets allow you to choose your own fee, so you can decide how much you want to spend based on how fast you want to get your transaction added to the blockchain.

  4. No one on the outside can see who holds the addresses. You could be sending all the funds to another wallet that you control, and no one would be able to tell.

2 Likes
#3651

Thank you for underling this!

#3652

The sum of all your 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:

1 Like
#3654
  1. UTXOs are tokens that addresses received that are equal to the transaction inputs when fees are added.
  2. Then your wallet will add UTXOs together until it has enough UTXO to cover the desired spend. Any leftover balance would be returned to you in the form of a new UTXO from that transaction to your address.
  3. Most wallets offer a recommendation on fee based on predicted time to confirmation 5 blocks, 10 blocks, etc. This allows the user to set their own fee for BTC usually in sastoshis per kilobyte of data, based on how fast they want the transaction completed. Some wallets however predetermine the amount to paid based on user settings.
  4. You can send more input than required and on the output side you can direct the leftover UTXO to multiple addresses making it appear as though it was intentional.This would prevent anyone from looking for a specific amount of token from just searching for that amount.
1 Like
#3655

1.UTXO’s are transaction fees left over from recieved transactions.
2.The transaction would be unable to be broadcasted to the network.
3. As unspent transaction output and spent transaction output.
4. Increase your adresses holding your funds.

1 Like
#3656

UTXOs are outputs of a transaction, not the fees. The sum of them 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 not be broadcasted. :slight_smile:

#3657

oh ok thank you :sweat_smile:

#3658

Describe what Unspent Transaction Outputs (UTXO) are.
UTXOs are the positive balance that can be spent.

What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
UTXO will be put together until you have enough. If still not enough to cover the transaction will be declined.

How would a bitcoin wallet specify the transaction fee when creating a transaction?
You can calculate the transaction fee by deducting the input from the output.

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Wallet generates a different public address everytime it does a transaction, whether it’s an input or an output.

1 Like
#3659
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • UTXO is a transaction that made from input to the output, the amount of transaction made the output is the balance
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • UTXO can be used as input summed up all the amount for transaction and fee, the amount has to be enough for the transaction, if not, it will be declined.
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • By calculating the difference between the input and the output.
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • The transaction uses addresses which is private, many addresses and outputs can be result from one input.
1 Like
#3660

1.Change left from transaction
2.wallet would not contruct transaction, just tranffer your baance to next block
3: it would check transaction fee rates on blockchain
4: send it to more than one output

1 Like
#3661

You can use multiple UTXOs as inputs to a new tx. If you still don’t have enough then the wallet would not be able to conduct the tx.
Not sure what you mean by transferring the balance to the next block, if there is no tx the UTXO remains unspent in the block :slight_smile:

#3662
  1. UTXO isthe incoming transaction amount that you receive and can spend. This becomes input in an outgoing transaction then.
  2. If you don’t have a dingle UTXO large enough for a tx, you can compose input of 2 or more UTXOs.
  3. Transaction fee is based on previous transaction fees to get you reasonably fast into the block. They are not specified separately - this is input minus output.
  4. You can use multiple inputs and outputcs.
1 Like