Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#3704
  1. Amounts sent to your address that you haven’t spent in another transaction
  2. You’ll have to add together multiple UTXO’s and send your self the change
  3. It’ll calculate it by output - input
  4. Use many inputs and outputs.
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#3705

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO refers to the amount of digital currency someone has left remaining after executing a cryptocurrency transaction

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

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Calculcated form input - output.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    It is not visible who owns the wallets the outputs have been sent to.

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#3706

1 ) UTXOs is the total output amount of previous transactions you have received as an input on a certain wallet that still has to be spent. Your “balance”.

  1. The wallet will add up other UTXOs to reach the needed amount. The transaction will be declined by all the nodes of the blockchain if this cannot happen.

  2. It will be automatically deducted from the UTXO of that specific transaction looking for recent tx fees on the blockchain. Input - Output = Fee

  3. You could make a lot of transaction to multiple addresses and to yourself. From outside it is impossible to know which transaction went where or who is the owner of a certain wallet address.

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#3707
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXOS are outputs from other wallets that are recognized as unspent money assigned to your wallet.

  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 execute and be invalidated.

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

It would create an output equal to the input , substract the fees and return the unspent amount to your original wallet .

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

Transaction inputs and outputs increase privacy in the transaction because a third party seeing the transaction has no clue who sends to who and who received what. I can be seen that a transaction was executed for the “xx” amount, but never specific who did it with a name and last name.

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#3708

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

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#3709
  1. Describe what Unspent Transaction Outputs (UTXO) are. They are outputs from previous transactions that haven’t been used by the receiver yet.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? The nodes will ignore the TX and won’t be broadcasted.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction? It will be automatically calculated subtracting the output to the input.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? The addresses are not associated in any way to a person in the blockchain.
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#3710

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

What about when you withdraw from an exchange where you did KYC?

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#3711

1: UTXO’s are outputs from previous tx’s that have not yet been spent, and form part of a new input for new transactions

2: It does not matter as all inputs need to be spent in a tx. ‘change’ will be returned to the wallet less a fee as a new UTXO.

3: Inputs minus outputs equals fee

4: As all the inputs need to be spent, it is not immediately obvious what outputs are destined for who, adding a layer of privacy to the tx

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#3712

UTXOs (Onspent TX Outputs) become inputs to a new tx. But you don’t need to spend all of them every time. You can cherry pick the UTXOs, but you must spend the entire UTXO. :slight_smile:

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#3713

  1. It is basically the balance that you own for a specific coin, sort of balance on the blockchain link to your wallet adress

  2. it won’t work 'cause the node will not autorize the transaction

3.It will look for the best option for you as fees, referring from the network at this time. And fees = inputs-outputs

  1. If you have different wallet it will be harder to know the owners of the wallet
    or you can go with a Ledger, cold storage wallet
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#3714

  1. the total sum of inputs sent to your wallet.

  2. the transaction would fail. The nodes would over look the transaction.

  3. most wallets derive the fee by looking at recent fees on the blockchain. Other wallets give you the option to choose your fee.

  4. when a transaction is sent to someone else, you can also sent some to yourself, making the block more difficult to trace the owner of the new utxo.

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#3715
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXOs are the amount of cryptocurrency that is allocated to you in the ledger based on how much you have received in your wallet. It is the output of a prior transaction, and will be the input of a transaction where you are sending cryptocurrency to someone else.

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

It will sum up other UTXOs to the input of the transaction. If there aren’t enough in total, the transaction will be invalid.

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

The transaction fee is the inputs minus the outputs.

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

You can create multiple BTC wallets with different addresses and send BTC to several different wallets in the same transaction, confusing onlookers.

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#3716

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO is the balance left on your wallet. They are whole and fractional outputs of previous transactions.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    You got to make your bread and start sending money to it. Transactions can’t be processed.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The wallet looks at transactions on the blockchain and suggest what fees should be processed. Inputs - outputs = fee

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Using different inputs and outputs to send/receive.

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#3717

  1. UTXO’s are outputs which have been credited to your private key but are unspent, you can then turn them into inputs to make your won transactions.

  2. The blockchain would reject your transaction.

  3. Input - Output = Fee

  4. The more inputs and outputs, the less traceable your transactions become, as they’re spread wider through the network.

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#3718

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO’s are the output of an incoming transaction that describes an amount of spendable bitcoin for a private key.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    The wallet would query the blockchain for the UTXOs and calculate there’s not enough UTXO and not create the transaction.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It doesn’t. The fee is calculated by : inputs-outputs=fee.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Bitcoin addresses are anonymous and you have to send all inputs for a private key in a transaction. By using different addresses, it’s impossible to tell who’s sending to whom from the outside.

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#3719

The sum of all UTXOs is the balance. These are outputs from a tx that have not yet been used as inputs to a new tx.

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

You can use any wallet that doesn’t reuse addresses and generates a new one when you are receiving funds. :slight_smile:

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#3720
  1. An input that not has been output yet, the blockchain keeps track of this inuts and your wallet figures out your balance.
  2. The transaction would be declined.
  3. The difference between input and output
  4. You can be using different addresses
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#3721

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

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#3722

Thanks for that input :slight_smile:

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#3723

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are the transactions that are received to a wallet and can be spent. They determine the wallet´s balance.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    The wallet looks for other UTXOs in the account and if it isn´t enough then the transaction won´t be accepted.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The wallet calculates the transaction fee with the following formula: Input-Output= Fee.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    By spreading my UTXOs to different addresses that I posses.

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