- These are funds that have been sent to you, but have not been spend yet. The sum of them are basically the balance of your wallet.
- Then you would not be able to pay for your transaction.
- It would be the difference between input and output.
- By creating multiple wallets and not re-using them.
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1: when a user receives bitcoin that amount is recorded within the blockchain as utxo. It is the amount of digital currency you have in your wallet.
2: If you did not have any single utxo that was large enough to cover for a transaction the wallet would query the blockchain for other utxos. The blockchain would then give back a list of transaction outputs. The wallet would then add all the transaction outputs and tell you how much output you can spend.
3:The fee is never specified but implied, since
Input = output + fee
Therefore, fee = input - output.
4: Since a wallet can have multiple receiving addresses, it is not easy to tell whether the wallet that owns the input address also owns the output address or not. This increases the privacy and unanimity of transactions.
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Many reasons. One is tax fraud. In our country they tax every trade but not hodling so you must prove weather you earned the money by trading or just by hodling. Can be a huge issue when you eventually want to cash out your gains.
The sum of all your UTXOs is the balance of the wallet.
You can use multiple UTXOs as inputs to a new tx. If you still don’t have enough then your tx would be rejected. 
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1. Describe what Unspent Transaction Outputs (UTXO) are.
UTXO are results of previous transactions that have not been used for new trasnactions. These unspent transactions are used to determine the funds you have available instead of a balance sheet.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
In the case of a deficit in either a singular of sum of UTXO it is not possible to conduct the transaction. This will be (in)validated by nodes on the network.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
The transaction fees on the BTC network are determined by the sheer size of the transaction made. This size is determined by the amount of inputs and outputs used in conducting the transaction.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
The big difference with a traditional balance sheet as opposed to UTXO is the fact that the UTXO for a certain address can be found “scattered across” the blockchain, instead of a particular number. In addition, the usage of multiple inputs and outputs make it possible to diversify and scatter/spread funds across addresses that don’t have to be yours.
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- UTXO are transactions that the receiving private key can spend in new transactions.
- Does not matter that you don`t have ANY SINGLE UTXO that is large enough to cover your transaction. Your spending allowance is a sum of all UTXOs this sum needs to be larger to cover your transaction and fees.
- Transaction fee=input-output
4.Use multiple output addresses.
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- UTXOs are outputs from other transactions that have not been spent. Once they are inputted into a transaction, they become spent and the outputs of the following transaction become UTXOs. Your wallet uses your private key to make inquiries to the blockchain to find and sum up the UTXOs you have available to spend.
- Any transaction without sufficient UTXOs to cover it goes unprocessed and is ignored.
- Your wallet makes inquiries to determine current transaction fees and creates the fee for your transaction in line with those fees.
- Breaking down outputs to smaller amounts sent to multiple addresses that are your own wallets could possibly increase privacy.
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- UTXO’s are actually what could be considered the actual Bitcoin. They are the transaction outputs that exist when a wallet sends bitcoin to another wallet. The UTXO is the transaction that the receiving wallet owner collects.
- If one doesn’t have a single UTXO to cover a transaction, then other UTXO’s that a wallet owns is pooled together and the difference left, if any, is sent to the wallet of the owner to originated the purchase.
- The transaction fees are listed separate as its own line item (so-to-speak).
- To increase the privacy of a transaction one could increase the number of inputs and outputs used for each transaction, but also one can increase the amount of UTXO’s to include multiple wallets that one person owns (sending bitcoin to themself using many owned wallets).
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- The sum of the UTXOs make up the balance a particulate address (wallet) can spend.
- Enough UXTOs will be sent to over the transaction, with the balance minus the fee being returned to the originators wallet.
- The bitcoin wallet will scan the block chain for previous transaction amounts and make a proposal that is likely to be successful.
- I would imagine that sending many payments to different wallet addresses and repeating the process a couple of times would result in quite an obscure trail and uncertainty regarding who owns the final addresses
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- Describe what Unspent Transaction Outputs (UTXO) are.
Unspent Transaction Outputs (UTXO) are the inputs when we receive money from other adress and also in the case that we send a transaction to someone, our output is going to be the UTXO from the next address that we sent to
-What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
The transaction would not happen…?
-How would a bitcoin wallet specify the transaction fee when creating a transaction?
Tx Fee= Inputs-Outputs
-How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Using different wallets
Thank you, Ales. May I ask a question? Is it true that in earlier years, we did not have to pay taxes on crypto sales? I have been holding since 2017, but my Turbo Tax only started asking about crypto gains starting last year, unless I’m mistaken. Do you think this is fair, given that the governments have done nothing to contribute to this system? Why should they take any profits from this innovation? And do you think it’s possible that down the line we can challenge the taxation? Are there any upsides to government involvement in crypto? What benefit could their regulations have? (Ok, that was several questions, sorry.)
You can use multiple UTXOs as inputs to a new tx. If you still don’t have enough then your tx would not happen.
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- Describe what Unspent Transaction Outputs (UTXO) are.
It is essentially the amount of bitcoin you have left after it’s been sent to you. It is stored on the blockchain and tied to your public key.
- What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
Your wallet adds up all the UTXOs in the blockchain to see if it is enough to cover the transactions and the fees if it is not enough then the transaction will not be processed.
- How would a bitcoin wallet specify the transaction fee when creating a transaction?
The wallet will check previous transactions on the chain and calculate an appropriate fee to process the transactions quickly this can be specified by input - outputs
- How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
By increasing the inputs and outputs it makes it difficult for others to figure out where the transactions are going as it could also be going back to your own wallet.
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Yes at the beginning crypto was to small to be interesting to be governed and most probably thought it would die out. But after the bull run of 2017 things changed and the quickly started figuring out methods how to regulate it.
How this is regulated though is highly dependent on the country you pay taxes (and how the wind is blowing because there are no certain rules in place how to do it) to so I suggest you talk to your accountant. Though mine literally said he doesn’t have the balls to suggest anything at this point in timeXD
Well yea, but what can you do? 
The best option to avoid taxation is to use stable coins, the problem is its hard to find a store that would accept stable coins to buy groceries.
I’m not sure about that one either 
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Describe what Unspent Transaction Outputs (UTXO) are.
UTXOs are the number of wallet inputs you have that have yet to be “spent”, or sent as output transactions. -
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
It is acceptable to not have one single UTXO large enough to cover for your transaction, as long as you have multiple UTXOs that sum to an amount that covers your transactions (including a transaction fee, which is determined by the wallet). If you do not have enough BTC inputs in UTXOs to cover the cost of your transaction in BTC, the transaction will be rejected by the miners/blockchain. -
How would a bitcoin wallet specify the transaction fee when creating a transaction?
A BTC wallet totals the UTXOs and subtracts the transaction outputs. The remainder becomes the transaction fee. -
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You could send UTXOs to yourself in multiple transactions to different wallet addresses you own (or possibly do not own).
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Describe what Unspent Transaction Outputs (UTXO) are.
The blockchain doesn’t actually store your account balance, it only stores transactions. The sum of unspent transaction outputs sent to you is your balance, which your wallet has to calculate for you. -
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
If the sum of your UTXO is not enough to cover your transaction, your transaction will not be accepted by the network. -
How would a bitcoin wallet specify the transaction fee when creating a transaction?
I don’t remember this being covered in the lecture. I read online that a transaction fee is optional, but will tend to make your transaction get processed faster. I also heard that the wallet can recommend a transaction fee based on previous transaction fees. Input = output + fee -
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
If you send some money to yourself, no one can tell which transfer was to yourself and which transfer was to a wallet not controlled by you.
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-Unspent Transaction Outputs (UTXO) are the balance in your wallet after you subtract the transaction plus the fees.
-If you don’t have any single UTXO that is large enough to cover for your transaction, then multiple transactions will be used and your Unspent Transaction Outputs will be returned to your wallet.
-A bitcoin wallet specifies the transaction fee when creating a transaction by checking the blockchain network to determine a fee that will be processed in a reasonable amount of time.
-Transaction inputs and outputs to increase privacy in your transaction? It’s more difficult to track newly created wallets. It is also difficult to track the new address of the UTXOs. So, sending to newly created wallets and sending the UTXO obscure exactly where the transactions are going.
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Thanks for your response. I like the idea of a crypto-linked credit card, so that you could buy your groceries without every cashing out (and getting taxed.) Maybe we can just keep our crypto in the loop this way.
I mean, the money I’m investing in crypto has already been taxed.
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- Describe what Unspent Transaction Outputs (UTXO) are. UTXO is the unspent digital currency remaining after executing a cryptocurrency transaction.
- What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? Combine more than one UTXO to pay for transaction.
- How would a bitcoin wallet specify the transaction fee when creating a transaction? Transaction fee is never specified anywhere, if inputs = outputs the transaction fee makes up the difference.
- How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? Send a transaction back to yourself.
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UTXOs represent those transactions received by a wallet that have not yet been spent.
A sum of all the UTXOs for a given wallet indicates the total value available / available balance ready for use by said wallet. -
If I have multiple UTXOs in a wallet, but no single UTXO is sufficient cover a desired transaction,
the wallet may combine multiple UTXOs to cover the transaction. -
A bitcoin wallet may query recent transactions from the blockchain to determine a fee sufficient to ensure my transaction is processed (and so appended to the blochain) relatively quickly.
A wallet may also allow the owner to specify / modify the fee value. -
If I hold the private keys to multiple addresses, I may have UTXOs from some party and then redirect (some part of) that value as an output to another address of my own.
Though the originating party knows they sent some value to my original address,
they have no way of knowing the final address is also mine. Short of publicly broadcasting such ownership, no one can truly know I am owner of whatever value may be associated with a given address.
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