Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#3804

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Blockchain doesn’t store the balance of your BTC so the unspent transactions representing your balance.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Multiple unspent transaction outputs would be used for the transaction

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    the difference between the inputs and the outputs

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Use multiple outputs. Sending to many addresses including your own

1 Like
#3805

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    A UTXO is an amount that is transferred to a Bitcoin address during a transaction.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Multiple UTXOs can be combined to cover a transaction and the remainder is returned to your wallet.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Input - Output = Fee

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Using multiple addresses can make it more difficult to track transactions.

1 Like
#3806

Describe what Unspent Transaction Outputs (UTXO) are.
UTXO is the current balance that your wallet keeps track of, which is available to be spent.

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

How would a bitcoin wallet specify the transaction fee when creating a transaction?
The fee is the difference between the total inputs and total outputs.

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You could use several inputs and outputs to increase privacy, such as having some go back into a newly generated wallet that you own.

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#3807
  1. Unspent money in the wallet
  2. The wallet combines all the UTXOs, send the transaction and sends back the difference minus the fee
  3. It is the difference between the output and input
  4. Have multiple inputs and outputs?
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#3808
  1. UTXO are the wallet balance.
  2. if no UTXO then cannot make any transactions.
  3. input - output but sometimes fee is not specified, the wallet should figure it out.
  4. using different addresses for each TX.
1 Like
#3809

  • Describe what Unspent Transaction Outputs (UTXO) are.

    UTXO’s are the sum of transactions that have been sent to me that I can spend.

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

    It will use multiple and send the remainder back to self. If still not enough then your tx will not be confirmed or completed.

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

    It is implied based on network congestion. Also you can manually adjust fee to increase/decreas your chances of being verified.

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

    By having more than one output address and sending some of the funds back to self at a different address.

1 Like
#3810
  1. An output from the previous transaction that are unspent. The total of all your UTXO is the balance you have in Bitcoin
  2. You would not be able to make the transaction. You would need to combine it with another(s) UTXO to equal/or greater the output needed to cover the transaction.
  3. Inputs - outputs = fees, which is what is left of the inputs.
  4. You can transfer the inputs to multiple wallets and send a part of it in your own wallet.
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#3811

  1. UTXO’s are received unspent outputs inside a wallet that can be used in new transactions.

  2. If the UTXO was not large enough for the transaction, you could then use another UTXO to input on the transaction. If balance was still short the transaction would not go through.

  3. It would be the total input minus the total output.

  4. You could use these transactions by sending yourself or multiple receiving addresses bitcoin.

1 Like
#3812
  1. UTXO are basically inputs that a wallet has received and whose sums have not yet been spent.
  2. Although a single UTXO is not large enough to cover a transaction, it is added to all the other UTXO that the wallet has, in order to achieve it.
  3. It is not specified, but implicit in the subtraction of input - output
  4. By creating more output addresses, since due to encryption it is impossible to know who they belong to.
1 Like
#3813
  1. UTXO are trancactions that you have receive in your wallet and you havent send it somewhere else
  2. Transaction cannot be done, must add more value in order to cover the tx
  3. is the difference between UTXO input and UTXO output
  4. use your own node
1 Like
#3814

  1. UTXOs are outputs from transaction that are in the wallet and they haven’t been spent yet.

  2. The wallet would check with blockchain all the UTXOs that I have, it would sum up all of them and if the balance is sufficient will create a transaction (from that many UTXO as is needed).

  3. Fee is the difference between input and output. Wallet, when creating a transaction, picks up the fee that is the best for you (so it’s not too high and transactions will not take too long to get confirmation). In some wallets you can choose the fee yourself.

  4. By creating more outputs.

1 Like
#3815
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • UTXOs are outputs from previous transactions that are unspent.
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • You cannot make that transaction. You can however use multiple UTXOs and add them up to cover the transaction and the balance will be sent back to you.
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • Tx Fee = Input - Output
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    -By sending the outputs to many addresses which belong to you
1 Like
#3816

Describe what Unspent Transaction Outputs (UTXO) are.
UTXOs are the balance in your wallet, and are inputs for transactions you initiate.

What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
If a single UTXO is not large enough then use additional UTXOs available to the wallet.

How would a bitcoin wallet specify the transaction fee when creating a transaction?
Fees are calculated through a math I haven’t fully grocked. The fee visible in the transaction is the difference between the inputs and the outputs.

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You could send arbitrarily large or small transactions from wallet to wallet, maybe a form of obfuscation, but I suspect there are tools that can suss this out quite easily.

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#3817
  1. its an output from a transactions which is yet to be spend.
  2. it would be denied
  3. it checks the blockchain and makes an fee estimate
  4. by using multiple outputs i would own
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#3818
  1. UTXO’s are inputs from previous transaction outputs (it is what has been sent to you)
  2. My wallet will calculate my other UTXO’s, if the sum is enough to cover the transaction cost, then the transaction will be executed. The overspill output will be sent back to you (maybe under a new address)
  3. Your wallet will recommend a reasonable fee, which is calculated based on your transaction history and required transaction speed
  4. Generate new addresses to send back to yourself making it difficult to recognise or track a return transaction
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#3819

Transactions on the Bitcoin blockchain are different than typical bank transactions. There can be more than one input and more than one output on every single transaction, meaning a single transaction can send bitcoin to many addresses at the same time. UTXOs are all the outputs of a transaction that haven’t been spent yet by the receiving address, or, from the opposite point of view, all the inputs of a transaction that you are about to perform.

If one of your inputs or UTXOs is not enough to cover the full amount of a transaction that you want to send, another one of your inputs must be added to the transaction, even if the total of both is higher than the amount you want to send. The rest would be sent to a second output that typically would also belong to you.

On a transaction, the difference between the sum of all the inputs and all the outputs is the fee that was paid for that transaction. Obviously, the inputs are always a bigger amount than the outputs. This difference is not explicitly stated on the transaction, but it is understood that the miner who made the block keeps it.

The fact that the addresses sending and receiving UTXOs are not the same as a wallet bring a layer of privacy to transactions, as there is no easy way to tell if the receiving address also belongs to the same person that owns the sending address, or if the receiver is receiving transactions to many different addresses.

2 Likes
#3820
  1. Are transactions that you received and haven’t send in a transaction as inputs yet, kind like your funds in your account.
  2. Then you would use mora than one UTXO until you cover the Transaction.
  3. After you subtract the amount that you send to someone and the amount you send to yourself (change) from the total transaction.
  4. You can distribute your inputs into many different outputs that you own.
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#3821

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

The sum of BTC transferred in inputs to your wallet (outputs in the source TX) and that you haven´t yet used as output in a new transaction

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

that tx will not run

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

Tx fee = Input - Output

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

receiving differents tx in a different address
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#3822
  1. these are the transactions that your wallet has received. The sum of these is the total you can send, or the amount you own.
  2. You would only be able to send the amount of the UTXOs minus the fees.
  3. It would look to see what the recent fee was to get the transaction on the blockchain.
  4. you could send the “change” to a new address or wallet instead of sending it back to the same wallet.
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#3823

Very nice! Thanks Alko :+1: