A wallet will generate a new address, most wallets should do this already, you might have noticed that every time you want to receive funds a new address will be available to you.
You can also generate them by hand, for that its best to use a CLI tool in Bitcoin core. You can check our Bitcoin programing course to learn how to use it.
For the purpose of simplicity, you can send to the same address. You will receive funds as a new UTXO. 
They are output transactions that have not yet been spent. Once they are spent, they become inputs to another transaction.
Your wallet will look at the sum total of all your UTXO’s and determine whether you have enough UTXO’s to go ahead with your transaction.
It will look at your transaction and also the average transaction fees of the previous blocks on the blockchain and then suggest a fee that is reasonable and will get your transaction confirmed on the blockchain.
You can use different addresses for the receiving transaction. Many outputs can make up an input, and vice versa.
Describe what Unspent Transaction Outputs (UTXO) are.
These are the available bitcoin you can use to transfer to someone else. After you spend them, it becomes a UTXO with the person you sent them to.
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
The wallet will look for other UTXOs that can be added in to cover the TX. If there are not enough UTXOs combined, then the miner will reject the transaction.
How would a bitcoin wallet specify the transaction fee when creating a transaction?
It looks at the previous average fees and suggests a fee in line with the average
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You can have multiple wallets and when you send the tx to someone else, also include a secondary wallet address to send to. That way 3 outputs would be generated. (your recipient, wallet #1, wallet #2)
Describe what Unspent Transaction Outputs (UTXO) are.
UTXO’s or Unspent Transaction Outputs are the product of BTC transaction that wallets can use to create more transactions.
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
Your wallet would then combine two or more UTXO’s to make the transaction possible. The amount would be purchased and send the remainder back to yourself if needed.
How would a bitcoin wallet specify the transaction fee when creating a transaction?
Output UTXO - Input UTXO = Fee
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
There can be several, various inputs and outputs. You could disperse of the money to however many addresses you choose.
Describe what Unspent Transaction Outputs (UTXO) are. - They are the unspent inputs you have received
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? - the wallet will choose which single UTXO’s to use for the transaction and send you back the “change” after the fee to the miner.
How would a bitcoin wallet specify the transaction fee when creating a transaction? - It will tell you the fee for the transaction that you are wanting to make based on the information that the wallet is collecting based on prior fees etc.
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? - privacy is increased as you are not able to identify where the input or the output comes from making it a completely private transaction. The open source code reveals only the public key codes with have no identifying information.
Describe what Unspent Transaction Outputs (UTXO) are.
UTXO is received by address/wallet from blockchain. UTXO are unspent coins that has not been used.
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
If UTXO is not large enough then it will be rejected unless you add more input.
How would a bitcoin wallet specify the transaction fee when creating a transaction?
Bitcoin wallet calculate the fee when a transaction is made; fee is implied when input is larger than the output. Input = Output+ transaction fee. Miner will usually mine for a larger fee. Larger fee will result to faster transaction.
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
By creating multiple output addresses.
Entries on the blockchain detailing individual amounts sent to an address. They are outputs from a previous transaction.
All UTXOs are combined to provide sufficient input.
It’s calculated based on previous transaction fees to ensure it will be processed in an acceptable time.
Using multiple addresses would mean that they don’t clearly relate to the same person.
UTXO’s are outputs which from a receiver’s point of view become inputs, forming a total sum of bitcoin available in your wallet.
The wallet would combine two or more UTXO’s from your wallet, send an appropriate amount for the transaction and send the rest back to you, minus the fee of course.
It would take a look at the transactions on the block and calculate an appropriate fee that would effectively increase the chances of placing the transactions on the block, as miners would not want to confirm your transaction if the fee wouldn’t be high enough.
Using multiple inputs and outputs.
UTXO’s fulfil the role of constructing transactions. UTXO’s are the inputs for another individuals wallet. This is how the balance of a wallet is calculated.
It means the wallet balance is too low. Gather more inputs!
The fee is calculated from the remainder of all inputs minus the outputs of a transaction.
You can splinter the outputs into numerous addresses that one “may or may not own”, with the real recipient among many outputs.
UTXO is the amount that we receive by someone else. The total amount of the UTXO gives us our wallet balance.
The transaction would not be confirmed.
It would check the blockchain and pick the one with lowest transaction fee.
Instead of sending the whole amount at once, I could create many transactions and I could send my balance to another wallet that I have.
Homework on Bitcoin Transactions and UTXO - Questions
UTXO’s are unspent transactions.
You would use multiple UTXO’s together to cover the transaction and then send the change back to yourself minus the fee.
Your wallet will calculate the fee for the transaction by taking into account current network conditions and transaction size.
Increase the number of output addresses. Since addresses aren’t linked to any identity privacy is high.
1.) UXTO’s occur when someone sends a transaction to my wallet address and adds all inputs. These are not actually added to the wallet until I either send to someone else or to myself.
2.) The Blockchain would reject this transaction because it makes no sense.
3.) This can happen in one of two ways. The fee can be automatically determined by the Blockchain or fee can be manually inputed
4.) On both sides, input/output, only the public keys are visible in the transaction log. Private keys never appear. No personal information is ever exposed which maintains privacy.
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.
1.UTXO or unspent [transaction]outputs are used in cryptocurrency transactions. These are the transactions that are left unspent after someone completes a transaction, similar to the change someone receives after conducting a cash transaction.
The transaction is cancelled.
The difference between the inputs minus the outputs.
By having the choice to have multiple output addresses.