Homework on Bitcoin Transactions and UTXO - Questions

[Kae_Y]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   Wallet balance
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   It will decline
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   Fee=input -output
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   You can create many outputs and nobody would know where you have sent your coins.

[Alko89]

@patricia2157

It is the amount in digital eg. BTC that one can use in a new transaction/s. But the input has to equal the output.

The sum of all your UTXOs is the amount. And the output doesn’t necessarily have to be equal to the input, the difference between them is defined as a fee for the miners.

@patricia2157

Not sure about this becos the wallet has the private key to facilitate the transaction and the actual transaction recording is done via the adding to the blockchain by the miners and it will amongst a lot of other transactions that the miners are adding into a block. It would be difficult to trace it backwards I would have thot. Maybe not impossible

It can be quite easy, especially in case you are reusing addresses and you withdrew from an exchange where you did KYC. The most basic method to increase privacy is to use a new address every time you receive funds or send change back to yourself. From the explorer it will not be possible to determine what output of the tx was used to pay the service and what went back to yourself.

[Alko89]

@Kae_Y

Wallet balance

The sum of all your UTXOs is the wallet balance.

@Kae_Y

It will decline

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

[yoeby]

• Transactions that you can spend
• The sum of your UTXOs is your balance

• The majority would reject your transaction, therefore it won’t be added to the blockchain

• It’s derived based off the cost of getting your transaction into the blockchain fast enough

• The transaction inputs and outputs come from addresses
• Many addresses can come from one wallet
• So its impossible to truly know which transactions are going where

[nohornsnotail]

1. UTXO’s are inputs to an address that have not been spent.
2. The transaction will fail.
3. The wallet will look at a list of recent previous transactions on the blockchain and determine a reasonable fee that will try to ensure the confirmation of the transaction.
4. One could use many inputs and outputs addresses to attempt to hide the true meaning of the transaction. When many output addresses are used, it is not immediately clear who is the recipient of the funds because transactions could be sent to another wallet owned by the same person or back to the same wallet that was also the input to the transaction.

[CryptoJedi1]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   They are the outputs for balances that enter your wallet and which you still have the ability to spend.

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

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   A bitcoin wallet sets a reasonable fee based on transactions. Fee is the difference between the inputs and outputs.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   You could generate multiple outputs so it is hard to tell which output goes where or back to sender.

[Dsmo95]

UTXOs are unspent outputs a user receives into their wallet and is the total amount that can be spend.

2. If UTXO doesn’t add up to correct sum, the transaction never goes through and is considered invalid.

3. The wallet will query the blockchain for a reasonable fee that will get your transaction on a block at a reasonable speed.

4. Always generate a new address especially with the outputs. Hard to tell which transaction when to a person or went back to the sender. Also it hard to tell the real amount that was send and spend.

[Semicryptpro]

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

These are what my wallet will access on the blockchain and allow me to use as “money” to spend or send to someone else via transactions that my wallet can construct.

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

Then I will not be able to complete that transaction or select another transaction where my UTXO is enough to cover it.

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

It depends: 1) wallet will look for similar sized transactions and use that as a basis to influence the fee 2) current activity on the blockchain will influence the fee 3) you can adjust settings in your wallet to offer greater leeway (increase slippage) to the miners and pay more in fees for faster and successful executions of transactions.

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

Some Wallets allow you to change addresses for Bitcoin and it’s Forks. This setting change will not work for other crypto currencies though. You could also have more than one Wallet.

[Amid]

1. Total amount of output received from other wallet transaction input (for example my father sending me 0.2 BTC). Wallet can query in blockchain how much total unspent transaction I have to see how much total BTC I can spend

2. It would go as invalid or unable to proceed with the transaction unless an alternative transaction exists

3. Based on the recent transaction with similar values and displaying that as the delta between input and output

4. generate multiple outputs

[Alko89]

@yoeby

The majority would reject your transaction, therefore it won’t be added to the blockchain

@nohornsnotail

The transaction will fail.

@CryptoJedi1

The transaction would not go through. It would be declined and not sent.

@Dsmo95

If UTXO doesn’t add up to correct sum, the transaction never goes through and is considered invalid.

@Semicryptpro

Then I will not be able to complete that transaction or select another transaction where my UTXO is enough to cover it.

@Amid

It would go as invalid or unable to proceed with the transaction unless an alternative transaction exists

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

[Andrija]

1. UTXOs are received transactions which are not yet spent and can be used as an inputut for another transaction.
2. The transaction would be deined becuase there not not enough UTXOs to cover the transaction amount.
   3.A bitcoin wallet proposes a fee, based on current and previous transactions in the blockchain; input=output + proposed fee
3. Generate more output adresses, more private/public key pairs.

[GiuZuk]

1 Unspent transaction outputs, what is steel in the wallet.
2 There will need more UTXO, to complete it, if not, no utxo, no transaxo!
3 Input transactions minus output transactions.
4 Many inputs / outputs address are generate for every transactions.

[JamesM]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   So an UTXO is the difference between the amount that you want to send to someone else to pay for something, any any excess balance that you may have as an input, less the fees charged to make that transaction.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   If you do not have any single UTXO that is sufficient to cover your transaction, it could be added to another input value. If there is no other input value in that wallet, then the transaction would not be accepted.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   The wallets often offer a recommended fee. They can check the blockchain to view the charges and to ensure that the fee charged would be sufficient to get the transaction included into the next block. The fee charged is the difference between the total UTXO´s spent and the total available inputs.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   You can send to several addresses including your own in another wallet or the same wallet.

[Alko89]

@JamesM

So an UTXO is the difference between the amount that you want to send to someone else to pay for something

UTXO is the output of a tx that has not been spent. The sum of them represents your balance. If you want to spend an UTXO you use it as an input to a new tx and the outputs of that tx are newly created UTXOs.

[JamesM]

cool, thanks a million!

[Arie]

UTXOs are money you can spend based on a sum of your inputs, contracted by fee
No transaction
The wallet checks a blockchain and specify the transaction fee.
There are two ways. Use a number of different addresses while making transaction and receiving money. Ask your friend to fraction payments, increasing its amount, and doing the same by your own while paying somebody.

[Kevin_Desbiens]

They are transactions received that sits in the wallet.

The sum of 2 or many UTXO will be used for the transaction and the remainder will go back to the wallet.

To calculate the current Bitcoin fee you then multiple the size of your transaction in bytes by the fee per byte you wish to pay. The result will be in Satoshi’s.

By having multiple transactions makes it harder to pin point which one is yours if you jungle between many wallets.

[Rankyn]

@ivan

Homework on Bitcoin Transactions and UTXO - Questions

1. Describe what Unspent Transaction Outputs (UTXO) are.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?

1. UTXOs are an aggregate of unique transaction inputs to your bitcoin wallet
2. Your wallet will aggregate two or more UTXOs that sum higher than the intended transaction value and send the balance over fees back to your wallet.
3. It chooses the best transaction fee on the blockchain that will optimize the time spent by your transaction to be confirmed by miners.
4. Because some of the outputs return to your wallet, it will be difficult to trace back all transactions and balances in your wallet.

[Joeyj]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   Unspent Transaction Outputs are the new records in a ledger indicating ownerships of amounts which can be used an inputs for a new transaction.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   Consensus would not be achieved and a record of the transaction would not be added to the blockchain as the UTXO is not adequate to cover the transaction.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   The transaction fee is equal to the input less the output

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   This can be achieved by splitting the transactions into multiple inputs and outputs. Furthermore, it is very difficult to determine a private key from a public key as transactions are hashed and encrypted.

[Alko89]

@Arie

No transaction

@Joeyj

Consensus would not be achieved and a record of the transaction would not be added to the blockchain as the UTXO is not adequate to cover the transaction.

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