Homework on Bitcoin Transactions and UTXO - Questions

[Leopold]

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

-total of UTXO is the wallet balance.

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

transaction would not be completed and denied by the network.

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

INPUT= OUTPUTS + TX FEES & UTXO - UTXO INPUT=FEE
-Through the difference between your outputs and the input in your wallet

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

-Use a new address each transaction
-Have multiple wallets

[KyleO]

1. UTXO’s are the positive balance of the wallet

2. There is always a way you can combine multiple UTXO’s if the sum of them will be greater than the transaction needs

3. value of all input = value of output + fee

4. You can create multiple outputs so its difficult to show which is yours

[Aleksander]

1. Unspent Transactions Outputs are total Inputs (“income”) coming to Ur wallet. They are strings of code sent to U previously and not spent yet in other transaction.

2. Ur wallet will sum up smaller UTXOs and send it as 1 large amount (Output).
   or if question assumes there are no UTXO at all then wallet will not let go transaction or miner will not confirm it.

3. Fee = Total Inputs- Total Outputs of a specific Transaction. It is generated in a wallet, according to previous fees and considered with time to accomplish. Some wallets let a user to choose the fee.

4. U can hide number of reciepents in multiple outputs.
   U can sent value to smb and to Ur self in 1 transaction.
   U can add many UTXOs and send it to Ur self so to have 1 Output for next transaction
   (Does THAT make a sense?)

Plus, I have a question,
how do we know then, that there are big purchases by “the wales”, if codes are various and anonymous?

[IanC]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   These are outputs from a transaction that have not been used

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   Other UTXOs you have will be grouped together to cover the transaction, and the remaining amount is sent back to you as aa UTXO.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   Inputs = outputs + TX fees

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   You could mix your UTXOs with other users UTXOs and send them to the desired recipients, and this will obscure the linkage between the inputs and outputs of individual transactions.

[shah1]

1)UTXO are balances in one’s wallet which are unspent
2)We will take sum of all utxo and if that also is not sufficient then the transaction will be invalid
3) Transaction fees =Inputs-outputs
Wallet will specify best fees and we can also select it manually
4)By using many address

[Lauro_Cosby]

1. UTXOS is the balance in your wallet.

2. No transaction would take place

3. Inputs = outputs + Transaction fees

4. You can track all utxos so generate more output addresses

[Alko89]

@Aleksander

U can add many UTXOs and send it to Ur self so to have 1 Output for next transaction

You could just send two outputs, one to pay for the service and one back to yourself. Why would you spend money on fees just to combine UTXOs into one large one?

@Aleksander

how do we know then, that there are big purchases by “the wales”, if codes are various and anonymous?

Its not anonymous if the address is known. Most exchanges have the address public so one can check if there were large sums deposited on them.

[Alko89]

@Leopold

transaction would not be completed and denied by the network.

@Lauro_Cosby

No transaction would take place

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

[Bhujanga]

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

UTXOs are transactions that have been received at an earlier timestamp. They are now available as input for new outgoing transaction.

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

The transaction will not be validated and dismissed.

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

Fee = Input - Output.

If 2 Bitcoins go into a transaction, let’s say to two wallets, Wallet A and Wallet B, 1 BTC may go to Wallet A and 0.99 BTC will go to Wallet B. The fee therefore will be 0.01 BTC for that transaction.

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

If you send you UTXOs to f.e. 3 different addresses, two of these addresses can again be owned and controlled by yourself. It is even possible to spread UTXOs from own of your wallets to many other wallet that you control. No one will be able to tell which wallet is yours, unless they have your private key(s).

[r0bz078]

1. Describe what Unspent Transaction Outputs (UTXO) are. Funds that you have received in your wallet that you haven’t spend yet.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? Multiple UTXO will be use to cover for that transaction.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction? The wallet communicate to blockchain to figure out the transaction fee. The difference of input and output.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? Use multiple addresses.

[schleichschelm]

1. UTXO refers to the transaction output(s) received by a wallet address that have not been spent on new transactions. The sum of UTXO for a specific wallet is equivalent to the balance of that wallet.

2. Your transaction would be rejected by the network due to insufficient funds.

3. The transaction fee is calculated by subtracting output from input, i.e., they are not specified but implied. Transaction fees are typically not set by the user but proposed by the wallet based on recent completed transactions on the blockchain to ensure that the transaction is processed in a reasonably speedy manner.

4. Privacy can be increased by using multiple outputs and thereby obfuscating which amounts are sent to third parties and which go back to you.

[Alko89]

@Bhujanga

The transaction will not be validated and dismissed.

@r0bz078

Transaction could not be processed.

@schleichschelm

Your transaction would be rejected by the network due to insufficient funds.

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

[leppflops]

1. UTXOs are essentially the sum of available funds in each wallet, i.e. the sum of the inputs (received funds) for that wallet.

2. Multiple UTXOs whose sum adds up to the transaction amount would be spent and the remainder (minus fee) would be sent back to yourself.

3. The wallet checks the latest transaction fees on the blockchain and gives you a fee that would get your transaction into a block fast enough - or you can manually choose a fee and potentially have to wait longer.

4. If you increase the number of outputs the transactions become harder to track so you could potentially divide transactions into chunks and send the amount due to multiple addresses which belong to the same entity.

[ajuliab]

1. Unspent Transaction Outputs are the outputs of previous transactions that are not yet spent.

2. The transaction would proceed if the sum of all UTXOs is larger than the cost of the transaction, otherwise it won’t go through.

3. The wallet automatically calculates the balance, and when it creates a transaction it calculates the inputs minus the outputs to specify the transaction fee.

4. A transaction can have multiple recipients, which enables users to create multiple transactions and send parts or all the UTXOs to an address they personally are in control of. This increases privacy in a transaction.

[Nettie]

Unspent Transaction Outputs are transactions that have not transferred to an output.

If I didn’t have any single UTXO that is large enough to cover my transaction, my wallet would search for another or if there are not enough funds the transaction would not got through.

A Bitcoin wallet specifies transaction fees by calculating the difference between amount sent minus the amount received.

The notion of transaction inputs and outputs increase privacy due to the ability to send and receive from multiple addresses.

[stevesirag]

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

UTXO’s are transactions that have your address as a destination, provided you haven’t spent them yet. The wallet adds up your UTXO’s and prints out the numbers and units as a balance.

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

Your wallet will combine UTXO’s to meet the demaind and then route the difference back to your wallet as another UTXO.

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

It will select a fee similar to immediately preceeding fees on the blockchain.

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

The outputs contain the destination addresses for the transaction, but it doesn’t say who owns them–so it could be that the same person controls the input addresses and output addresses.

[LuchoXIV]

1. The blockchain keeps track of the amounts held in each wallet by tallying up the outputs that have been sent to each unique address. These outputs become inputs, and will remain unspent until the wallet’s owner decides to spend them (create their own output). The sum of all UTXOs in a specific wallet IS that wallet’s balance .

2. The blockchain requires that enough UTXOs be spent to cover the size of the transaction, including the fee, and the remainder, if any, is sent to an address within the sender’s control. If the sender does not have enough UTXOs to cover the size of a transaction then that transaction is denied by the blockchain.

3. The wallet will either recommend a reasonable fee based on previous performance, or allow the user to choose their own fee. Generally speaking, the higher the fee, the quicker the transaction is processed.

4. A single transaction can have multiple inputs from different addresses and multiple outputs from different addresses. From the outside it is impossible to tell which addresses belong to which wallet. And it is also impossible to know, specifically, which part of the input became which part of the output.

[Ryan_Jackson]

1. Unspent transaction outputs (UTXO) are transaction outputs that have been sent out to another address but has not been sent out again (spent).

2. If you don’t have any single UTXO that is large enough to cover your transaction the wallet would group enough inputs together to cover the transactions and if it was to big it would output you some back to your public key.

3. The fee is the difference between input and output. eg. input-output=fee Some wallets you can pick your inputs for the best fee and speed. Some wallets will select the best inputs for the best fee to get transacted quickly.

4. The notion of transaction inputs and outputs can increase privacy in your transaction by selecting multiple inputs or bigger than needed for the transaction, then outputting some back to yourself. This would make it harder to track due to more outputs and possibly more inputs.

[Jozef]

1.UTXOs are not spent inputs of transaction, it means sum of UTXOs makes the balance of your wallet. Blockchain has only single UTXOs without summary, sum makes your wallet.
2. If you don´t have any single UTXO that is large enough to cover your transaction, your transaction will be not accepted, confirmed by miners.
3. Wallet will specify your transaction fee by creating transction from previous transaction on blockchain and give yuse best option to fast process. In some wallets you can chose and fasten up transaction by paying higher fee. Miners take first the transations with higher fees.
4. Anonymity and privacy is nature of transaction because you don´t know who uses the addresses. You don´t know if output is not going to the same wallet as input.

[Alko89]

@Jozef

If you don´t have any single UTXO that is large enough to cover your transaction, your transaction will be not accepted, confirmed by miners.

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