Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#4185
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are the inputs that are used for a new transaction. UTXOs are like the sum of the money you have in your wallet. Depending on the amount you can create a new transaction.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    No transaction.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It includes in its calculations the amount of fees of the previous transactions.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    By using different wallets / addresses to receive the output back.
1 Like
#4186
  1. UTXO is like an IOU paper that shows how much money you have not spent yet
  2. If you do not have a single UTXO to cover the transaction, then you may need to use several UTXOs large enough to cover the transaction or no be able to do it at all.
  3. The bitcoin wallet specifies the transaction fee by checking the market price for recent transactions and giving one approximately the same amount.
  4. the inputs and outputs makes it unclear where money is going. It can be going to a recipient or change could be coming back to you.
1 Like
#4187

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

1 Like
#4188

  1. Unspent Transaction Outputs are data that is stored on the blockchain regarding verified input transactions. The owner of a bitcoin wallet can access the blockchain and see the value of any UTXOs that have been successfully sent to that specific wallet address as input and have not yet been used in any verified output transactions.

  2. If I don’t have a single UTXO that is large enough to cover a transaction, I need to include more UTXOs that combine to meet the requirements for verification. Any ‘change’ can be sent back to my own wallet.

  3. The bitcoin wallet proposes a fee based on the current fees being used on the blockchain to verify transactions. This should enable your transaction to be verified at a rate relative to current rates of verification.

  4. The only information that is visible on the blockchain regarding the sender and receiver of bitcoin is a wallet address, a public key. It is not possible to to determine the identity of the owner of the wallet from the public bitcoin address on the blockchain. As a result you could say that the privacy of the identity of the sender and receiver has remained secure.

1 Like
#4189

  1. The transactions you have received as input and unspent.

  2. Transaction would not be accepted as there are not enough funds to proceed.

  3. By calculating input minus output and then it gives you the fee, it can also generate a proposing fee if it thinks that it would go quicker to the blockchain.

  4. By generating new addresses.

1 Like
#4190
  1. If Alice sent 0.2BTC to Bob, the transaction of 0.2BTC is UTXO of Bob. Unspent Transactions are ouput of Transaction which are locked to sepcific user(Bob in this case) in blockchain network and it was not spent by user. All UTXOs of a user can be scattered in numerous blocks, and wallet needs to scan entire blockchain to get all UTXOs and sums up to give your BTC amount.Also, an UTXO is indivisible just like a coin which can’t be cut into smaller pieces.There are no accounts/balances in bitocin only UTXOs scattered in blockchian.
    2.If there is no single UTXO which is equal to transaction input, it sums up the UTXOs until the aggegate is greater than or equal to the Input. If sum of all UTXOs is less than your transaction amount then this transaction gets discarded as you don’t have enough BTCs.
    3.A bitcoin would specify transaction fee by specifying the transaction for yourself. Then bitcoin wallet gets transaction fee by (sum of transaction inputs) - (sum of transaction outputs).
    4.Transactions consume UTXO by unlocking it with the signature of current owner and creates the UTXO by locking it to the bitcoin address of receiver. Along with locking , as transaction inputs and outputs hides the information on data/user it is secure.
1 Like
#4191
  1. Your wallet balance
    2.The transaction is void
    3.Input - Output
  2. You could increase the security by using a hardware wallet for input of funds so your private key is never online and only used to sign the transactions.
1 Like
#4192

1.UTXOs are unspent outputs of previous transaction
2. would use more UTXO, if combined value is lower than what you try to send Tx is rejeted
3. input-output=Tx fee
4. change btc address for receiving funds

1 Like
#4193

  1. A UTXO is the amount of bitcoins remaining after a transaction is executed. When the transaction is executed, all unspent outputs are added back into a database as inputs. The output becomes an input and can be used at a later date for a new transaction.

  2. The transaction will be declined.

  3. Often the wallet would recommend a fee automatically, it would calculate the appropriate fee for the transaction to go through.

Inputs = outputs + transaction fee.

  1. Don’t reuse same addresses. Use different output wallets. Make it difficult for anyone to track.
1 Like
#4194

1.utxo’s are the money sent to you that your wallet can track and summarize via your private key
2. the transaction will not go through
3. it checks recent blockchain mining fees and proposes a fee that is thinks will be enough to get the miners to accept the transaction in a relatively timely manner (some wallets allow you to change this manually)
$. send your “change” to a different wallet every time you transact that is anonymous new and has never been used before

1 Like
#4195

Homework - UTXOs
Bitcoin Basics
1)Describe what Unspent Transaction Outputs (UTXO) are.
• UTXOs are created when someone sends your wallet an input of funds, for example BTC. Your wallet then holds the funds until you decide to spend it and then send them as an output to another recipient(s).

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 all of your UTXOs to cover the transaction you are trying to accomplish. If you do not have enough, your transaction will be declined.

3)How would a bitcoin wallet specify the transaction fee when creating a transaction?
• Your bitcoin wallet will look at previous transactions through the blockchain that are roughly the same amount you are attempting to send and use the fee that is best suited for such transaction based on the previous fees.

4)How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
• The transactions will be sent through different keys. The keys themselves are what makes the transactions anonymous.

1 Like
#4196

  1. UTXO are outputs that are connected to a wallets private key that they can send in future transactions.

  2. The wallet would query nearby nodes to see what UTXO remaining the private key had access to. If none, then the transaction fails. If there are other UTXO, then it sends enough to cover the desired output plus the change goes back to the sender in an address they control.

  3. The wallet looks at past fees and estimates the fees that would be a reasonable price per speed.

  4. The combination of inputs and outputs are almost limitless so almost impossible to figure out which address belongs to who.

1 Like
#4197
  1. A UTXO can be used as input for a new transaction. It’s the amount that’s left remaining.
    Similar to buying something and getting change back, the change is your UTXO that can be used for a new transaction.
  2. The wallet would use a second, third, … UTXO until the amount is enough. If the amount is greater then required, the difference is sent back to you as a new UTXO.
  3. The transaction fee is the input minus the output. The wallet calculates an appropriate fee based on network conditions (supply and demand) and transaction size. Some wallets let you decide on fees, lower fees will take more time to process since miners will prioritize higher fees.
  4. You can create multiple adresses for yourself and send the remainder of the transaction to another of your adresses, thus creating more privacy.
1 Like
#4198

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are the transactions coming into the particular wallet and are ready to be spent.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    The wallet will calculate all the previous UTXOs together, sum them up and will create the transaction. The difference between the new transaction amount and the UTXOs sum will have to be sent back to you as a change.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The wallet will calculate the difference between the transaction input minus output, will check up the history of the similar transaction fees in the blockchain and will recommend the best fee.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    To increase privacy you should use a new Bitcoin address for every new payment that you make or receive. Also, you can use multiple wallets for different purposes.

1 Like
#4199

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

#4200
  1. Describe what Unspent Transaction Outputs (UTXO) are.

Records of outputs proving you were given BTC as outputs of past transactions.

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

Your wallet will combine multiple UTXOs to construct a transaction with enough BTC to cover the amount desired to be sent including fees.

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

Simply the gap between the total sum of output amount and the output amounts sent to the various addresses. The difference is the total amount of fees paid.

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

Unknown to whom the amounts are sent and could be a third party or could also be a separate address owned by the sender.

1 Like
#4201

  1. UTXO’s are what the bitcoin network uses to track the amount spendable in each wallet. Each UXTO is an input from another wallet or newly generated coins from mining.

  2. If you don’t have any single UTXO large enough to cover your transaction, you can use the sum of all UXTO’s that have been sent to your wallet.

  3. A bitcoin wallet specifies the transaction fee by subtracting the output amount from the input amount.

  4. You can send UTXO’s to another wallet that is your own. There is no way to tell on a public ledger if the wallet you are outputting to is yours, another person’s, or both.

1 Like
#4202
  1. The amount of bitcoin inputted and is unspent.
  2. Transaction will be rejected
  3. By querying the blockchain to check a good transcation fee
  4. Multiples addresses belonging to the same owner, which can be used as an output.
#4203

  1. UTXOs are unspent outputs from the previous input which you can spend on your next input.

  2. It will use the sum of all other smaller UTXOs and change given back to your self. However if the total sum is not enough, the transaction won’t be created or it can’t happen because its invalid.

  3. The fee is input minus output.

  4. Using different addresses.

1 Like
#4204

  1. When a transaction is executed, the blockchain will eventually update with entries specifying where/by whom certain funds can be spent. These entries that are sitting on the blockchain will be added up by the user’s wallet when the user wants to view the wallet’s “balance”.

  2. Then you won’t be able to execute the transaction

  3. It would take the difference between the input UTXOs and the outputs.

  4. You could use an alternate wallet you control as an output for a transaction.

1 Like