Homework on Bitcoin Transactions and UTXO - Questions

[cryptochef]

@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. UTXO are received transactions that are stored in the wallet, ready to be spent.
2. it would add up other UTXO in the wallet to reach the amount required.
3. The transaction fee is specified by the amount of the input minus the output.
4. It is possible to use new BTC address for each time a payment is received. Also different wallets could be used to increase security, isolating each transaction in a way that impossible to put them all together.

[JAM999]

1. UTXOS are inputs that have not been spent yet.
   2)your wallet will add up the sum of UTXOs and if you have enough it will execute if not it would reject transaction.
2. based on a reasonable fee from previous fees on the blockchain at that time
3. creating different addresses

[Alko89]

@DearPhumi

2.The transaction would be declined.

@Connor

Transaction would fail. The input for any transaction must be equal the output.

@Castor

If you dont have a single UTXO that is large enough to cover for your transaction the transaction will be cancelled.

@LenoraEl

The transaction would be unconfirmed by the blockchain and rejected.

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

[sheila.osman]

1. Describe what Unspent Transaction Outputs (UTXO) are. - received transactions that inform about the available balance(inputs).
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? - transaction will not be confirmed by the nodes/blockchain due to insufficient funds.
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? - through a hardware wallet.

[mhamour]

Thanks for the clarification

[Cryptek]

• Describe what Unspent Transaction Outputs (UTXO) are.
  -> On the Bitcoin blockchain you do not have coin but you have UTXO. you have a flow of Bitcoin from somebody to you.

• What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  -> you can use several UTXO to cover the transaction

• How would a bitcoin wallet specify the transaction fee when creating a transaction?
  -> SUM(Input UTXOs) - SUM(Output UTXOs) = Fees

• How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  -> Nobody knows who is behind an address / wallet and you can even push your own UTXO to another address / wallet

[Zukies]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   The sum of all UTXO your private key can verify is the amount of coins you control
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   your wallet can combine multiple UTXOs to create a sum large enough to do so
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   The difference between the sum of inputs and outputs is the fee
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   you can use other addresses you control as outputs and it is not clear who controls what addresses i

[chunt52]

1. the wallet balance
   2.the transaction can’t proceed
   3.the fee is the difference between the balance of inputs and outputs
   4.you could use multiple outputs to make it more difficult to track

[mchoeti]

1. Describe what Unspent Transaction Outputs (UTXO) are.
In a fiat world scenario an UTXO is a coin which is in your pocket. In a Blockchain scenario it is the end of a transaction or better it is the output of a transaction.
In both cases (FIAT and Blockchain) you have not spent those funds.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
It will be declined, in other words it will not be processed.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
Real formula should be INPUT = Output + TXFee. You will never specify the fee because it is calculated
The fee will be calculated via using the shortest and efficient route because miners are always taking the transaction with the highest fee. Because the fee is the profit of the miners.
How does this work? Well your wallet check the previous fees and calculate the best fitting one to make sure that your transaction find it`s way in time to the receiver.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
First of all it is not possible to know who is standing behind some addresses. Which means you can use two or more wallets but both can be your property. One way to increase your privacy is to send remaining funds to another wallet in your property. Yes you can see every transaction on the Blockchain. But the Blockchain is 100% GDPR conform

[Murisoja]

1. UTXO is the balance in your wallet

2. Transaction will not happend

3. Wallet can ask you how much you want to spend for transaction fee depending on how fast the transaction will be, or depending on wallet it could also decide how much to spend by him self.

4. you can use several adresses to receiving transactions

[LenoraEl]

Thanks so much for that clarification That helps tremendously!

[Maki]

4. By using different address in the same wallet.

[Phillipe089]

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

Answer: it is a transaction that somebody recievs but not spend at the moment

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

Answer: the transaction is canceld

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

Answer: it depends on how high supply and demand is at the time of the transaction. the wallet chooses a fee that is reasonable, which then the miner receives

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

Answer: you can use as many output adresses you like

[Alko89]

@sheila.osman

transaction will not be confirmed by the nodes/blockchain due to insufficient funds.

@chunt52

2.the transaction can’t proceed

@mchoeti

It will be declined, in other words it will not be processed.

@Murisoja

Transaction will not happend

@Phillipe089

Answer: the transaction is canceld

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

[Sofia_Feely]

• Describe what Unspent Transaction Outputs (UTXO) are.
  Are the balance left in your wallet

• What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  the transaction would be decline or invalid.

• How would a bitcoin wallet specify the transaction fee when creating a transaction?
  The difference between inputs and outputs when they subtract and get the total fee amount.

• How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  use a different addresses for every receiving transaction(never use the same twice)

[Earnst]

1. Unspent Transaction Outputs are the inputs which have not yet been reallocated. In a sense, they are payments pending which you have an entitlement to spend / redirect.

2. The transaction would not execute. The UTXO must be at least the input + output + TX fee. Unless you had multiple UTXOs which would cover the transaction, in which case, the entirety of those UTXOs would be used to cover the TX + fee, with the difference being redirected to a wallet you controlled.

3. It doesn’t. But it can be derived by calculating the difference between the input and output.

4. You could use multiple input and out addresses in your transaction (?)

[ranieldolendo]

1. Describe what Unspent Transaction Outputs (UTXO) are
   UTXO is basically the balance of the wallet.

2. What would happen if you don’t have any single UTXO that is large enough to cover your transaction?
   If you don’t have large enough you will have to grab two or more UTXO that would be large enough and pay for the amount, then give yourself the remaining back plus pay for the TX fees.

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

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

[Soza-7]

1. Its basically the out put from the previous trans. and now its the input of a new transaction.
   2.Your transaction would be cancelled.
   3.subtract the input vs the output.
   4.you could potentially send yourself back BTC to another dress same wallet.

[TheBboyWannaBeDj]

1. UTXOs are the Ouputs you have available from a previous transaction. And these Outputs will become Inputs once you start a new transaction.

2. Your wallet will add up the UTXOs you have available and show you your balance. Then you’ll see if the transaction can be validated or not.

3. The transactions fees are never specified, but at the end it will be the difference between your Inputs and Outputs.

4. It’s a one way function. The transaction can have multiple Inputs for different Outputs, and from the outside you can’t tell which Input corresponds to a specific Output.

[Maki]

UTXO is as the name implies they are unspent coins that your wallet track, and you can use in sum for future spending.