Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#4305

  1. UTXO is your wallet balance, the transactions for recepient to use.

  2. Your wallet would check all UTXO’s and if its large enough make a transaction if not it wouldn’t make it as there is not enough funds.

  3. It would take the rest of transactions if there was any rest of to take( important notice is that if you do not put in the fee your transaction is never gonna be made/added to blockchain since no one has any use of putting your transaction on the block ) and if not it would then take summ of recent received UTXOs and make its fee.

  4. Due to encrytion of the transaction and private keys its hard to tell who is who and who recieved what. You can only see that someone spent this on that etc. Only you can know balsnce you sent your self after making some transaction and its needed to spent all UTXOs so you know what the change/difference will be.

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#4306

  1. collective of the inputs in the wallet

  2. transaction won’t happen

  3. difference between inputs and outputs

  4. the randomness of the wallet address is pretty much the anonymity

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#4307

Describe what Unspent Transaction Outputs (UTXO) are
UTXO are outputs from a set of transactions that can only be unlocked by a specific private key. The UTXO is a transaction output that contains a reference to the bitcoin address (derived from the public key) associated with the private key that can unlock it.
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
The wallet would detect how much UTXO is under the control of the private key and the UTXO can come from multiple transaction outputs.
If you are using a wallet software to construct the transaction the wallet itself would detect that there is not sufficient UTXO under the control of the private key to cover the outputs and would not generate the transaction. However if the transaction is constructed with a command line tool and sent to a node in the network the first node that receives the transaction would automatically discard the transaction and would not broadcast it further if the UTXO input does not cover the outputs.
How would a bitcoin wallet specify the transaction fee when creating a transaction?
The wallet would typically use a third party tool to find a suitable amount for the transaction fee that guarantees the transaction will be included in the next few blocks. This transaction fee is NOT included in the transaction as such. The fee is calculated by the miner when processing the transaction. It is the Sum(Inputs) - Sum(Outputs) and is then added to the coinbase transaction when the block is added to the blockchain.
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You can send the change that flows back to you to be directed to a different bitcoin address every time you sign a transaction. You could theoretically create a new private/public key pair for each transaction. However most hardware wallets create hierarchical type trees of private/public key pairs for you, so you can send the unspent output to a different bitcoin address every time you sign a new transaction

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#4308
  1. Describe what Unspent Transaction Outputs (UTXO) are. The total of the UTXOs represent your balance essentially -->they are the output of previous transactions that you have received and serve as input when you are initiating a transaction. You always need to spend all your UTXOs this is why the transaction includes the amount that you want to send to someone and the amount which is being sent back to you.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? Then your wallet would sum up all your UTXOs and initiate the transaction if the total is enough.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction? It would subtract the output from the input. The difference between input and output is the fee.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? You could use a different address to receive “the change”.
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#4309

  1. UTXO are the transactions that are left unspent after a transaction is completed.

  2. The Transaction would not be excepted by the miners.

  3. A bitcoins wallet’s ideal transaction fee is detremined by the amount of data that makes up a transaction. ex; multiple input and multiple outputs would create a higher fee.

  4. Using multiple input and outputs, would create mutiple transactions to multiple recipients making it hard to say who got what.

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#4310
  1. Describe what Unspent Transaction Outputs (UTXO) are.

Unspent transactions outputs are the inputs for a transaction.

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

Then if your private key has access to another UTXO then it will build a transaction to cover the cost as input.

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

By scanning the blockchain for previous transaction fees.

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

You could sent your self multiple transaction to a different wallets that you control.

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#4311

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Unspent txns are transactions received; but not yet spent - balance.

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

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Depending on the bits needed

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

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#4312
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    The unspent inputs received in wallet.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Your transaction would not be completed.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It automatically computes it - UTXO - output = fee
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Addresses change with every transaction on the blockchain making it hard to ID the owner of the wallet.
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#4313
  1. UTXO’s means Unspent Transaction Outputs which are inputs I haven’t spent yet.
  2. Those transactions would be rejected by the node network
  3. The transaction fee is the input minus the output
  4. by using different addresses
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#4314
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXOs are transactions that have not been spent by you/your wallet yet.

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

If you had multiple UTXOs It would combine them into the one transaction then send you back any extra minus transaction fees. If on the other hand you didn’t have enough UTXOs to cover the transaction your transaction would fail.

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

The transaction fee is the difference between input and outputs on a transaction. Inputs = Outputs +transaction fees. It would show this as a fee on block explorer.

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

By using different wallet addresses you have to receive outputs

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#4315
  1. basically the total amount of UTXO you have in your wallet in total

2 No transaction would be input

3 Sometime it will be the input minus the output or some hosted wallets may give you an option of what fee depending on the blockchain and how fast you want the transaction to go through

4 Have multiple inputs to produce multiple outputs

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#4316

  1. Describe what Unspent Transaction Outputs (UTXO) are. - A database of transactions which also tracks which transactions are unspent

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

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction? It is the input minus the output which gives you the transaction fee

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? - It adds anonymity and privacy as you do not know who is sending the inputs and who is receiving it

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#4317

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. :slight_smile:

#4318
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXO’s are individual transactions that your wallet has received that have not yet been spent. When added together by your wallet they effectively provide your available to spend balance.

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

When making a transaction as described above your wallet will combine more than one UTXO until the output amount has been equalled or bettered. All of these UTXO’s will then be combined and spent in full and any change from thransaction will be returned back to your wallet (minus the transaction fee). The address your change is sent back to differs from the original wallet address hence its isn’t possible, when looking at the blockchain, to confirm with 100% security which was the amount spent and which was the amount returned to sender as change from the transaction.

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

Your Bitcoin wallet will access the blockchain and provide you with a reasonable transaction fee based on current and previous fees which will ensure your transaction is processed in a reasonable amount of time.

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

The notion of transaction inputs and outputs are used to increase privacy as when viewing the blockchain it is impossible to say with 100% security which output or outputs are the amount / amounts of bitcoin being spent and which, if any, is the amount of Bitcoin being returned to the sender as change.

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#4319

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    It is sort of a transaction change, i.e. the amount of digital currency left after a cryptocurrency tx is executed.

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

It would have to be combined with another UTXO and then part of the output would return to sender as a different UTXO.

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

The fee is the difference between the input and the output. Usually the wallet automatically chooses the fee to be paid, but it can be set manually (faster or slower tx). The unit of the fee often used is Satoshi/byte, and the median transaction size is 224 bytes.

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

By generating more inputs and outputs. Not sure if the privacy will be maintained, but the difficulty will be increased.

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#4320

  1. they are the inputs that has been send to your wallet adress that arent spend in a new transaction yet.

  2. then the transaction will fail?

  3. it is the inputs minus the outputs.

  4. ??

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#4321
  1. UTXO is like change from a previous transaction.
  2. The transaction will not be valid and not accepted by the miners
  3. The fee is calculated as - difference between the input and output
    4.Use a different address for each receiving transaction.
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#4322

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    A UTXO is the output from a transaction (e.g. you have received 0.1BTC), or an input to a transaction (e.g. you have sent 0.2BTC). UTXOs are combined by a wallet to create your balance, or miners (e.g. to verify you a high enough balance to send what you want to send).

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    UTXOs are combined to ensure there is sufficient balance to be sent.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Fees are based upon how difficult the transaction is. If you require multiple UTXOs to cover the balance then there is more work required by the miners than if there was a single UTXO with enough value. The fee can be calculated by the wallet based on network congestion and the UTXOs required to complete the transaction.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Inputs and outputs are sent to unnamed addresses – nobody knows who owns the addreses. You can create multiple outputs from a single transaction and route that through multiple transactions e.g. to yourself in another wallet. Have I understood the question correctly?

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#4323

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are basically inputs for which a new transaction has not been created. UTXOs are tracked by blockchain.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Your wallet would query the blockchain on which and how many UTOXs are available. It would then combine them to ensure, there is sufficient balance. If the combined balance of UTXOs would not be sufficient, the transaction would fail.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Your wallet woul check the blockchain for recent fees in the and would use the one, that would confirm the transaction in the fastest possible way (get you into the blockchain asap).

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Privacy is basically assured in every transaction since we don’t know who the owner of the input transaction and we don’t know who the owner of the output transaction is. You can also make a transaction to a different address you own, to increase privacy.

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#4324

  1. UTXO’s are unspent outputs from previous transactions

  2. Transaction will not be accepted until I have enough funds

  3. It will deduct total of outputs from total of inputs, whatever’s left it’s fee

  4. By creating many outputs adresses

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