Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#4325

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

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#4326

  1. UTXOs as said in the name (Unspend Transaction Outputs) are the inputs a wallet received that then it hasn’t spent, basically the sum of UTXOs will show your balance.

  2. Then more than one UTXO will be send to the address specified crating a total amount that can cover the amount requested (which will be sent to the specified address) and the rest of the amount (the change) will be sent back to you own wallet.

  3. Bitocin Tx Fees are implied in the Tx, for calculating themyou should substract the output to the input (Tx Fee= Input - Output)

  4. Using different addresses and many inputs and outputs.

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#4327

UTXO is a input transaction you have received and that has not been spent yet.

Transaction would be declined then.

Wallet recommends a fee based on previous transaction fees. Fee equals input minus output

Use different addresses

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#4328
  1. UTXO’s is the balance in you’r wallet that you did’nt spend yet.
  2. the transaction will not be executed.
  3. input - output = fee
  4. uese different addresses.
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#4329

  1. UTXOs are funds that are available to be used. Wallet is checking which UTXOs are available to be used with its private keys and those that are can be used as inputs for another transactions.

  2. You can use multiple UTXOs to cover a transaction and send a “change” back to yourself which is going to be your new UTXO that you can use later

  3. Fee = Inputs - Outputs. Wallet will look at the blockchain and see previous fees and choose a fee that will execute transaction in reasonable amount of time.

  4. You can use the fact that there is no way to know by looking at the blockchain which output was a send to someone else and which output was send back to address controlled by you

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#4330
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • Unspent Transaction Outputs are the amount of your balance in your wallet.
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • Basically, you will not able to make this transaction, because it is going to be declined.
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • Let’s say you are doing a transaction through your wallet, the fee is going to be calculated by the wallet while using the blockchain information for confirmation so you can see approximately and decide how much it is going to cost you.
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • If whatever you want to buy cost 0.5 BTC and in your UTXOs you have 1.0 BTC
    you spent this 1.0 BTC for your transaction and then you have 0.5 left back again to you which is the change with the fee maybe it is going to be a little bit less than 0.5 but somewhere there so you can do it when you create another output address that you are going to sent back to you. Like this, you are creating a different address and you are increasing your privcacy. So you end up with 0.5 UTXOs in you wallet again.
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#4331
  1. UTXO’s are transactions that have yet to be spent or deposited by your wallet.
  2. A major function of the wallet is to sum up UTXO’s into a balance that is used in the transaction and dispersed accordingly to different outputs.
  3. A Bitcoin wallet observes the market for current trends in fees and picks the best one that would get approved into the block the quickest.
  4. It’s near impossible from the outside to track inputs to outputs as many outputs can result from a single input.
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#4332

  1. Transactions that a person receive and can then spend. These transactions are tracked on blockchain. The wallet adds up the UTXOs to calculate the total available balance in determining whether the next requested transaction can be executed.

  2. The transaction request will not be executed.

  3. It is the difference between the total input and the total output.

  4. Because the tracking is being done at the individual transactional level, and each transaction involves the sum of multiple UTXOs, it is not easy to find out the identity of the persons in the executed transaction

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#4333

1 Describe what Unspent Transaction Outputs (UTXO) are.
Transactions you have received but haven’t sent forward.

2 What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
Another UTXOs would be needed. Otherwise the transactions would get declined.

3 How would a bitcoin wallet specify the transaction fee when creating a transaction?
The fee is equals inputs minus output.

4 How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
A person can own and create several addresses which will increase privacy.

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#4334
  1. Describe what Unspent Transaction Outputs (UTXO) are.

Each unspent transaction output is considered an Unspent Transaction Output (UTXO) until an input consumes it. A UTXO is an unspent transaction output that can be spent as an input to a new transaction.

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

Other UTXO’s within your wallet will be added together so you have enough to complete the transaction (including fees), should there not be a sufficient amount with the wallet the transaction will be declined.

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

A fee is the amount that a sender is willing to pay to have a transaction included in a block. The higher the fee, the greater the priority to be included on the chain immediately. The wallet recommends a fee based on current and previous transactions within the network and recommends a fee based on this, however within some wallets it can be changed to process the transaction more quickly.

This can be obtained from the input cost minus the output cost.

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

A transaction input can send a bitcoin payment via one address within the wallet, however when a transaction is completed, anything that is unspent within the transaction can come back to a different bitcoin address that you control (usually within the wallet). It makes it harder to track your transactions from specific addresses over time, therefore allowing for more privacy.

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#4335

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

They are Bitcoins that have not been spent and are available for a user to use.

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

All your UTXO’s are added up and then you are available to send the TX spending the amount you desire and the change is sent back to you.

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

Most wallets specify the fee automatically based on previous TX and propose a fee that will get your TX into the blockchain fast. In some other wallets the user can specify it.

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

Addresses are not always the same, as you create new TX all the UTXO’s used in that TX need to be spend, so te change will go to another address controlled by the sender. In that case it is not possible to know how many Bitcoins can someone have.

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#4336

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO’s are confirmed transactions on the block chain that are assigned to a public key. They are the unspent outputs from a previous transaction

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? A number of UTXO’s would be combined to complete the transaction. Anything leftover would be sent back as change.
    If you only have one UTXO the transaction would not go ahead.

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

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Use a unique address for all receiving transactions

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#4337

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Unspent Transactions Outputs are how the blockchain determines what available currency you have left in a specific wallet to spend.

  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 a large enough UTXO to cover a transaction the blockchain will sum up multiple UTXO in your wallet to reach the required output, however if the total sum exceeds the output required the balance will be sent back to your wallet making the payment as input must equal output plus TX fees.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The transaction fee is determined in a bitcoin wallet depending on previous and current transaction fees which is calculated using the formula input=output+fees.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Transaction inputs and outputs increase privacy in your transactions by using multiple inputs as UTXO’s to complete new transactions which may also include outputs back to the original wallet of the holder. The use of multiple addresses make it difficult to determine who sent what to who hence increasing the security of your private key.

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#4338
  1. UTXO are transactions that are left unspent :money_with_wings: after someone completes a transaction (similar to the change someone receives after conducting a cash transaction in a store).
  2. The wallet will use a :two:nd or :three:rd … UTXO until the total is equal or higher to the amount you are sending. If there are no UTXOs left the transaction will be declined :x:.
  3. The BTC wallet will specify the transaction fee :euro: while creating the new transaction output minus the input (UTXO’s).
  4. From the outside it is impossible to give any content explanation of the viewed transactions, because the multiple numbers of input - and output addresses :chart_with_upwards_trend: that can be used and the mixing of different UXTO’s :fountain: in creating the output transactions :shopping_cart:.
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#4339

unspent transactions (utxo) are equal to the value you are able to spend in your wallet. (money not spent yet*)
your transaction would fail, unless you have multiple inputs to equal the cost of the full transaction .

the transaction feel will cost the input value minus the output value , most cases its calculated automatically from similar transactions the minors took on > usually higher cuz the minors wanna to make a buck $

to create more privacy threw transactions , i would stake my inputs, and withdrawal threw rewards + the original input to a different private key . simply creating a cluster of transactions and a different original input value + a different original public key

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#4340

you can use multiple addresses for more privacy.

#4341

Thanks,

I should have said - Use a unique address for “each” receiving transaction

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#4342

1-UTXO’s are transactions sent to you that have not been spent yet.
2-The transaction will not be completed
3-The wallet uses the best fee based on previous fees
4-Wallets are private and cannot disclose who/where input or output came from.

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#4343

  1. Describe what Unspent Transaction Outputs (UTXO) are. Person A sends 1 BTC to person B. This is received as an input to Person B’s wallet. Then person B can create an output transaction for 1 BTC with the unspent transaction to make a new transaction.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? If you don’t have a large enough single UTXO, the wallet will add more single UTXOs until it has enough for the input. For example I want to buy a vacation for 0.05 BTC. I have a single UTXO of 0.045 BTC. I have to add another UTXO of 0.005 to complete the purchase.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction? You cannot specify the fee but it is implied. The transaction fee = input minus output. Your wallet tracks UTXOs and constructs inputs and chooses outputs to create and pick the best fee so you can get into the blockchain fast enough. The larger the transaction the greater the fee to get into the block.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? By doing a combination of inputs and outputs you increase privacy instead of one UTXO. We don’t know who controls the addresses and whether they are sending the transaction to someone else or back to themselves.

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#4344

UTXO is the output of previous transactions. It hold the remaining bitcoin from the previous transaction to that public address.
If you only had one utxo on the blockchain and it wasn’t large enough, the transaction would fail. Accordingly, a wallet sums up all uxto’s on the blockchain so if one uxto was not large enough the transaction would utilize multiple uxto;s
A bitcoin wallet suggests the fee based on previous transactions. The fee is then the result of the INPUT minus the OUTPUT.
Use multiple wallets and/ or multiple addresses when receiving and sending.

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