Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#4445

1.) UTXOs are the transactions which arrived into your wallet and you haven’t spent yet.
2.) You can combine multiple of your UTXOs to be able to cover your transaction, in which case you send the required amount to the recipient’s address and the “change” back to yourself. (And a smaller amount to TX fee)
3.) Most wallets usually calculate the fees based on other transactions happening at around the same time, so your TX will arrive in “average” time.
4.) You could send a TX to and from multiple addresses at the same time, making it harder to deduct which amount was sent from who and to whom.

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#4446
  1. Input received as an output from another source (e.g. mom sends my wallet BTC).
  2. If available, the wallet will use the sum of all available UTXOs, otherwise the transaction will be rendered invalid.
  3. By interpreting a blockchain to confirm an average fee that ensures it receives miner attention (input - output)
  4. Increasing the number of outputs that could potentially all be owned by the same person submitting the transaction also breakdowns any potential degree of association.
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#4447

Your wallet will calculate the sum of your total unspent transactions to equal the amount needed, if not enough the transaction is not allowed to take place.

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#4448

  1. UTXOs are unspent outputs of previous transactions. The sum of the UTXOs that can be spent using your private key is the balance of your bitcoin wallet.

  2. The wallet program would combine multiple smaller UTXOs until the sum is sufficient to cover the transaction. If the total sum is still less than the transaction amount, then you cannot do this transaction because your funds are insufficient.

  3. The wallet can look up recent fees in similar situations and estimate a reasonable fee. The actual fee charged is simply the difference between the inputs and outputs.

  4. Use a wallet that employs multiple bitcoin addresses. Outputs sent to yourself are thereby hard to distinguish from outputs sent to others.

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#4449

  1. UTXO are all the transactions (inputs) received (no balance available) and ready to spend (outputs) when asked by our wallet.

  2. Nothing can happens as long as you have no money on Blockchain.

  3. By taking all the bitcoin unclaimed (inputs) minus outputs + fee.

  4. Pretty secure already, but you can have multiple addresses in order to make harder to find.

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#4450

Describe what Unspent Transaction Outputs (UTXO) are.
UTXO is unspent output from the previous transaction.

What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
Then the transaction will be declined.

How would a bitcoin wallet specify the transaction fee when creating a transaction?
The cost of a transaction is the difference between the input and output. It would be specified before completing the transaction in your wallet or you can check in the blockchain explorer.

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You could arrange several outputs where 1 out of 5 outputs are going to some other wallet you own without them knowing that it is yours.

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#4451
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO’s are inputs received from other users that have not been converted into an output from you.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? The wallet will combine UTXO’s until enough to cover the transaction is made. Multiple outputs will then be created, one for the transaction, one for the fee, and one to return remaining amount back to the originator.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The wallet takes the total inputs and subtracts the total outputs to determine the fee
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? The information presented on a block transaction does not specify which output is being used for the actual transaction or which output is being returned to the original sender.
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#4452

Homework - UTXOs
Bitcoin Basics

Describe what Unspent Transaction Outputs (UTXO) are.

UTXO are the available transactions in the users wallet that the user has available to send. The wallet finds the balance by adding up the UTXO

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

The user’s wallet will use another UTXO to cover the transaction and would send the difference back to the user. an example would be user A, sending two transactions of 0.5btc and 0.3btc to cover a transaction of 0.6btc of user B, then The remaining 0.2btc would be sent back to user A, minus the fee.

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

The wallet will base the fee according to the previous fee’s to get the user on the blockchain fast enough.

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

The wallet sends the UTXO though the private key using hash functions, for example if the user A is sending a transaction back to himself then the blockchain will store the input as one hash function and
the output with a different hash function.

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#4453
  1. UTXO are input to your wallet or balance available for spending.
  2. If you have several UTXO it will sum it all and if it still can’t cover your transaction, your transaction will be invalid.
  3. It checks the previous fess from blockchain and recommend the fee for your transaction.
  4. You will not have a running balance recorded in the blockchain, you will only have inputs/UTXOs that only you can spend with your private key. And when you spend it, the output will not reveal how much of it is sent back you your own account.
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#4454
  1. Transactions that are not yet spent.
  2. The transaction would be disallowed.
  3. Output - input = fee.
  4. use a diff address for each transaction
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#4455

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:

#4456
  1. UTXO is ,what is left in your wallet after the transaction is completed
  2. If you don have enough balance in the wallet, the transaction will not go trough
  3. The transaction fee is calculated from the inputs-outputs
  4. Use a different address when you receive a transaction
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#4457

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO´s are the amount of digital currency remaining after a cryptocurrency transaction is executed.

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

The transaction will be declined.

  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Is calculated by the difference between input - output

  2. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Generating multiple addresses, since they are not linked to any identity, there is no way to know from the outside

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#4458

  1. UTXOs are outputs for transactions submitted by others to your address and not used to initiate a transaction; the wallet calculates the UTXOs to know the available funds in your wallet.

  2. Transaction can’t be processed if the UTXOs doesn’t equal = output + fees

  3. Fees determine how fast your transaction is written to blockchain block; in some cases and not used to initiate a transaction, the wallet determines the fees, and in other cases, the user is given a choice of choosing the fee amount.

  4. In the blockchain, transactions are displayed as input and output addresses, and without a private key, no one can know who owns what or where funds are being transferred from. So your privacy is protected.

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#4459
  1. UTXOs are essentially funds that are sent to a wallet that are yet to be sent (or used an in input) for another transaction.
  2. If you don’t have one single UTXO large enough to complete a transaction, your wallet will calculate the sum of UTXOs in your wallet. If you don’t have enough total, the transaction will not go through.
  3. A bitcoin wallet would specify the transaction fee as being the difference between the input and output totals. Generally selected by the blockchain, but some wallets allow you to choose the fee.
  4. Since the blockchain works like a one way street and only displays alphanumeric addresses, there is no way to reverse engineer the identity of the person using the wallet.
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#4460

Question: Inherently, all UTXOs must be spend in the next transaction, and if the next transaction is of lesser amount than the sum of all UTXOs, then rest is returned/assigned to the wallet address as another UTXO.
Is this scenario different from the example shown from the block chain explorer, where it calculated the estimate of net btc transfered by guessing the controller of the addresses? how block chain explorer manages to do that? or if the scenario is same, how does it work?, the explanation of UTXO going back to the same address is clear, but how can it go to a different address?

Please some one atleast clarify whether its different or the same scenario.
Thanks

#4461
  1. Unspent Transaction Outputs (UTXO) are inputs to a wallet (summed by the wallet) which are available to be spent in one of more subsequent transactions.
  2. The sum of the UTXO within the wallet will be used to cover the transaction plus fees. Any additional value will be returned to the wallet. Transaction input must match transaction output.
  3. A bitcoin wallet will check the network for previous fees on the blockchain in order to determine the transaction fee.
  4. Transaction inputs and outputs must match. Addresses are displayed on the blockchain ledger, not personally identifiable information of the wallet owner. These features increase the privacy of the transaction.
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#4462

Describe what Unspent Transaction Outputs (UTXO) are.

entries in the blockchain which specify that you have outputs from previous transactions
that you are able to spend or use in inputs for your own transactions

What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
You would combine a number of UTXO to cover the transaction or your transaction would be invalid

How would a bitcoin wallet specify the transaction fee when creating a transaction?
The bitcoin wallet creates the fee based on an average of the latest fees in the blockchain which it believes will get your transaction recorded on the blockchain in relative time period, and is the difference between the inputs and outputs

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
you could create multiple destination wallets within a transaction, some of which may be owned by you, which would make it difficult on the blockchain to see what exactly went where and to whom for what

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#4463

1: UTXO’s are outputs from previous transactions that can be then used as inputs for future transactions. They are stored in the blockchain until the wallet that has received them needs them as inputs for future transactions.
2: Your wallet will then use multiple UTXO’s as the inputs for your transaction.
3: It will look at previous transactions and the fees that were charged to those transactions to provide an estimated fee for your newly created transaction. Inputs = Outputs + transaction fee.
4: You can add multiple outputs to your transaction, some of which can be addresses to other wallets owned by you or the other party.

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#4464

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    The total of inputs to a wallet address that have not been spent - or your wallet 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 total all UTXOs in order to create an output that is large enough. If the sum of multiple UTXOs does not equal or exceed the output, the transaction will be invalid.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It will search the blockchain for the most recent transaction fees and recommend an amount that will get the transaction processed quick enough. You can determine the fee amount by taking the difference between the inputs and outputs of a transaction.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You could send the excess amount needed for your transaction to another wallet address that you control.

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