Homework on Bitcoin Transactions and UTXO - Questions

[rachel]

1. unspent transaction outputs (UXTO) are previous transactions sent to your wallet (private key address)

2. the UXTOs are combined to make up your balance, the output has to match the input, so as long as you have enough balance in total the wallet uses multiple UXTOs, sends the correct amount to desired recipient and the rest back to you

3. the transaction fee is not specified, but the difference between input and output, the amount is worked out subtracting the output from the input.

4. you can use the notion of transaction inputs and outputs to increase privacy by having different addresses (wallets) produced for every new output so returned funds still come back to you via a new address.

[Jekaterina]

UTXO is a unspent transaction output which is a result of a previous transactions output and have not been spent yet. Ones current balance is a sum of UTXO’s.

If there is no single UTXO to cover my transaction, the transaction has to be combined from different UTXOs.

Transaction fee is determined based on previous transactions.

Sending btc to yourself to make it look like it changed hands. But not to make a transaction where there is no change, because that would be obvious (when doing the max transfer of your wallet)

[Samuel1]

1. UTXO are the outputs that are unspent from an input, for example if Curry sends me 0.2 BTC then my UTXO is 0.2BTC.
2. You would get your proverbial “change” back that is an output sent to yourself. It is the same as if you buy something with two $5 bills that is $8.
3. The transaction fee is equal to your input - output.
4. Block explorer will record the transaction, so it is public. However, the input is recorded as a unique address and so is the output. So you can increase privacy by sending BTC to yourself in a multitude of wallets.

[Timschi]

• 1 Utxos, are the inputs i receive from transactions directed towards my wallet. As long as i don´t spend them they remain utxos and make up the balance of my wallet.
• 2 If theres only that one utxo the transaction would fail. If there are more utxos available they would be combined and the “change” would be sent back to me.
• 3 The wallet would ask the blockchain for the amount of previous fees to make sure that my transacion gets put into a block reasonably fast.The fee woud be visible as the difference between input and output.
• 4 I am not sure… isn´t the design of the encrypted adresses the privacy feature? So, i imagine, you could try to create some chaos by creating new adresses and a ton of in- and outputs but since everything is perfectly trackable it would get you nowhere

[Dornfelder]

1. UTXOs are effectively the “balance” of a bitcoin address. An UTXO is is the difference between the amount of bitcoin an address has received, and that which it has sent.

2. UTXOs will be combined. If the sum of all UTXOs does not suffice, the transaction will be rejected by the network.

3. The wallet calculates an appropriate transaction fee based on current network conditions and transaction size.

4. Outputs can be split between multiple addresses, meaning that one can send a transaction which includes recipient bitcoin addresses controlled by the sender. It would not be immediately clear which of the recipients is someone other than the sender, and hence how much bitcoin is actually being “sent”.

[emrahplaysdrums]

-Balance in your wallet from your previous transactions.

-You are going to have to use more UTXO’s to cove the transaction.

-Wallet first calculates between input and output then come up with the fee.

-By using multiple inputs and outputs for your transactions.

[Cero]

1.Describe what Unspent Transaction Outputs (UTXO) are.
Those are unspend transactions output from senders which are waiting on the blockchain to be spent. They represent whole your amount/balance that you have.
2.What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
You will spent more UTXOs to cover more than the size of transaction you are willing to spent. the rest is going to miners and back to you.
If you do not have enough amount/balance, the transaction will be rejected.
3.How would a bitcoin wallet specify the transaction fee when creating a transaction?
Wallet will try to find the appropriate transaction fee in the blockchain according current conditions (current number of transactions, size of transaction etc.). Generally the fee is difference betwen input (UTXOs) and output.
4.How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
With different adress. You create different output adresses for transaction. Although the adress is different you can still send the transaction back to your wallet.

[zookeeper]

1. They are unspent balances from bitcoin transactions and can be used as input balances that a wallet uses to generate and sign transactions. These are different from transactions that have been spent but still exist on the blockchain for digital provenance.

2. Then the transaction will fail and be declined.

3. The wallet looks at the possible transaction options on the blockchain and recommends the most optimal fee choice.

4. I would try to use different addresses each time to send my btc so that entities observing my transactions won’t be able to easily track my spending behavior.

[Andres83]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXO stand for: Unspend Transaction Output, means to be the transaction made from previos outputs to your wallet now being the inputs for the function that creates outputs for the receiver wallet.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   The transaction would fail when the wallet checks for the previos inputs.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   The transaction fee shows when you subtract the inputs and outputs.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   By using many diferent inputs and outputs.

[Callen]

1.unspent transaction outputs are transaction inputs that you haven’t done anything with.
2. If you don’t have enough utxo’s the transaction would be cancelled.
3. Wallet checks the Blockchain for similar transactions and figures your fee. Or input minus output= fee
4.different addresses for input utxo’s and use different address for output.

[RickyE]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXO are transactions sent to you that have not been spent.
   Such as your friend sends you some BC, say 0.3. Until you
   make a transaction after it being sent to you it will be considered
   0.3 unspent BC. As soon as you make a transaction it will be brought
   over to the output side of the transaction that is sent to you as your balance.
   Or your change from the transaction. All you BC must show up on the output side.
   input = Output + fees. Your input side is the UTXO.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   The transaction will not happen.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   The difference between the output from the input.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   Use a single input with many outputs.

[R_G]

1. UTOX are the unspent input and the sum of it is your available balance.

2. It would add up your total OTXU to execute the transaction but will be invalid if sum is not large enough to cover the transaction.

3. input - output = fee

4. By increasing the number of output address.

[nutrina]

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

Unspent transaction outputs are the unspent inputs you have received.

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

If the sum of the UTXO is large enough to cover my spending (plus fee), then it will be executed, otherwise not.
It is not the amount of a single UTCO that matters but the sum of them all which make up the wallet balance.

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

The fee is normally automatically calculated (inputs - outputs), and substracted from the input towards ourselves (the change that we get).

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

You can anonymise yourself by moving the amounts you plan to spend to different spending wallets, so they are separated from your main wallet for example.

[Alko89]

@zookeeper

Then the transaction will fail and be declined.

@Andres83

The transaction would fail when the wallet checks for the previos inputs.

@Callen

2. If you don’t have enough utxo’s the transaction would be cancelled.

@RickyE

The transaction will not happen.

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

[scuderia992]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   A. Your wallet balance from unspent funds
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   A. The miners would invalidate the transaction due to lack of sufficient funds to cover transaction.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   A. The transaction fee shows up in the input and output transaction when transaction takes place. It is based on the most reasonable transaction fees that were placed recently in the blockchain.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   A. The transaction does not specify the names of individuals or companies and just has inputs and outputs. Therefore you do not know how did the transaction. That way privacy it increases privacy.

[OlgaB]

1. UTXOs are inputs that have not been yet transformed to outputs.
2. There is the possibility to add up two or more UTXOs so that you can cover the transaction. In case the sum is bigger that the output needed, you can send back to you the rest (after the fee is taken).
3. The calculation formula for the fee is Inputs - Ouputs. The wallet calculates the fee by choosing the best option; there are some wallets that give you the possibility to choose the fee.
4. There is the possibility to use different addresses for each transaction you receive.

[Madness]

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

1. UTXO is a transaction that was send to you and you haven’t spend yet.

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

2. Your wallet is summing up your UTXOs if your combined UTXOs are enough to make the transaction you are trying to make then it will go through if not the blockchain will simply say sorry my friend insufficient funds.

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

3. The wallet was created to use your private key to construct inputs and outputs and will search the blockchain for previous fees that that will give the best result in our case this will mean our transaction will go through fast enough.

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

4.Creating different addresses will give you more different outputs while making those amazing BTC transactions.

[888]

1. UTXO’s are the previously received funds to your wallet, that is available to spend as output.

2. Then my wallet will automatically bundle multiple UTXO’s

3. Sometimes you can define that yourself and in other wallets the wallet automatically estimates a fee that will brodcast your transaction to the blockchain fast based on what fees have been previously needed.

4. you can send funds back to yourself in another wallet in the same transaction you’re sending funds to someone else, making it hard to track who is the owner of a wallet.

[RickyE]

Alko89 thanks for the clarity. Forums are new to me. So are you saying I am correct but needed to add (“You can use multiple UTXOs as inputs to a new tx. If you still don’t have enough the transaction will not happen.”) ?

[flyingnarwhal]

1. A UTXO is a transaction where a wallet has received currency but has not yet spent it.

2. Your wallet, along with other nodes on the blockchain, would disaprove of the transaction.

3. The fee is the difference between the transaction and the UTXO.

4. You could use a different address for each transaction.(Am I missing something here?)