Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#4585

@Alko89, Now i understood that the question was referring an UXTO as inputs. Thanks!

#4586

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

1 Like
#4587

Its reffering to UTXOs in general. They are unspent outputs from previous txs that can be used as inputs to new ones.

#4588

Thanks for you feedback and clarification, Alko. Much appreciated. :upside_down_face:

#4589

  1. UTXOs are Transaction Inputs to your account which you have not spent yet. Your wallet will ask the Blockchain what UTXOs can be spent by your Private Key.

  2. If you don’t have a single UTXO that is large enough to cover a transaction. Then you would use or add another UTXO until the sum of the UTXOs are greater than or equal to the cost of the transaction. If it is greater than the cost, then you include an output to go back to yourself, because all of the Inputs (UTXOs) must be spent.

  3. Most bitcoin wallets specify the fee by the difference between Input and Ouput (Input - Output = TX Fees). The fees are not specified in the Output section.

  4. A Person with Multiple Bitcoin addresses can make transactions among those addresses, and each address is anonymous. Basically, a person can just cycle any amount of Bitcoin from his address to another address that he also owns. This increases Privacy because one address is already anonymous but adding multiple addresses makes it basically impossible to be tracked.

1 Like
#4590
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • These are the unspent coins in my wallet.
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • It will sum up and if the total amount of UTXO-s is large enough to cover the tx, it will happen. otherwise, the tx will fail.
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • Fees are implied.
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • More inputs & outputs lead to more privacy.
1 Like
#4591

  1. When you recieve an amount to your wallet, an input, is is defined as UTXO until it is spent in a transaction, an output.

  2. If I don´t have one UTXO large enough, several UTXO´s can be combined. The remaining unspent amount minus the transaction fee will be sent back to my wallet.

  3. The wallet will look at recent fees and propose a fee which will give a reasonable timeframe for the transaction to take place.

  4. I could have several adresses in my wallet to use.

1 Like
#4592
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO are the total amount of inputs that you receive on your wallet.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    If a single UTXO isn´t large enough the wallet will combine the several outputs that i have until it reaches the sum to cover the transaction.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Generates the total amount on the ouput that i want to send plus the fees, in other words UTXO = output + fees.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    The owner of the wallet can generate several addresses, therefore increasing the privacy between transactions.
1 Like
#4593

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    They are the balance to spend in your wallet

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

Not enough UTXO = No Tx

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

The wallet will try to get the fee from previous Txs to get your tx fast into the blockchain

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

Nobody except the owner of the Private Key can know about the TX.
You can use different addresses to avoid tracking too

1 Like
#4594
  1. UTXO is an unspent transaction through a lack of output.
  2. Transaction would be declined due to lack of coverage.
  3. Input and output difference.
  4. Different addresses for transactions.
1 Like
#4595

  1. UTXOs are outputs that result from the inputs of BTC transactions that are available to be spend because they have not been spent yet.

  2. Transaction will not be able to be processed.

  3. A transaction fee is specified as input - output = fee

  4. Privacy is increased with BTCs inputs and outputs because the outputs do not necessarily come from the input. The output is not related the input.

2 Likes
#4596
  • UTXOs are all the transactions whose stored bitcoins are not spent and are held by the person whose bitcoin address has been mentioned.
  • The transaction will not confirm
  • It looks at the recent tx fees on the blockchain and proposes u the value
  • Generate new output addresses, and also have multiple output addresses
1 Like
#4597

1.Outputs from a previous transaction that are available and have not been spent(summed together = your balance)

2.It will summ up other UTXO’s untill you have enough funds. If there are not enough UTXO’s available,the transaction would be invalid.

3.By subtracting the input from the output (input-output).

4.By having more output addresses ecrypted with your private key(for example when output goes back to the wallet) that increases the difficulty of tracking someone.

#4598

1.Outputs from a previous transaction that are available and have not been spent(summed together = your balance)

2.It will summ up other UTXO’s untill you have enough funds. If there are not enough UTXO’s available,the transaction would be invalid.

3.By subtracting the input from the output (input-output).

4.By having more output addresses ecrypted with your private key(for example when output
goes back to the wallet) that increases the difficulty of tracking someone.

1 Like
#4599
  1. They collectively are the balance of a wallet
  2. If you have more UTXOs they are added together, if the total does not cover the cost, transaction will be declined
  3. Bitcoin wallet calculates the fee from the the inputs and outputs of the TX
  4. UTXO layer adds anonymity and privacy as it is hard to tell which outputs go to the transaction and which come back as ‘change’
1 Like
#4600

  1. Unspent Transaction Outputs (UTXOs) are similar to bank account balances in that they correspond to the sum of all received inputs which have yet to be spent (i.e. the sum of how many BTC one has received minus any outputs). The BTC blockchain itself tracks UTXOs (i.e. how much BTC each address has received but not yet spent).

  2. If you don’t have any single UTXO that is large enough to cover for your transaction, your wallet will automatically add-up some (or all) of your inputs so as to cover the transaction. This will usually involve sending more BTC than is actually required (with the surplus being sent from your address back to your address).

  3. A bitcoin wallet would specify the transaction fee when creating a transaction by determining the recent average TX fee pertaining to TXs which have been included in recent blocks. In other words, the wallet will determine how much sats/byte will be required for the TX to be included in the next block. Some hardware wallets, such as Trezor and Ledger offer the user the opportunity to select a custom TX fee: the higher the fee, the quicker the “processing” time. If a fee is too small, however, a TX could become temporarily “stuck” in the Mempool…

  4. You could use the notion of transaction inputs and outputs to increase privacy in your transaction by sending a larger amount of BTC than is actually required, with only a portion being sent to the intended recipient and with the rest being sent to an address that actually belongs to the sender.

1 Like
#4601

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. :slight_smile:

#4602

  1. A UTXO is the balance of digital currency in your wallet.

  2. If you did not have any single UTXO that is large enough to cover your transaction then you wont be able to send that transaction.

  3. Input-Output=fee

  4. The notion of transaction inputs and outputs can be used to increase privacy in a transaction because by using newly generated address for each input and output it is hard to track where exactly the currency is going.

1 Like
#4603
  1. UTXOs are the input that I am able to spent and create transactions
  2. The transaction will be declined if you don’t have any utxo to spend
  3. The tx fees will always be the subtraction between the input and output
  4. Creating new output addresses.
1 Like
#4604

The remaining amount of BTC left after executing a transaction, they are responsible for beginning and ending a transaction from wallet to wallet, and any unspent outputs are deposited in the database as inputs for the next transaction.

The transaction would not be valid and would not go through. Most likely node would stop if from going through or wallet may even prevent it from going through.

UTXO output minus UTXO input

You can use different bitcoin addresses. Possibly different ones for transactions.

1 Like