Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#4685

@Maki ok got it thanks for correcting me :blush: :blush: :sweat_smile:

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#4686 
1. Describe what Unspent Transaction Outputs (UTXO) are.

When people say the have Bitcoin, what they really mean is that they have some Unspent Transaction Outputs that have been sent to their address, and they control this UTXO by the virtue of their private keys. All blockchain does is tracks UTXO’s and it can either be a UTXO or a spent transaction output.

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

Well, one of two things - first being - if you do not have any other UTXOs then you do not have a sufficient amount to be able to send the transaction of your chosen amount. Option two, if you have some other UTXOs in your wallet, they may be combined, so that several of them form the transaction output.

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

Wallets, or rather, their software ‘‘suggests’’ a fee of that amount which is likely to get the transactions mined into the blockchain, considering the current conditions on-chain and other fees currently being ‘‘paid’’. Also, the fee is = OUTPUT subtracted from INPUT.

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

An input is formed from outputs, so when you spend a UTXO you can spend it to several directions (addresses) at once, making it harder to track. This principle is taken to the extreme in what is known as coin-mixers.

“Everything in the world is about sex except sex. Sex is about power.”

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#4687

1 a UTXO are transaction inputs without transaction outputs.
2 you are broke, get back to work.
3 the transaction fee is specified as: utxo = txo + fee.
4 by obfuscating the transaction. send small transactions to multiple wallets as there are a few wallets of yourself.

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#4688

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

#4689

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    inputs are old outputs, transactions received an ready to spend

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    it will sum up all until it reaches the neceamount

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

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    by sending output to different wallets

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#4690

  1. They are the output that you previously have received, you can spend it on future transactions.

  2. It will use more then one UTXO and rturn the remaining change to you.

  3. It will take the input and minus it with the output.

  4. To make it more private you can send it to multiple outputs and use one input.

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#4691
  1. UTXO is change left from the previous transaction.
  2. If you don’t have any single UTXO that is large enough to cover the transaction the output will fail.
  3. Input= Output + Fee;
  4. You can use different address to each received transactions
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#4692
  1. The Mempool is a datastructure which consist of a list of unconfirmed transactions that each node contains.
  2. If the miners can’t keep up with the rate of the new transaction, the mempool with continue to get larger also creating larger transaction fees
  3. A growing Mempool effects transaction fees by making them go up which will have people willing to pay so their transaction can be processed on.
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#4693

  1. UTXOs are the inputs one receives in a transaction that tells the wallet what the private key is able to spend.

  2. If there is not another UTXO that the wallet is able to use, then the transaction will get declined. However, if there is another UTXO available, then the wallet will take it in order to make it enough to cover for the transaction. You may receive change back if the sum of both UTXOs were more than enough. The wallet will send the remains back to itself.

  3. The BTC wallet will generate a fee that it thinks is best. The total input minus the total output is the fee.

  4. You could use the notion of tx inputs and outputs to increase privacy in your tx by having more than one wallet which will give you more than one address. No one is able to tell who owns the addresses of both the sender and the receiver.

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#4694

  1. UTXOs are my transaction Inputs that I haven’t spent yet.

  2. Other UTXOs would be added until the transaction is fully funded.

  3. Fee = Input - UTXO

  4. You can use several addresses that you control.

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#4695

  1. These are the unspent input amounts that you have received in your wallet.

  2. You will need to use all UTXOs and send the correct amount to the address you are transacting with and the ‘change’ will be sent to yourself.

  3. The fee is determined by the wallet based on the current block rates. This can be calculated by deducting the output amount from the input amount on any given transaction.

  4. Use different output addresses that you own when sending an amount back to yourself.

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#4696

1 utxo are money recieved but not spent
2 the transaction will be rejected
3 wallets shops fees and chooses one that will complete the transaction quickly
4 use different addresses

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#4697

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:

#4698

  1. UTXOs reffer to the amount of bitcoin left after receiving a transaction via an input. The public ledger, i.e. the blockchain, has to have ballance between inputs and outpus.

  2. The transaction won’t be executed.

  3. The difference between inputs and outputs which will be deducted from the transaction.

  4. Have several outputs in which one or more are your own adresses that are different from the one from the input or inputs.

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#4699
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXO’s as description tells are outputs from previous transaction that can be spent for particular wallet, so they are also inputs into new a transaction.

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

Transaction is going to be rejected and it won’t be executed.

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

Looking at previous few blocks and adjust fee accordingly. Fee = Inputs - Outputs

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

You can use multiple addresses that you are in control or use service as coinjoin :).

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#4700

unspent transaction outputs are the funds available from previous transactions going in to your wallet. payments received remain utxo until they are spent
if there isnt a large enough utxo for the transaction you wish to make multiple utxos will be used
the wallet would specify a fee large enough to make the transaction go smoothly by looking at previous transactions and suggesting a similar amount
multiple transactions sent at once make it impossible to identify what went where

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#4701
  1. Describe what Unspent Transaction Outputs (UTXO) are.

Inputs need to be spent through outputs. This is through the wallet, where unspent UTXOs are normally spent on wallet owner or someone else in a transaction.

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

If the blockchain indicates that a user has insufficient UTXO then a transaction cannot be executed. “You can use multiple UTXOs as inputs to a new tx. If you still don’t have enough then your tx won’t happen.”

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

The fee is implied by what the transaction can bring in for the miners who choose the transactions with the higher fees for incentive.

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

Inputs can produce outputs that have different addresses

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#4702

  1. UTXOs are bitcoin that has been received from another address within but hasn’t been spent.

  2. you send all the UTXOs you have and send the change back to yourself

  3. it calculates itautomaticly based on how much is being spent.

  4. If input is always equal to output, it is easy to reconcile the account and any discrepancies can be easily tracked

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#4703

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    The balance left in your wallet

  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?
    Total output minus total input

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    By creating more addresses and transferring funds to yourself

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#4704
  1. What is the mempool?
    • Mempools are unconfirmed transaction
  2. What happens if the miners can’t keep up with the rate of the new transaction?
    • it means longer transaction times
  3. How does a growing mempool effect transaction fees?
    • It will be more complicated and fees will go up.
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