Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#4725
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    • In a transaction, it’s all the destination wallets and the amount associated to them so that the transaction can be processed.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    • The transaciton woN’t be valid and rejected by the validation node if the wallet didn,t prevent it in the first place.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    • It’s implicit based on the history of the wallet and actual unspent transaction Outputs sum minus all the funds sent to other wallets in a transaction
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    • Send back remaining funds to another address you own, never use the same BTC address as the destination or source of your transactions
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#4726

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

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#4727

  1. Unspent outputs of a previous transaction.

  2. The transaction would be invalid

  3. It would be the input which would be equal to the output plus the transaction fee.

  4. By using several inputs and outputs.

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#4728

First, 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.

#4729

UTXO’s are Transactions that were input into your wallet that hasn’t been used yet. For instance, Bill sent me .5 BTC and I received another .4 from Ian. I now have .9 BTC that are unspent.

What would happen is you would have get more coins.

A bitcoin wallet will specify the transaction fee by the total amount you have and minus the amount you want to send.

You can use the notoin of transaction inputs and outputs to increase your privacy in your transaction by setting the amount you want to be sent back to your wallet.

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#4730

1. Describe what Unspent Transaction Outputs (UTXO) are.
1.A. Unspent Transaction Outputs (UTXO) are a series of inputs from Bitcoins you received from other addresses and remains as UTXO until spent.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
2.A. The wallet can combine all the input Tx to equal enough for that Tx and Fee. If this still does not add up to the required amount including Tx Fee then you are unable to complete that tx.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
3.A. The wallet would combine all inputs and use input minus output plus the fee.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
4.A. Multiple inputs and outputs makes it harder to track your wallet, also you are able to create more by sending Tx to yourself or other owned addresses and then would not be linked to a specific address. You could also use a wallet or exchange service that does this by design.

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#4731

  1. Outputs of a transaction. Your current balance is all your UTXO’s.

  2. I will be split up. One part to the receiver, one part to fees and the rest goes back to you.

  3. Input minus output

  4. By using different addresses

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#4732
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • UTXOs are the monetary units that certain address (wallet) received via transactions but has not yet sent (included in transactions initiated by this address).
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • In such case the wallet will combine more than one UTXOs and sum them up in order to cover the amount to transact and the fee for the transaction. If there is some change it will be returned back to the sender.
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • It can be specified manually but usually the wallet calculates it, based on the current “rates”. It is expected that the wallet calculation is optimal.
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • Wallets deal with transaction inputs and outputs and they do not require any personal information that can be linked to concrete person (entity)
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#4733

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    A UTXO is a the remainder from a previous transaction on the blockchain and is usually represented as a balance in your wallet.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Your wallet would merge multiple UTXO’s together to cover the necessary input plus transaction fee creating a UTXO set.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The fee varies depending on the size of the transaction and the wallet your using based on how long it would take to confirm your transaction on the blockchain. The miners confirm the highest fee transactions first. The fee itself would be displayed as the difference between the input and the output of that transaction.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    The ability to group multiple UTXO’s and send different amounts to other addresses that you or someone else owns.

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#4734
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • Transactions you have received and can be spend.
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • The transaction would be declined by the wallet neither not accepted by the miners.
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • The difference between inputs and outputs.
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • Using multiple wallets.
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#4735
  1. UTXOs represent the amount of Bitcoin which can be spent.
  2. UTXOs can be combined so that the sum is greater than the desired transaction plus the fee.
  3. Transaction fee = UTXOs (inputs) - transaction amounts (outputs).
  4. Always use a different public key when receiving coins from others or yourself. (But not real effective with today’s tracking software.)
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#4736

First, 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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#4737

Describe what Unspent Transaction Outputs (UTXOs) are .
UTXOs are the unspent transactions that are available in your wallet.
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 enough UTXOs to cover your transaction then your transaction would be rejected.
How would a bitcoin wallet specify the transaction fee when creating a transaction?
A bitcoin wallet would check recent transaction fees and suggests those to the user - depending on the wallet the user can choose a fee.
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
In order to increase privacy in your transaction you could have more than one output address in your transaction which would make it difficult to track.

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#4738

  1. UTXOs outputs are transactions that are outgoing from a specific address. They are only possible if the amount is equal to or less than the inputs. You cannot spend more BTC than you received

  2. The transaction will not be confirmed and ultimately will not be valid. The balance of the sender would remain unchanged

  3. The fee is calculated by finding a difference between inputs and outputs, the fee itself is determined by how much the network is used. More traffic = higher fees

  4. There is no identity associated with the address, on the blockchain we can see that one address is sending a specific amount of BTC to another address, or multiple addresses are sending BTC to multiple addresses in the same transaction, we do not know if all of these addresses belong to one person or multiple entities

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#4739

  1. This is unused balance that reverts back to your wallet.

  2. Use multiple UTXO to complete the transaction.

  3. The difference between the input and output on blockchain

  4. Use multiple inputs and outputs in a single transaction.

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#4740

  1. UTXOs are the unspent values used for the next transaction. Like “change” from fiat dollars, saved for a future purchase.

  2. The wallet will sum up all the totals to equal the transaction + fees.

  3. The wallet can specify the transaction fee by subtracting the output value from the input - what’s left is the fee amount.

  4. If you look online at blockchain transactions you will see inputs and outputs, but there is no way to identify who made the transaction. No one has any idea how the money was spent after the input or to what address it’s been sent.

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#4741

  1. They are old inputs (now outputs) we receive in our wallet. Our private key will give us back the sum of verified outputs (known as our “balance”) ready to be spent.

  2. I won’t be able to do the transaction because input must always equal the output (UTXOs) + network fees.

  3. It will do it by calculating the difference between the input minus output.

  4. Use different addresses that we control. Or use a private blockchain :man_shrugging:

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#4742

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

#4743
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO’s are Unspent Transaction Outputs. Your wallet is responsible for gathering all your UTXO’s to give you a balance of what you can 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 single UTXO that is large enough to cover your transaction that it will use a number of UTXO’s as inputs to cover that amount if you have enough and send you the remainder of the transaction minus transaction fees as yet another UTXO as another output to add to your balance.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It would specify by charging you a specific amount as the transaction fee that it deems best for your interest and then you can see that transaction fee on either blockchain.com or simply by subtracting your outputs from your inputs.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You could use multiple inputs and outputs therefore people will not be able to tell how much of your transaction is going through as payments to others and how many inputs are going back to yourself.
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#4744
  1. Unspent transactions outputs are witch your wallet tracks and gives you balance on.
  2. The UTXO would be invalid or not accepted.
  3. The transaction fee is calculated based on the amount being sent and would configure best fee option.
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