Homework on Bitcoin Transactions and UTXO - Questions

[KobiCrypto]

1. UTXOs are the different incomes from previous transactions, that when totaled, equal your wallet balance.

2. Multiple UTXOs would be outputted, and the change from the transaction is sent back to you, depending on the fee.

3. The wallet calculates the fee based on previous transactions, the input and the output.

4. Transactions can not be tracked as an output can come from multiple inputs.

[ao_3000]

1. UTXO is how much coins are left after the transaction, a wallet balance
2. declined transaction
3. Output minus input
4. multiple outputs

[Maki]

@ao_3000

declined transaction

You can use multiple UTXOs as inputs to a new tx. If that isn’t enough to cover your transaction then your transaction would be refused.

[Mateusz]

1. UTXOs are transaction outputs from previous transaction addressed to your wallet that haven’t been spent. The total of all UTXOs addressed to a wallet is used to display the balance by that wallet.
2. The wallet will accumulate all possible smaller UTXOs until the required transaction size is met. If there are insufficient UTXOs to cover the transaction, the transaction as such is rejected.
3. The difference between input and output of the transaction is the implicit transaction fee.
4. You can isolate each transaction by specifying a new Bitcoin Address every time you receive a new payment. This makes it difficult to associate the addresses to a single owner.

[Jmoff]

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

UTXOs are unspent inputs that when added together, equal the total balance in one’s wallet.

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

You would combine one or more UTXOs to form an agreeable transaction. If the total amount of UTXOs is more than what the sender intends to send to the receiver, the sender would send the leftover money back to himself. In other words, he would input the output back to his wallet.

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

The transaction fee is the input subtracted by the output.

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

By generating new addresses for your output, whether it’s to a receiver or back to yourself, you make your transactions more private.

[Aman]

1. UTXO is the users balance left over in wallet.
2. You’re Broke. Get Back to Work. The transaction would be declined.
3. Wallet checks the figures to see if UTXO can make up for the entire amount. Fee is difference between the input minus output after a transaction is approved.
4. Fracture outputs to multiple addresses that you ‘may or may not’ control.

[Sarcasshole]

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

UTXO’s are a wallets received “inputs” from another addresses’ outputs to your address. this input is in essence, an unspent output for your address from the previous transaction. (perspective)

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   your wallet will check the sum of UTXO’s belonging to your address and formulate a Tx through combining said sum granted the sum is great enough itself.

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

sum of UTXO’s & target addresses - fee = TX

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

addresses are hashes which makes them pseudo-anonymous, thus it’s difficult to prove where exactly the btc is going, and which portion is the Tx & which may be the remainder from Tx.

[santoretech]

@ivan

• Describe what Unspent Transaction Outputs (UTXO) are.
• What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
• How would a bitcoin wallet specify the transaction fee when creating a transaction?
• How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?

1. UTXO is an output from transactions that are not yet spent.
2. The UTXO’s would be combined and return the remainder after fees to the wallet address.
3. The fee is the difference between the the input and the output.
4. Always use a unique address for a received transaction.

[peace4adam]

• Describe what Unspent Transaction Outputs (UTXO) are.
  total of UTXO is the wallet balance.

A collection of these are the amount has to use in future transactions. These are how wallets are able to know there contents and are able to make transactions.

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

You would need to use multiple UTXOs together to cover the transection.

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

UTXO minus UTXO that is returned to the original wallet.

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

use a private wallet

[CryptoLearner]

UTXO are the outputs that are sent to the recipient in a transaction and what also what is returned to the sender.

If you do not have a single UTXO that is large enough to complete a transaction, your wallet will sum up all of your UTXOs to see if there is enough to complete the transaction and return the difference as UTXOs.

Your transaction fee is the difference between your inputs and outputs.

Since every transaction uses all of your UTXO, and sends various amounts to different addresses, it is hard to tell which output was sent to a recipient and which outputs are being returned to the sender.

[Alko89]

@Aman

You’re Broke. Get Back to Work. The transaction would be declined.

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

[Martin_Garcia_Garcia]

@ivan

• Describe what Unspent Transaction Outputs (UTXO) are.
• What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
• How would a bitcoin wallet specify the transaction fee when creating a transaction?
• How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?

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

UTXO in the btc blockchain for example is the amount of btc that your wallet can spent because is always equal to the remaining funds you have, for example if I have 0 btc on my wallet and two friends send me 0.2BTC each, now i have 0,4BTC total balance (one 0.2BTC UTXO from one friend and another 0.2BTC UTXO the other friend)

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

Your transaction will be reversed (ignored) because the unspent transaction outputs from your wallet do not justify that you have sufficient funds to complete the transaction.

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

Your wallet will recommend you the best fee.
tx= outputs + tx fee.

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

Well, if you won’t spend all the utxo on your transaction, you will need to send something back to you, because you need always to use all your UTXOs, so when you send something back to you, if you put a new adress you are getting more privacy because people canno’t guess if that is also your wallet or not.

[Simenv]

Unspent transaction outputs (UTXO) are the outputs of prior transactions that have been sent to a wallet. The sum of these transaction outputs constitutes the balance of a wallet.

If no single UTXO is sufficient to cover a transaction then the wallet will use several UTXOs as input provided they are available, sum them together and construct the outputs according to the sum of the inputs minus the fee. The only requirement is that the sum of the outputs plus the fee is equal to the sum of the inputs. The number of inputs and outputs does not matter.

The Bitcoin wallet specifies the transaction fee implicitly. It simply reduces the outputs by the amount that should be paid in fees. Since every transaction is (input = output+fee) then the miner knows what the fee is by (input - output = fee)

By using more than one BTC address I could send the change to another address that I own or several others.

[spaceballs]

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

• UTXOs are former inputs (transactions) to the wallet. all UTXOs together make the wallet balance.
  “inputs are old outputs from previous transactions”

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

• nothing. you need at least one single UTXO. if the amount is not large enough, you will not be able to finish the transaction.

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

• it depends on the (type of) wallet, in some wallets you can choose the fee yourself, other wallets calculate the best or cheapest fee.

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

• to protect your privacy, you should use a new address each time you receive a new payment. https://bitcoin.org/en/protect-your-privacy

[Maki]

@spaceballs

nothing. you need at least one single UTXO. if the amount is not large enough, you will not be able to finish the transaction.

You can use multiple UTXOs as inputs to a new tx. If that isn’t enough to cover your transaction then your transaction would be refused.

[Eri_Miyama]

Thank u Maki

[Vincent20]

1. Describe what Unspent Transaction Outputs (UTXO) are. UTXOs refers to the amount of currency an individual has remaining after a transactions has occurred.
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. In order for transactions to occur, a person will need to have enough UTXO to cover transaction and any fees.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction? Your wallet would look at previous fees and propose a fee that will get you process into the blockchain as quick as possible.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? Inputs and outputs are shown as an encrypted address when viewing transactions. Therefore, no one knows who is the actual person sending and/or receiving currency.

[MRsakib]

1. UTXO’s are unspent transaction output from a previous transaction.
2. Your Wallet adds up all UTXO’s together and even if it is not large enough then the transaction will be discarded.
3. By differencing output from the input
4. By increasing the number of output addresses as it will be difficult to figure out because of the encryption.

[Estefano_Debernardi]

Hello Maki, sorry but thats what i meant, how would you word it? Or Just “you could not performe a transaccion”?

Thanks!

[reggie_nash]

1. UTXO’s is digital currency sent you you in a previous transaction, that has not been used for a new transaction yet.
2. If you don’t have one UTXO that is big enough to cover one transaction, you can you UTXO’s from multiple addresses in order to process one transaction.
3. In any transaction the Input(UTXO)=Output + Transaction fee. A bitcoin wallet looks at historical data on the blockchain to see how much it has costs previously to complete a transaction of the same size. It recommends a fee that will add your transaction to the blockchain in a reasonable amount of time. Some wallets offer multiple fees that can fulfill the transaction faster or slower.
4. An example to increase privacy would be to use multiple inputs to pay for one transactions. The sum of the inputs will be larger than the output +fee. Then once the output has been disbursed, redistribute the leftover currency into three seperate addresses in my wallet. This makes it very difficult not only to track who each address belongs to, but also how many people are involved that particular transaction.