Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#4887
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO outputs are money that you have spent (ie. the money has left your wallet and is going to someone). The total UTXO is the total amount available to spend.
  2. What would happen if you don’t have any single UTXO that is large enough to cover your transaction?
    The transaction would fail if you don’t have enough total UTXO’s to pay for the transaction.
  3. The bitcoin wallet works out the transaction fee when it constructs the transaction.
    input minus output +fee.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You could have the inputs coming from many sources and the outputs going out to many sources.
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#4888

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Outputs of a transaction which have not been spend yet. So if somebody sends me 1BTC that is the output of that transaction. It is a UTXO until I spend it.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    That transaction would be invalid and declined from the network. You would not be able to send more BTC then your current sum of UTXO’s

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

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Create many outputs. But those adresses would be under mine controll. It would be hard to know to whom all those addresses belong.

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#4889

thx Maki :slight_smile: sure you can use multiple UTXOs.
I misunderstood “if you don’t have any single UTXO” :laughing:

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#4890

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

Outputs from other transactions that are not spent yet

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

The transaction will fail thus not being accepted by the miners on the second stage

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

Fee=Input -Output

4)How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You could make multiple transactions to others and to yourself. From outside it is impossible to know which transaction went where, since addresses are not linked to an identity.

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#4891
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • unspent bitcoins that have been sent to you by others
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • combine UTXOs to cover the full value; if there is overage send the overage back to yourself
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • by leaving that amount out of the total output; it is implied
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • it will be impossible to discern how many parties actually received bitcoin because some may be going back to yourself
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#4892

  • Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are unspent transactions you have received in your wallet.

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

  • How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It will take the difference of the input against the output.

  • How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    When making a transaction, send it to many different addresses (output channels).

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#4893

  1. UTXO is the output of a transaction that can in turn become an input

  2. You would use mutlple UTXO’s and then send back any change.

  3. Inputs = outputs +tx fess and spaceships

  4. use a privacy network or coin and be nice

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#4894

what do you mean by privacy network??

#4895
  1. UTXO are unspent outputs from the previous transaction that your wallet is keeping track of.
  2. It will add up other UTXOs to create a sum large enough to cover your transaction + fee. Only if the sum of all outstanding UTXOs is not large enough, then transaction will be invalid.
  3. Inputs = Outputs + transaction fee. A BTC wallet normally suggests the most reasonable fee that could process transaction the fastest.
  4. Utilizing multiple addresses for different outputs in each transaction.
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#4896

Thank you for the clarification.

#4897
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXOs are your change from your previous transaction.

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

Your transaction would be declined.

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

Transaction fee is never specified; it is implied. The wallet looks at the blockchain and decides the best fee based on the most current blockchain transaction fees.

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

Use multiple inputs and outputs in the transaction.

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#4898

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.

#4899

I misunderstood the question. Thank you for clarifying Maki!

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#4900

  1. Describe what Unspent Transaction Outputs (UTXO) are
    UTXOs are the btc amounts that have been received by your address but have yet to be sent by you.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    The aggregate of the UTXOs must cover your proposed transaction + fees, any balance will be returned to your wallet.

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

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Perhaps send multiple inputs, multiple addresses

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#4901

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO are input transactions we have received which in total give us available balance for our key.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    When I have just that one, in this case, the transaction is rejected. When I have some more UTXO available, they will be sum and added together to cover that transaction.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    TX fee = INPUT - OUTPUT
    INPUT = OUTPUT + TX fee

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    By useing different address for each transaction.

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#4902

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO is an unspent transaction output.

  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 denied

3. How would a bitcoin wallet specify the transaction fee when creating a transaction? It will take the input and output from the transaction. And give you a fee that will get you in to the blockchain fast enough
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?

If an observer sees you send a transaction from your address, it’s difficult to tell whether you sent it to another address that you own, or to an address that is owned by someone else.

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#4903

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.

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#4904
  1. An unspent transaction output is the amount of bitcoin you are able to spend from your wallet.

2.Your wallet will combine all your UTXOs to produce a total sum that can be used to create your outgoing transaction.
3. A bitcoin wallet will deduct the input from the output to work out what the transaction fee should be.
4. Transactions can remain somewhat private because nobody on the outside can tell who owns each wallet that was involved in the transaction.

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#4905

  1. UTXO’s are unspent balance of transactions left in your wallet that are available to spend

  2. Simply the transaction would not happen.

  3. The bitcoin wallet would specify the transaction fee by calculating the input minus ouput and remainder being the fee.

  4. Your transaction is already quite private due to the hash details of the transaction. But to confuse a nosy viewer you could possibly send to multiple adresses you own, which would still not be recognisable from the hash details by a viewer.

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#4906

What about when you withdraw to your address from an exchange??