Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#5107

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

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#5108

UTXOs are unspent outputs of the previous transaction…

it will check for another UTXO … if there is no other UTXO …the transaction will be cancelled …

input - out amount is transaction …

each time the address is different …

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#5109

  • UTXOs are the remnants from a previous transaction, which haven’t been spent.

  • Your wallet is smart and will search the blockchain for any other UTXO which can be pooled together to meet the total amount for the transaction. If there are no more UTXOs which can make up the desired total, the Tx will be denied.

Think of it like when u wanna buy a fizzy drink. It costs 70p (I’m from UK). You remember your mum gave u a 50p coin, so now your hand (wallet) is searching the blockchain (your pocket) for 20p. If it’s there, then u get the drink (transaction goes through). If it isn’t there, no drink for you :disappointed:

  • Our wallets calculate the fees by taking the output from the input (I - O). Anyone can verify this by checking a random transaction on a BTC Blockchain explorer

  • One could improve their privacy by using a lot of BTC addresses. Crypto wallets allow users to generate different addresses, which can be used to conduct different transactions, thus increasing anonymity (since people would find it harder to monitor your movements if you’re using different output addresses)

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#5110

Thx for the additional info :slight_smile:

#5111
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO’s are transactional outputs that have been sent to your wallet that are not yet spent by your wallet.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Smaller UTXO’s would be added to make up the difference and then whatever change left over credited to your wallet account
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The wallet would look at the blockchain and recent transactions and present you with a fee that is consistent with an average ranged price
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Transactions are not tied to the identity of users and transaction data is transmitted and forwarded by nodes to a random set of nodes.
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#5112
  1. Describe what Unspent Transaction Outputs (UTXO) are.

They are no “coins” in Bitcoin. The currency of transactions is UTXO. There must be at least one UTXO to create at least one output.

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

A wallet can have multiple UTXOs. Transactions can be created for the output to be sent back the originating wallet.

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

Normally, the wallet relays on the blockchain’s most current transaction fees to calculate the needed fee in order to transact at a reasonable rate.

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

There can be multiple inputs and outputs in any given transaction.

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#5113

1.An Unspent transaction output (UTXO) is an amount in Digital currently left after performing a transaction, only these UTXOs can be used as Input for new transactions.
2. If the UTXOs that I have (tracked by my private key in my wallet) are not enough to make a transaction, the transaction cannot be performed.
3.The wallet will calculate the transaction fee according to the network conditions (traffic) and the size of the transaction.
4.In a transaction, privacy is provided by its anonymity. The system calculates approximately how much was transferred,in order to make this info public, but the real information will be known only by the owner of the private key.

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#5114

1 unspent transactions are the balance remaining after sending crypto to a person’s wallet. The unspent portion gets sent back to your own wallet.

2 if one single transaction input isn’t enough to cover an output, then your wallet would draw from other inputs. The outputs and inputs have to be equal.

3 with regard to transaction fees: inputs=outputs+tx fees. The fees must be high enough for a miner to want to mine it.

  1. Keeping your transactions more simple will lead to the transaction fees being lower. The lower amount of parties involved in a transaction the more private as well.
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#5115

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO are one or more recipient addresses associated with a bitcoin amount for each transaction. UTXO are not associated with any other transaction otherwise it becomes an input of it.

  2. 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 and not created.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Usually, wallets check the current blockchain network conditions, then set dynamically the amount of the fees for the transaction that has to be sent.
    The following formula shows how it is calculated:
    Input - Fees = outputs

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    I do not think that’s possible to increase privacy using transaction inputs and outpouts, everything traceable.

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#5116

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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#5117

You could make a more complicated transaction by sending transactions to multiple outputs or By using a different address for each output you receive as a change.

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#5118
  1. UTXO is the input from your wallet that can be spent as an output.
  2. The transaction would be invalidated by the blockchain.
  3. The fee is the difference between the input and the output from the wallet.
    4.Because from the wallet you can send transactions to different addresses even to one that belongs to you without knowing everyone who is the real owner of the receiving addresses.
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#5119
  1. unspent Transaction Outputs is the remaining balance that your wallet keeps track of.
  2. It would use more than one UTXO.
  3. The fee is calculated from the inputs minus the outputs of a transaction.
    4.Using a different address for each transaction.
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#5120

  • Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are just as it sounds, outputs that have not been spent yet.

  • What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    The transaction would not be validated by nodes because you have insufficient funds. You can only spend the amount of UTXOs that you actually have.

  • How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It will look at the blockchain and see what the best option is to get your transaction added to the blockchain. It will subtract the output from the input to get the fees.

  • How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You can send some funds to yourself using a different address, anyone that sees the transactions wont know that you are sending it to yourself.

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#5121
  1. Describe what Unspent Transaction Outputs (UTXO) are. The total of UTXO is what is available in my wallet to spend. It is the sum of the total of the transactions that are sent to me

2.What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? The wallet would combine enough UTXO’s to cover the cost of the transaction provided you have enough money your wallet to cover

3 How would a bitcoin wallet specify the transaction fee when creating a transaction? You would take the UTXO minus the UTXO input and that is the fee

  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? Each output can be sent to multiple addresses as well as back to myself all created by my private key from my wallet. This creates anonymity which creates more privacy
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#5122
  1. These are Transaction recieved from other Persons (Siter, mother, job…) wich are saved on your private key
  2. They will be added together so there is enough to cover the transaction
  3. The difference between inputs and outputs.
  4. with a hard wallet
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#5123
  1. UTXO’s are unspent amounts yet to be included in a newly created transaction.
  2. Multiple UTXO’s can be added together to cover the balance and transaction fees and any excess amount will be sent back to your wallet.
  3. The transaction fee is the difference between inputs and outputs from the transaction.
  4. Use a different address for each transaction. Hardware wallets will take care of this for you.
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#5124

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    They are transactions that you receive from others and you haven’t spent yet.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Your transaction could succeed because your transaction is constructed with all of your UTXOs. The fee is deducted from sum of UTXOs and not a single a UTXO. If your sum of UTXOs couldn’t cover the fee, your transaction fails.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It looks at the blockchain and sees previous fees and gives it to you.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You could send smaller chunk of outputs to multiple of your addresses Your transactions are anonymous in the first place, so I don’t fully understand your question.

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#5125

My Answers:

  1. UTXOs are unspent outputs from a transaction that become inputs used at a later date for a new transaction.

  2. The wallet will identify more UTXOs to sum up the amount needed for the transaction, the remaining amount will be sent back to your address minus transaction fees. If you are short on the amount need the transaction will be invalid.

  3. The wallet checks resent transaction fees in the blockchain and will give you an averaged fee amount based off that.

  4. By using multiple output addresses and not knowing where those transactions are being sent to, from an outside perspective.

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#5126

  1. UTXO’s are basicly outputs to your adress that you haven’t spent yet. Every time you try to construct a transaction, the wallet collects the UTXO’s and chooses what UTXO’s it will use as input for the transaction. This output is then a UTXO for the adress that it was sent to.

  2. It would take several UTXO’s together and spend all of it. You then get the difference (change) sent back to you. If the sum of all the UTXO’s isn’t enough for the transaction, it will be declined.

  3. It will calculate a fee by making sure the transaction will go through fast enough while not paying more than needed.

  4. You can have multiple outputs. If the sender has multiple adresses, it is hard to determine what part of the outputs goes back to the sender.

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