Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#5167

1.Transactions, which you have received and can be spend
2.Transactions will be declined
3.Fee is the difference between inputs and outputs.
4.You can use a multiple type of different wallets.

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#5168
  1. There are transactions which have come to wallet owner but was not spent yet.
  2. UTXOs will have to be combined in that manner the output transaction will be covered.
  3. Bitcoin wallet specifies fee as a difference between UTXOs(inputs of transactions) and outputs of transactions.
  4. I can create multiple transaction outputs in order to hide the real recipient among other outputs which can be my other wallet addresses.
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#5169

A1. UTXOs:

  • The amount of digital currency remaining after a cryptocurrency transaction is executed.
  • Are processed continuously and are responsible for beginning and ending each transaction.
  • When a transaction is completed, any unspent outputs are deposited back into a database as inputs which can be used at a later date for a new transactions.

A2. My wallet adds all my UTXOs together. If I had enough UTXOs when they are collectively added together, the transaction would be processed. Otherwise, the transaction would be rejected.

A3. The transaction fee is implied rather than specified. The amount sent to the other accounts (including back to my own if there is any leftover) will add up to slightly less than the sum of all the UTXO’s input. That difference is the transaction fee.

A4. Since we cannot be sure who each output transaction goes to due to the encryption, we cannot be sure what value of the UTXOs output back to yourself.

https://quizlet.com/476832680/bitcoin-101-wallets-transactions-and-utxo-flash-cards/#:~:text=What%20would%20happen%20if%20you,the%20transaction%20would%20be%20rejected.

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#5170
  1. Its all of the transactions that you receive to your wallet but have not spend yet.
  2. This one is tricky xD Wallet will calculate the sum of all UTXOs and if its bigger you cover the transaction plus fee and the rest can be send to your wallet. If the sum of UTXOs are still not enough either ask you parents/friends to send you some coins or earn more coins :wink:
  3. Checks the input (the sum of UTXOs you have) and output (how much you need to pay). Input - Output is usually the fee that you need to pay though in some wallets you can dedicate more or less of the fee which may influence how long your transaction will be processed (added to blockchain by miners)
  4. One of the key concepts of the blockchain and wallets is that it is not possible to trace who and to whom the transaction was send unless you give/reveal all public key addresses of your wallets (as you can have more than one address and wallet) to everyone. So you can send the transaction to a few wallets including yours at once.
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#5171

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.

#5172

You can just use multiple addresses in the same wallet.

#5173
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXOs are output transactions that are stored on the block chain and are ready to be spent.

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

Well then you would not be able to complete the transaction on the blockchain. You would either choose to cancel the transaction or add more crypto to the UTXO to complete the transaction plus fees.

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

The wallet’s role is to sum together all the UTXO’s and show the balance. It would then automatically calculate the best and fastest fee to complete the transaction.

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

Use a different output address each time you make a transaction.

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#5174
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are output transactions that are stored on the block chain and are ready to be spent.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Well then you would not be able to complete the transaction on the blockchain. You would either choose to cancel the transaction or add more crypto to the UTXO to complete the transaction plus fees.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The wallet’s role is to sum together all the UTXO’s and show the balance. It would then automatically calculate the best and fastest fee to complete the transaction.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Use a different output address each time you make a transaction.
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#5175

  1. UTXO means unspend transaction outputs, which is basically the balance of the wallet that is composed by unspend outputs of the previous transaction.

  2. The transaction will be rejected, because you have no funds.

  3. Inputs - Outputs = Tx Fees

  4. From outside eyes it cant be identified where the inputs and outputs come from.

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#5176

  1. UTXO’s are the crypto you have recieved and are able to use for transactions

  2. You would have to use another UTXO and get the “change back”

  3. It will look at the last transactions on the blockchain and suggest the one that will be the best price to get the fastest transaction done relatively quickly

  4. This is eather way over my head or super simple. Privacy is not anonymity. These transactions are anonymous but not private.

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#5177

  1. UTXO - a collection TX funds generated from a previous TX

  2. tx will be denied

  3. input - output = fee ( median # from recent Tx )

  4. UTXO are always changing to new unique outputs/amounts , complete anonymity in every Tx hash

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#5178

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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#5179

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are output of the transection and will work as input for someone else. It’s unspent money that someone or you yourself send to you.

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

Wallet will look for more UTXO and complete the transection and you will receive the change back to your own address.

  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Wallet suggest the transection fee by looking at the recent block. you can adjust the fee for yourself as well. Miner choose the high fees transection first to process.

  2. add new and more than one address when sending the transaction including the one you control. address are not linked to the identity so no one knows from where the money is moving.

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#5180

Thanks for the clarification!

#5181

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Outputs from other transactions that are not spent yet. If you want to spend a certain amount of bitcoin, utxo’s you own are added together to be spent.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Other utxo’s that you own will be added until you have enough for the transaction.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It will be deducted from the utxo’s used for the transaction. So, the resultant output would be smaller than the inputs combined as the fee.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    If you create different addresses each time you do a transaction, all the bitcoin will be moved to that new address (minus the fee or payable amount). Since addresses are not linked to an identity it is hard to try to link utxo’s to an individual.

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#5182
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO are list of outputs that we received from someone else and can be used to create our own transactions, where it becomes our input.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    If SUM of all of your UTXO is large enough to cover transaction, you can send multiple UTXO to be above the required amount and you will send yourself the “rest” (change)
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It would suggest the transaction fee based on the recent history of transaction fees, so our transaction would be added to the blockchain reasonably fast enough.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    If i would have several wallets, i could send the BTC to other adresses of mine. Since adresses are not linked, it is hard to track if it is my adress or someone elses.
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#5183

UTXOs are essentially unspent outputs from previous transactions.

If you don’t have any single UTXO large enough to cover your desired transaction, you will end up with multiple inputs.

A wallet would specify the tx fee as one of the outputs of a transaction. It would equal the input, minus the output.

The notion of inputs & outputs increases privacy because people can use multiple addresses, and ‘accounts/balances’ are not easily linked with user data.

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#5184

  1. UTXOs are outputs that have been sent to a Wallet/address that have not been spent. Unspent Transactions.

  2. The blockchain would not recognize the transaction. Or you would have to combine more than one UTXO to have the sum be equal to or greater than the transaction.

  3. It generates a fee based on past transaction fees, and it also takes into consideration of time. The amount of time to finalize the transaction on the blockchain,

  4. When spending an UTXO, You can send the BTC to wallets that you control. A person could in reality have 100s of wallets with small sums. I guess that would draw less attention to one wallet with a large sum. One wallet with 50 BTC or 100 wallets with .5 BTC each. Not many people looking at the wallets with .5 but 50 BTC in one would be an attention getter.

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#5185

  1. UTXO are transactions you have received and have not spent or sent on therefore the name unspent transaction outputs. Similar to receiving money in your bank account and have not send on or withdrawn.

  2. The txn would be declined or more than one UTXO is used.

  3. A fee is predetermined or chosen and can be checked by subtracting the input from the output.

  4. Transactions can be sent to multiple addresses including to yourself also from the outside one cannot determine where an input is being sent even if Sent back to yourself.

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#5186

The UTXO is the output of a transaction going to another wallet, or potentially back to another address of yours

If you don’t have enough UTXO’s it will look on the blockchain for other UTXO’s to cover the transaction, then leave the remainder unspent in your wallet available for next time

It takes a guess at the most likely fee through parameters to cover the fee. This normally works as the fee is the input less the output, however not exactly as the wallet needs to check the fee amount on the blockchain to verify the fee amount is correct

Transaction outputs and inputs muddy the waters, making it difficult for outside parties to easily identify the recipients of transactions. You could send outputs back to yourself to make your funds more difficult to track

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