1.Unspent Transaction Outputs UTXO are outputs from previous inputs.
2. Any single UTXO will be added by the wallet and if enough it will create an output.
If not enough single UTXO then there is no transaction.
3. A BTC Wallet will take the fee of the transaction from UTXO input equals Output plus fee.
That means total mount of output includes the fee.
4. Having more than one address or many different addresses for the transactions also in return to
yourself will significantly increase the security in regard to the privacy.
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Describe what Unspent Transaction Outputs (UTXO) are.
In the most simple terms, they are the monies that you have in your wallet at any given time. The blockchain just keeps track of unspent transactions, but not how much money you have in your individual wallet. Your wallet will then add that up, and tell you how much bitcoin you have. -
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? Then the transaction will be nullified, and not go through.
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How would a bitcoin wallet specify the transaction fee when creating a transaction?
Input-Output = Trx Fee -
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? You can send the Output to several different addresses to increase anonymity.
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Each wallet holds the private keys of a certain individual entity. When a transaction occurs the wallet queries the blockchain for any unspent outputs from previous transactions related to that particular private key and sums up the number.
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First your wallet will try to find any other UTXO so it can complete the transaction. If you don’t have enough the transaction will not go through.
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All inputs minus output.
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This is a very interesting and important question and so please forgive my long answer.
The simple answer in how to increase your privacy is as follows:
A. Use multiple outputs with single or few real output destinations.
B. Some of those outputs could be addressed back to you.
C. Based on the above the real number of the transaction cost can be hidden.
Many people believe that bitcoin is completely anonymous and many people believe that bitcoin is completely traceable. As in many situations in our society the truth lies somewhere in between.
Please keep in mind that most of us love bitcoin not because we are criminals or want to partake in criminal activity. I don’t know about others but the only reason I like bitcoin is the potential it has in keeping my financial activities private. I wouldn’t want my landlord to know when I get a pay increase because he might jack up my rent. I wouldn’t want my next door neighbors who might be criminals to know how much bitcoin I have because they might rob me or even murder me for my bitcoin. There are many reasons and most of you get it. Unfortunately, there are many transaction surveillance companies dedicated in spying on bitcoin users and sell their data to any governments, corporations and individuals willing to pay for their services. Granted, it’s not an easy process and takes time, money and ingenuity but definitely achievable. One of the methods they use to trace transactions is by the use of the KYC requirement that most people have to go through in order to purchase bitcoins from various exchanges. Yes you can do items A,B,C from above but if an organization whose sole purpose is to spy on your bitcoin transaction is after you they will most likely than not break your privacy. Hopefully with the advent of the lighting network and future advancements the bitcoin network will prevail as the ultimate private “internet of money”.
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haaaaaa…Thank you dear Fabrice for the clarification that I will correct in my notes! Merci encore car je n’avais pas compris ce detail. Everything seems clearer. Best regards! fred
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1.UTXO’s are the Bitcoins you have earlier received, and thus your balance which you have available to send.
2. Your wallet will sum up all your UTXO’s to proceed with the transaction. The sum must be large enough to cover for both the transaction and the fee. The “change” will be sent back.
3, The wallet will choose a recommended fee in order to process the transaction within reasonable time.The input for the total transaction is the same as the fee+ the output.
4. You can send Bitcoins back to address’s you yourself own.
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- Describe what Unspent Transaction Outputs (UTXO) are.
The balance of the wallet. - What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? The tx would fail. One of the very things that make bitcoin secure.
- How would a bitcoin wallet specify the transaction fee when creating a transaction?
If wallet has customization to increase or decrease fees then u can that way but other wallets will calculate the fees by most reasonable price for speed. - How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? using multiple addresses.
- UTXOs are unspent outputs of your previous transactions, like change if you like.
- If you do not have a single UTXO that is large enough to cover a transaction, your wallet will combine other UTXOs you have to cover the transaction. If that is not possible, it will decline the transaction.
3)Bitcoin wallet calculates the transaction fees by deducting it from the remaining input of the transaction. - Generate new addresses, especially the outputs, so that it is hard to tell which output goes back to the sender.
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If you have more smaller utxo’s available, you can combine them by using more inputs to cover the transaction. If the sum of all your utxo’s are still not enough to cover the amount, the transaction will fail to broadcast
No need to correct your homework. As long you understand it now. Homework is just to force students to think deeper and summarize the knowledge. Otherwise you would forget it more quickly. This homework is not graded!
If you have questions, tag me, then I can notice it more quickly among all other homework.
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- UTXOs are the outputs of transactions, meaning that they represent the amount of Bitcoins that are assigned to each wallet after the transaction is complete. Then, once further transactions involving such wallets happen, the former UTXOs become inputs for the new transaction.
- If you don’t have a single big enough UTXO assigned to your wallet to cover an expense, and if you have other previous UTXOs associated with it, the transaction will take as inputs as many UTXOs as needed to have an input amount sufficiently large to cover the transaction. Then, the total amount that is given for the transaction as input is divided in order to cover the expense, transaction fees and the to return the remaining amount (if any) to the sender.
- Wallets usually calculate fees basing on the average fees that are currently being transferred on other transactions in the Blockchain. However, some wallets allow the owner to decide the amount of transaction fees to be transferred.
- It would be possible to increase transaction’s privacy by assigning more inputs and outputs to the transaction, so that it would become difficult to recognize which parts of the transaction are going to be sent to others for the expense and which parts are going back to the sender.
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UTXO’s are transaction outputs that are not yet linked to a transaction input. This is basically the way Bitcoin keeps “account balances” by adding up all the UTXO’s coming to a private key.
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If you don’t have a single UTXO that is large enough for a transaction your wallet will add UTXO’s until it gets more than the amount needed and then send the remainder back to your wallet as a separate UTXO.
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Transaction fee is calculated by taking the transaction minus the amount coming back to you.
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Transaction inputs and outputs can increase privacy by adding more inputs or outputs to the transaction to mask which output is the actual transaction vs. which outputs are just coming back to yourself.
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- UXTO is an unspent transaction output
2.the transaction won be valid, not accepted by the miners in blockchain. - input = outputs + transaction fee
4.By sending the output to a different address or wallet.
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Describe what Unspent Transaction Outputs (UTXO) are.
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It is an unspent output transaction the result from a previous bitcoin input transaction(s) that a user can spend in the future. -
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
Ans.
The transaction would be denied by your wallet due to its internal calculation of what you are able to spend. -
How would a bitcoin wallet specify the transaction fee when creating a transaction?
Ans.
This would normally be determined by subtracting the inputs from the outputs and the difference being the transaction fee. -
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Ans.
Inherent privacy is built into the system as there is no way to determine relationships between inputs and outputs giving automatic anonymity to a large degree.
- Unspent outputs from previous transactions
- Transaction is declined and not validated
- Inputs = Outputs + TX fee
Fee is deducted from the UTXO transaction - Use different addresses for each transaction makes it complicated in knowing who owns the wallet
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- Unspent transaction output. BTC sent to you (input) that you have not spent yet.
- Your transaction would be denied by the nodes.
- It is automatically specified for you, based on previous transaction which reflect the fastest transaction to the block chain.
- Generating multiple addresses
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UTXO’s are unspent transaction outputs, meaning that they are amounts received from previous transactions.
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If you do not have a single UTXO that is large enough for a single transaction your wallet will draw on multiple UTXO’s. If multiple UTXO’s are not available for your wallet to draw from your transaction will be rejected.
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A bitcoin wallet can specify a transaction fee by looking at the leftover inputs, and subtracting all outputs in the transaction. The wallet can also look at congestion on the network to help determine a fee that will complete the transaction in a satisfactory amount of time. Some wallets also allow the user to specify the transaction fee themselves, which can dramatically affect the amount of time the transaction takes to be recognized by the network.
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The notion of transaction inputs and outputs can increase privacy in your transactions because you can output to multiple addresses which are not attached to anyones actual name. Individuals can also have multiple anonymous wallet addresses, which can increase privacy.
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Q1A. UTXO is the balance of the wallet from inputs v the output and transaction fee (How much Bitcoin you have).
Q2A. It would calculate any other UTXO that you have and complete the transaction if you have enough in total to do so, or not if you didn’t.
Q3A. Fees are set by the network and miner consensus on what is a fair price.
Q4A. Use multiple addresses.
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- Describe what Unspent Transaction Outputs (UTXO) are.
UTXO is unspent transactions from transactions which come from inputs. Basically someone sent you a set number of bitcoins into a transaction and it has not been spent by you yet. - 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 a single UTXO that is large enough, it pulls from another input to cover for the remaining. If those 2 inputs are larger than the transaction, then the remaining is sent back to you minus the miner fee. - How would a bitcoin wallet specify the transaction fee when creating a transaction?
The transaction fee is basically: Input=Output-Transaction fee. The lower the transaction fee, the less likely a miner will pick it up to place onto the network. The higher the transaction fee, the more likely a miner will pick it up to place onto the network. - How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? You could basically send your inputs to multiple wallets that you control (basically yourself) and pay a fee to the miner.
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1/ Describe what Unspent Transaction Outputs ( UTXOs ) are.
UTXOs, can be used to be spent as an input in another transaction.
2/ What would happen if you don´t have any single UTXO that is large enough to cover for your transaction.?
The transaction would be invalidated.
3/ How would a bitcoin wallet specify the transaction fee when creating a transaction.?
A good bitcoin wallet would include the transaction fees from the miner, keeping in mind the miner will prioritize transactions that offer higher fees, for quicker confirmation, transactions fees are higher
if you want speed pay higher fees, if you can wait, pay less fees.
4/ How could you use the notion of transaction inputs and outputs to increase privacy in your transaction.?
By creating new addresses for change, ( that you own, or not ) to increase privacy in Transactions.
- UTXOs are a set of transactions that log all associated inputs and outputs. Inputs are outputs from a previous transaction and outputs are inputs to a future transaction. Inputs must equal outputs.
- The transaction will be denied. A node or nodes will verify that input UTXOs are not large enough to satisfy the output requested.
- The bitcoin wallet will look at the network and see what the fees are. In some cases you have options. Faster transactions have higher fees.
- Send to multiple recipients. You could be one or more of those recipients.
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