Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#5267
  1. For example all tokens amount on my ledger nano x.
  2. The transaction is impossible to finalize.
  3. Wallet is proposing fees. Wallet using database sees previous transactions fees and is picking kind of similar but to be enough fast too.
    4.Privacy can be increased by using few addresses.
#5268

It is not necessary all your UTXOs are added up to make a transaction, but you can use multiple UTXOs as inputs that can cover the new transaction.

#5269

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.

#5270

Thanks Maki. I saw there wasn’t only me with the answer point 2. :slight_smile:

#5271
  1. Describe what Unspent Transaction Outputs (UTXO) are. ==> this is basically signifying how many bitcoin one has in a wallet. All UTXOs are used as inputs in future 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 not happen. It would be rejected by the blockchain.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction? ==> To my understanding it basically depends on how busy the blockchain is (how many transactions are occurring), and how fast you want the transaction to occur. The more busy and the faster you want it to occur the more expensive the fee.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? ==> Perhaps use more than one address to receive outputs and more than one wallet to send bitcoin.
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#5272
  1. UTXO are unspent transactions either you have received from someone else(or yourself) or the crypto you have left over from whenever you send crypto to someone else.
  2. If you don’t have any single UTXO that is large enough to cover for your transaction, the transaction will be declined due to the lack of UTXOs.
  3. The fee will be calculated automatically through the formula: Transaction fees = Input - Output.
  4. The inputs and outputs increase privacy in your transactions by splitting the transaction into several different outputs. With this, no one can tell which is going back to the original sender and which one is going to the receiver.
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#5273

1 Unspent transaction outputs are previous inputs that are sent to a address, where the owner of the private key controlling that specific address can use this UTXO as a new input in a new transaction
2. Then you have to combine several inputs to create an total input at least as large as the combined output
3. The wallet will check the blockchain for previous transactions fees, and propose a fee that will ensure your transaction to be included in the blockchain in reasonable time
4. Use a different address for each receiving transaction to enhance privacy, especially the output so its hard to tell which output goes back to your wallet

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#5274

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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#5275

[quote=“ivan, post:1, topic:8436”]

  • Describe what Unspent Transaction Outputs (UTXO) are.
    Every transaction has an input and outputs. When you receive bitcoin, it will become an output eventually. So those are the bitcoins available for you to spend in a transaction when you want to spend it.

  • What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    You would have to use more than one UTXO in order to cover your transaction.

  • How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It takes into account previous fees in the blockchain and proposes the best available one. Additionally, input = output + fees.

  • How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Since the transactions allow multiple inputs and multiple outputs, these properties are what makes it possible to increase privacy in the transactions.

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#5276

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    The last transactions arriving at a wallet address.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Wallet will aggregate all UTXOs and as long as the summated UTXO is sufficient, will create the transaction, the balance -fee will be returned to your wallet address as change

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It does so by ensuring the output transaction is of the same total value as the UTXOs input. It arrives at a fee itself to ensure the transaction is mined/entered into the new block in a timely fashion.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction
    Because the outputs do not specify which is to another wallet and which returns to the same.

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#5277
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXOs are outputs from a previous transaction that are used as new inputs in the next transaction.

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

Multiple UTXOs would be combined to total an amount large enough to cover for the transaction if possible.

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

The wallet will see what fees are applicable to get the transaction confirmed in a reasonable time, The fee will be the difference between input and output of transaction.

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

We cannot know to whom the Tx is being sent to. It is anonymous and thus increases privacy.

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#5278

  1. UTXO’s are unspent transactions (bitcoin values) that have been sent to your wallet from another address.

  2. They will get merged with another UTXO to make up the full amount, or if there are no other UTXO’s the transaction will be denied.

  3. It would minus UTXO Output from the Input.

  4. By increasing the number of inputs and outputs used.

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#5279

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    They are transactions that you have recieved, but not yet spent.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    All of your UTXOs are summed up, you use the total sum and not just a single UTXO.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The fee is not specified, but implied, since it can be calculated from input - output.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You can have multiple adresses and send some money to yourself.

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#5280

Aww lol thankyou for pointing that out,my bad

#5281

2, transaction will be rejected, unless you had more utxos to complete the amount needed

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#5282
  1. Transactions you have received but have yet to be spent.
  2. The transaction cannot be made if there is insufficient outputs.
  3. The fee is determined by the difference between input and output
  4. If you wanted to make it more difficult for someone to trace, you could send a transaction through multiple outputs for more privacy
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#5283

  1. a utxo is the amount of leftover cryptocurrency change you receive from each transaction.

  2. If you don’t have a single utxo large enough to cover a transaction more than one utxo are combined.

  3. A bitcoin wallet estimates the transaction fee based on previous transactions that will get your processed relatively quickly. The higher the fee to miners the faster the processing time as miners will compete for the highest rewards. Some wallets will allow you to choose to specify the fee and speed yourself.

  4. You can increase privacy by splitting transactions between different addresses owned by yourself.

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#5284

1 - UTXO are the sum of bitcoin you have received that are not spent. Your wallet uses your private key to scan the blockchain to determine this amount. This is your “balance”.

2 - Then the transaction is covered by the sum of your UTXOs (if it’s large enough to cover the transaction). The remaining balance (if any) is also spent, but goes back to you.

3 - It’s scans the blockchain to determine a transaction fee that is high enough to process your transaction in a reasonable time, but not too high.

4 - All transactions that are recorded in the blockchain are using your public key and digital signature, these cannot be reverse engineered to find your private key. That increases privacy.

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#5285
  1. UTXOs are the transactions that are left unspent after someone completes a transaction, similar to the change someone receives after conducting a cash transaction at the store.
  2. Multiple UTXOs can be calculated to cover the new transaction. But if you do not have enough from all the UTXOs then the nodes will not validate it and it would be rejected.
  3. Input minus output.
  4. By having more output addresses.
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#5286
  1. UTXO’s determine your wallet balance.
  2. Multiple UTXO’s would get used and the remaining balance will get sent back to you. If there are not enough UTXO’s to cover the transaction, it would be invalid.
  3. The wallet looks at the blockchain and determines a fee that will get you into the blockchain relatively fast.
  4. Send your outputs to a new address so it is extremely difficult to determine how much is being kept by the original address.
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