Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#5287

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    The balance of any transactions your wallet has received.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? The wallet would use other UTXO’s available in your wallet and send back a reaming balance as change. If no other UTXO’s available then the transaction would become invalid or rejected.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction? Inputs = outputs + transaction fees or inputs-outputs= transaction fees

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? Using all UTXO’s for a transaction you could conceivably mask where a spend starts and where the remainder balance goes. Additionally ownership of a given public key is impossible to verify.

1 Like
#5288
  1. Unspent transaction outputs is basically your balance of BTC
  2. Your wallet will send the amount to your first output then output the rest back to your wallet
  3. The wallet scans the blockchain and get the best average transaction fee
  4. Use a blockchain that has encryption on its inputs and outputs
1 Like
#5289

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    This is an input I have received from someone, but I still have to spend it / send it to another wallet.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    If one of my UTXOs does not have enough value to cover the transaction, the wallet will combine it with another UTXO so that it cover the value. If all of the UTXOs in my wallet do not cover the value of the transaction then it will not be executed and the nodes in the system will check my balance on the blockchain and send back info to the wallet that this transaction cannot be executed.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The Bitcoin wallet will specify a transaction fee according to the current value of transactions which is estimated according to the amount of transactions in the blockchain at the moment of the transaction.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    I would try always sending myself some amount of BTC together with the other output, so that it is a bit more difficult to track what amounts are sent where.

1 Like
#5290

  1. UTXOs - unspent transaction outputs; they are basically outputs from other transactions associated with your private key that your wallet tracks and spends them by inputting them into another transaction where they become outputs to the recipient wallet.

  2. Your wallet tracks and sums up the value of UTXOs linked to your private key. This generates your balance, there mustn’t be a single large enough UTXO to cover your transaction.

3.Bitcoin wallets don’t specify transaction fees but it can be calculated by simply subtracting the value of output from the value of the input. i.e. Input = Output + Tranx fee.

4.Transaction inputs and outputs comprises of a bunch of addresses and they don’t specify where they came from so there’s no way of knowing who sent or who is receiving a transaction.

1 Like
#5291

  1. UTXO are the transactions you receive in your wallets not yet spent. They are the wallet’s balance.

  2. You can use two or more UTXO to cover your output. The balance can go back to your own address.

  3. You can either specify your own transaction fee or the wallet will inform you how much the transaction fee is in order to have a successful transaction. It can also be calculated based on the differnece between the inputs and the outputs.

4.To hide the identity of the receiver, you can create many addresses in the outputs.

1 Like
#5292

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are amount of BTC locked to our wallet available to be send/spend. Blockchain track UTXOs and thru query from our wallet, gives us information which UTXOs our private key can spend.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    If a single UTXO is not enough to cover for specific transaction we can sum up 2 or more UTXOs to execute TX, but if our balance is not large enough, TX will be rejected by nodes.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Bitcoin wallet would check on blockchain previous transactions and propose best fee for fastest TX. That fee would be shown as difference between input and output ( fee= input - output), In some wallets you can chose fee you prefer.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You can create TX using multiple addresses in input and output, so from outside, one can only guess what goes where

1 Like
#5293

  1. UTXOs are unspent outputs in your wallet

  2. Your wallet adds all UTXOs and if you have sufficient bitcoin it will do the transaction

  3. Inputs = Outputs + Transaction fees.
    Your wallet calculates the fees

  4. Its almost impossible to figure out who did the transactions (inputs / outputs) as all you see is an address.

1 Like
#5294

  1. UTXO’s are the fractional part of a transaction. The sum of output plus fee cannot be more than input.

  2. If you don’t have any single UTXO that is large enough to cover transaction the transaction will be cancelled.

  3. A wallet tracks what UTXOs your private keys can spend. The wallet constructs the transaction for you. Decides which inputs to choose and which outputs to create. Calculates the fee- gives you what fees the best and what fee get you in the blockchain the fastest.

  4. It is impossible to know who owns the addresses of recipients. You can use multiple addresses for the outputs. If you sent to yourself using any of those addresses that was used for an output previously, it could be used for input.

1 Like
#5295

Thank you for clearing that up Maki :slight_smile:

#5296

1. Describe what Unspent Transaction Outputs (UTXO) are.
In the Bitcoin network, a UTXO is the amount that is transferred to a Bitcoin address during a transaction that can be consumed in future transactions.

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.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
The transaction fee can be derived from the difference between the sum of total inputs and the sum of total outputs.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
The UTXO model does not directly inscribe wallet addresses onto the blockchain but has a unique address for each UTXO. An observer of the blockchain will thus find it difficult to ascertain which UTXOs belong to which users.

#5297
  1. UTXO’s are synonymous to the balance of a private key.
  2. The transaction will not happen either because our wallet counted a UTXO balance below the needed threshold, or the consensus algorithm classifies it as invalid.
  3. A Bitcoin wallet will pick a transaction fee that will get miners to add the transaction to the blockchain fairly quickly
  4. Since the inputs and outputs are just addresses people cannot see which of the outputs is money being sent back to us, and where the other funds are being sent to.
1 Like
#5298
  1. UTXO are the inputs in a transaction before spending.
  2. If I don’t have the balance I can’t buy anything, but If i have many UTXO, and in sum give me more than I want to spend, then I can use it for a new transaction.
  3. It’s the difference between the input and the output, that gives the fee.
  4. By using different addresses, as many as possible.
1 Like
#5299

1 - Describe what Unspent Transaction Outputs (UTXO) are.
In a process of the transaction the UTXO are outputs (person A is the owner) waiting for being transferred to another wallet (if the transaction is accepted now the person B is the new owner).

2 - What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
If I don’t have enough sum of UTXO then the network (nodes) will refuse the transaction. If I have enough sum of UTXO then the transaction will be accepted.

3 - How would a bitcoin wallet specify the transaction fee when creating a transaction?
The wallet will read the blockchain and will choose the most advantage one for this transaction. The fee is the difference between input and output. The fee goes to the miners.

4 - How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
To do so the owner should have more wallets.

1 Like
#5300
  1. their sum is my balance, bitcoins from transaction outputs sent to me
  2. the transaction is invalid, or I need to use more then 1 UTXO to cover that transaction
  3. it is the difference between the input and the output sums
  4. I see no need for this…
#5301

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.

#5302

why do you think that?

#5303
  1. The transaction outputs you can spend.
  2. Your wallets checks previous transaction and blockchain verifies the funds you are trying to spend. Not enough funds, no transaction.
    3.The transaction fee is total input minus total outputs. Wallet regularly checks the blockchain and will see previous fess and pick which one gets you into the blockchain the fastest.
  3. Different public wallets not being tied to your identity.
1 Like
#5304

1. Describe what Unspent Transaction Outputs (UTXO) are.
UTXOs are the equivalent of the change one would receive after a cash transaction in a retail setting.

2. What would happen if you don’t have any single UTXO that is large enough to cover your transaction?
The transaction would not be accepted to the blockchain due to a lack of funds.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
Depending on the wallet’s interface, the customer can choose the custom fees option. If the custom fees are too low, the miner most likely ignores the transaction.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Services such as mixing increase transaction inputs and outputs resulting in near-perfect anonymous transactions.

2 Likes
#5305

  1. Received Tx which havent been spent yet.

  2. Doesnt matter as long as all inputs equal the output plus Tx fee.

  3. It looks at the blockchain and previous fees to allocate one which makes sure the Tx is done in a timely manner.

  4. Having several outputs and sending back to self.

2 Likes
#5306

Describe what Unspent Transaction Outputs (UTXO) are
Every Tx has atleast one input and one output. This output becomes spendable output for the subsequent tx. So, here nodes in the network track spendable transaction outputs, or outputs that have not yet been used in another, subsequent transaction. These are known as unspent transaction outputs (UTXOs).

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

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

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
By using a different address every time when we are on receiving side.

1 Like