Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#522
  1. Describe what Unspent Transaction Outputs (UTXO) are.

These are transactions that you have previously recieved and can spend

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

After your wallet checks on the blockchain your amount of UNTXO and if there’s no one of them which is is large enough to cover your transaction, the transaction won’t be spent.

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

It would check all the previous transactions fees and will propose a value accordingly

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

By having a different Private keys per transaction and because these are not linked it would be really hard to track them down to one identity

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#523

I meant "my personal notes " I wrote on the side … :wink:

#524

  1. UTXOs (unspent transaction outputs) are derived from previous outputs of transactions to your wallet and are effectively your balance of spending power on the blockchain.

  2. Provided one has sufficient balance, one’s wallet would construct a transaction made up of multiple UXTOs, including a fee based on speed, as well as change for your wallet. In the case of insufficient balance, the transaction will simply be ignored.

3.This can be set manually, but many wallets automatically calculate a fee that would be both attractive to miners and provide the most benefit to the sender.

  1. The opaque nature of UTXO transactions make them very hard to surveil.
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#525
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    what is left in your balance after a transfer is done
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? there would be no transaction
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    based on the difficulty of blockchain I guess
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? use different input address
#526

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    a) An amount within a wallet not yet spent or left over balance

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

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    a) It’s the difference between the input and output. The wallet searches the network and figures out the transaction fee

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    a) You can create many different addresses as inputs and outputs. Example: Input A - Output A, B, C or Input A, B & C - Output A, D, E

#527

  1. UTXO’s are the outputs of a previous transactions. The sum of the BTC in all UTXO’s a private key has the right to spend, is the sum of funds available in that wallet.
    UTXO’s are eventually use for new transactions, and the output from those are turned into new UTXO’s.

  2. Your wallet would use the funds in several UTXO’s to make the payment. If that is not possible, you are screwed and you need to get more BTC.

  3. Transaction fee = sum of Inputs - sum of outputs.

  4. As long as your addresses are not linked to your real identity, this is completely private already. But you can also have one input create multiple outputs, to increase your privacy.

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#528

HI,
1, It’s all transactions received which are still with the specific private key. Wallet balance is sum of UTXO’s. UTXO is spent when I create transaction.
2, Transaction than use more UTXO’s until it’s the same/more than output we want. If UTXO’s together exceeds output we want, one UTXO is split to fit our output and rest is sent back to our wallet ( within same transaction). If there is not enough of UTXO’S to be same/exceed output than transactions are invalid.
3, In bitcoin we pay for byte. More bytes in our transactions = more fees paid. How high or low fees depend on how fast you want your transaction to be validated/added to the blockchain and high in demand overall. We pay miners to add a transaction to the blockchain. They will prioritize transactions with higher fees. The wallet will ask blockchain what were previous and what are actually fees paid on avg. to be added to the next block.
If I want to know how big fee I paid ( if a wallet does not show it) > fee = input- output
4, Because we do not know who is owner of the address until someone says it’s him and because we can use as many outputs we want in a transaction- nobody knows if we just sent btc to our different wallet or to someone else. We can have as many wallets ( private keys) as we want… Also, we can but as many outputs ( even our own wallet) in one transaction as we want ( if we can pay fees…).

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#529

  1. its basically an input…you can have several…these inputs ate UTXO which is unspent transactions.

  2. If you have several UTXO they will total to give you x amount lets say BTC. If your total of several UTXO are still too small for the transaction…the transaction will be declined.

  3. The difference between the inputs and outputs.

  4. You can send many transactions to other btc addresses you own therefore nobody knows how many wallets you have or BTC you have.

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#530
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO’s are the unspent funds available in a bitcoin wallet.
  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 declined if the UTXO is not enough.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The wallet decides the transaction fee when creating a transaction by substracting the input from the output.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? By always using different outputs.
#531

You can always use more smaller utxo’s in your inputs. Only if the sum of all your utxo’s doesn’t cover the amount, the transaction will fail

#532

You can always use more smaller utxo’s in your inputs. Only if the sum of all your utxo’s doesn’t cover the amount, the transaction will fail

#533

You can always use more smaller utxo’s in your inputs. Only if the sum of all your utxo’s doesn’t cover the amount, the transaction will fail

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#534

You can always use more smaller utxo’s in your inputs. Only if the sum of all your utxo’s doesn’t cover the amount, the transaction will fail

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#535
  1. UTXO are spent transactions that have been sent to you that you have not spent.
  2. This would be rejected by your wallet
    3.The wallet looks at previous transactions and decides what the fee shall be so as to quickly get the transaction on to a block.
  3. There are multiple inputs and out puts so it cannot be sure if you have sent money back to your self or not.
#536
  • Describe what Unspent Transaction Outputs (UTXO) are. They are the amount of bitcoins that i have received and not spent, so my available balance.
  • What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? My wallet will add all my UTXO´s and if they are enough the transaction can happen, if not, it can´t.
  • How would a bitcoin wallet specify the transaction fee when creating a transaction? it calculates the best fee based on previous transactions on the blockchain.
  • How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    By generating several different addresses and using them when sending the money back , it makes it harder to track
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#537

[quote=“ivan, post:1, topic:8436, full:true”]
Homework on Bitcoin Transactions and UTXO - Questions

1. Describe what Unspent Transaction Outputs (UTXO) are. To make it simple, it’s an output that you have receive as an Input, that are waiting that you give direction ( create transaction).
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? The protocol will use all of your available UTXO’S and calculate the SUMS of it, will send to the receiver they amount that you have fix + the fees and will send back to you the available balance. The balance that will rest, will be like your new UTXO
3. How would a bitcoin wallet specify the transaction fee when creating a transaction? SImple as **Input - Output = Fees ( Can have more than 1 Output if the SUMS are not even Input vs Output)= Fees
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? Create multiple output that some of it will turn back as a new Input …
[/quote]…

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#538
  1. UTXOs are unspent outputs your wallet gets when receiving Bitcoin and keeps track of to make up your balance.
  2. Your wallet would sum up more than one UTXO to make up for the bigger transaction.
  3. All Inputs minus outputs to specify the transaction fee
  4. You can increase the outputs to make tracing the transaction more difficult
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#539
  1. Describe what Unspent Transaction Outputs (UTXO) are.

Unspent Transaction Outputs are received transactions that haven’t been used to send new transactions yet. The wallet keeps track of these UTXOs until they are used.

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

If there is not single UTXO large enough to cover the transaction then many UTXOs will be used to construct the transaction. If there are not multiple UTXOs availale, then the transaction will not be constructed.

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

The bitcoin wallet will specify the transaction fee by subtracting the outgoing payments from the UXTOs used to create the transaction, the difference will be the transaction fee.

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

You can increase privacy of your transactions by having control over multiple bitcoin addresses and breaking single inputs into multiple outputs.

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#540

  1. UXTOs are outputs of previous transactions to a specified wallet. These are available to the wallet owner to produce new transactions.

  2. If one UTXO is not sufficient for a requested transaction, multiple UTXOs will be combined as inputs, and any remainder, minus fees, will be returned to the sender.

  3. Bitcoin transaction fees are the difference between all inputs minus all outputs, so if the combined inputs are greater than the required output, you would specify how much of the difference is returned, and any remainder will be issued as the fee.

  4. Privacy is increased in the UTXO model because a single user can have multiple wallets and send between wallets. It is also impossible to tie which UTXO hits which wallet when multiple inputs and outputs are present on a single transaction.

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#541

1.UTXOs are Unspent Transaction Outputs, i.e. unspent outputs of previous transactions that if summed up will give the balance of your wallet.
2. The transaction will occur if the sum of all the UTXOs is large enough to cover the transaction, otherwise the transaction will not occur.
3. The fee will be calculated with the formula: Fee = Input - Output and the wallet will calculate a fee that will broadcast the transaction to the blockchain reasonably fast.
4. You can increase your privacy by constantly changing the public address (i.e. generating new public keys) every time you are the receiver in a transaction, so that it is hard to know which output goes back to the sender.

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