Homework on Bitcoin Transactions and UTXO - Questions

[belinox]

1. UTXO are all the transaction outputs that a wallet has. The sum of UTXOs basically represent the balance of a wallet.
2. Multiple UTXOs can be used as input to cover for a transaction.
3. By checking the average cost of fee of previous transactions to guarantee that that transaction would be mined.
4. By using multiple inputs and outputs together it is hard to track where funds are moving from along the chain.

[Maki]

@Matty_G

The transaction would not be verified and therefore remain unprocessed due to insufficient funds

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.

[Jonesy]

1. Describe what unspent transactions outputs (UTXO) are.
   (UXTO) is the unspent output from 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 not proceed on the network.

3. How would a Bitcoin wallet specify the transaction fee when creating a transaction?
   The Bitcoin chain block will examine the level of activity and provide you with a recommended transaction fee for the amount you have stipulated in sending to another address. You can also speed up the transaction by increasing the higher than average fee which entices the miners to process the transaction more quickly.

4. How would you use the notion of transaction inputs and outputs to increase privacy in your transaction.
   By using the different wallet generated addresses for every new transaction.

[ErrorCode]

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

Unspent transaction outputs (UTXOs) are the unspent transactions balances attributed to your wallet and recorded on the blockchain. These are balances that your private key control and can create the next spend transaction.

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

The wallet will search the blockchain for UTXOs associated to your wallet and combine sufficient UTXOs to create the necessary fund balance to complete the transaction. Total input UTXOs must equal total output UTXOs (minus fees). If you have insufficient funds the transaction will no proceed.

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

Miners receive the transaction fee for completing the transaction on the blockchain. Miners select UTXOs which provide the highest level of reward (transaction fee). The fee is based on the current fees for the network. The wallet automatically checks for fees associated with similar transactions and provides you with a transaction fee which incentives the miners to complete the transaction and record on the blockchain.

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

The UTXO that a private key can controlled is not known to others. When a transaction is generated from an address that your private key control, you can send any unspent UTXO to another address that your private key controls so it appears not to be associated to the sending address. Anyone observing the transaction will not easily know it is the same wallet. Some wallets will create new addresses automatically and give you the option to choose which address to use.

[Nicco_Frydensdal]

Homework on Bitcoin Transactions and UTXO - Questions

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

UTXO is a form of digital balance that have been send to a wallet and is pending in the blockchain to be moved elsewhere.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   you world need to use several UTXO That would fit the amount of a transaction. (lets say you need to send 1 BTC to another wallet and you have two UTXO one on 0.5 and another on 0.7 you would need to send both of them. lets say without fees so by sending 1 btc. you would still have 0.2 that you would need to send to yourself.

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

the wallet would check other transactions that have accord in the pass and take the avg of does transactions.
why?
miners will only take the better transactions fees to make a new block.
Input - output = fee

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   via using several output ports because for every transaction you send it will change the address and now that the wallet has no linked identity i would be difficult to track where it originally came from not saying that it isn’t impossible but it would help.

[Ishiki]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   Unspent Transaction outputs are transactions that are available to you to use as input in order to construct new outputs. Any previous input that comes into your wallet is now a UTXO. All UTXOs added together make up your balance. In reality, there is no balance, but the wallet can look at all UTXOs to form a balance that you can see.

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 be validated and therefor fail and be sent back to the receiver. Nodes will ensure by checking against the ledger that you have the needed UTXOs to form the transaction. The input has to be equal to the output and therefor they would realize that there is not enough input.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction? The wallet checks previous transaction fees on the blockchain to estimate a trasaction fee that will be included in a block in a reasonable timeframe. If the blockchain is congested, fees may be higher. You can however change the fee yourself in some wallets, which may result in you not being included in a block and therefor the transaction would fail, or it may result in you being included in a block at a much later time than the average block confirmation time.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? You could split the output by multiple addresses including wallets owned by you, essentially disguising ownership.

[eshutola]

1. Each bitcoin transaction is made of 1 or more inputs and 1 or more outputs. Unspent transaction outputs are transactions sent to another wallet, who hasn’t spent the funds as yet. A wallet’s balance is the sum of all it’s UTXO’s. When transactions are made, it is the UTXO’s that cover the transaction. When funds are spent, the UTXO’s turns to Spent Transaction Outputs, then Inputs.
2. If a single UTXO isn’t large enough, another UTXO will be added to cover the transaction. If the total sum of UTXO isn’t large enough to send the transaction, it will fail.
3. Transaction can be calculated by subtracting output from input
4. Because transactions can consist of a group of input and outputs, it’s hard to pinpoint which addresses belong to you. Also there isn’t any identification attached to addresses unless it’s through a centralized exchange with KYC.

[ruthenhet]

@ivan

Homework on Bitcoin Transactions and UTXO - Questions

1. Describe what Unspent Transaction Outputs (UTXO) are.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?

1. Unspent transaction is the balance that is left over in your wallet.

2. The transaction won’t go through successfully.

3. The difference between input and output.

4. Different addresses from outputs can receive from one input.

[Maki]

@ruthenhet

The transaction won’t go through successfully.

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.

[noro377]

1 the balance of all transactions in your wallet

2 transaction would be declined

3 the fee is calculated from the remainder of all inputs minus the outputs of a transaction

4 using different addresses for every new transaction

[iequere]

1. UTXO’s are actually the things we ignorantly refer to as our wallet balance. Since wallets do not hold coins but rather query the blockchain network for unspent transactions and sums them all up, UTXO’s can then be defined as the output of other transactions which were directed as inputs for transactions associated with our private keys.

2. Such a transaction will not be verified on the network and will never happen.

3. It will specify it as a portion of the UTXO’s on the input end of the transaction such that the summation of the outputs of the transaction and the fee equates the UTXO value input.

4. Make use of different addresses.

[spicydumpling]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   Unspent Transaction Outputs (UTXOs) are the transactions that were sent to your private key. They’re essentially your available balance. It doesn’t mean that you’re holding the coins though. Your private key is simply the next party that can send the transaction further.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   The transaction would fail.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   It would take the last couple of transaction fees into account and calculate a value that would get your transaction successfully into the blockchain.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   You can only see the wallet adress. It is possible that someone might be sending money to himself but that wouldn’t be visible on the blockchain explorer.

[zanbrojen]

1. basically your balance of unspent bitcoin

2. your wallet would calculate your utxo’s and complete your TX if you had enough.

3. It doesn’t specify the fee it just takes it.

4. The outputs are all encrypted addresses to ensure anonymity.

[Paval25]

1. A UTXO is an output amount (represented by an address) from a prior transaction that has not yet been spent by the recipient in a subsequent transaction.

2. Your wallet will find a combination of smaller UTXOs that match the output value of the transaction plus the associated fee.

3. A bitcoin wallet would analyse the blockchain to propose a fee that should ensure that your transaction gets into the blockchain reasonably fast. Some wallets will give the owner a choice from a list of proposed fees. Miners would be less likely to prioritize your transaction if the fee is not competitive with other available transactions in the mempool.

4. Consider using different receiving addresses for the storage of each of your own wallet inputs.

[Ray3]

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

The balance left from the previous transaction

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

Wallet will calculate all the UTXO and if the sum is enough to pay, it will execute the transaction

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

The fee is the remaining inputs minus the output. Also the fee for a single input/output transaction is less compared to a transaction with more inputs and outputs.

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

Uses different address for inputs and outputs

[wataru]

1. Transactions of an amount that were sent and not yet spent.
2. Would fail because output does not equal input, which is the sum of all UTXOs of the address that’s trying to send.
3. Input(s) minus the output(s).
4. Using multiple addresses that you control.

[John_Nutter]

1. Describe what Unspent Transaction Outputs (UTXO) are. Unspent UTXO are the balance in your account /unused transactions received.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? If all UTXO in a wallet wasn’t enough to cover your transaction it would be invalid/or if your UTXO 's were all lower than your transaction then it would take as many as it need to cover it and the balance of the one left to make enough can be sent back to you wallet.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction? fees or gas is paid on speed you choose for transaction. input -output = fee.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? Since no one knows who holds the keys to your wallet privacy is all ready there, also one can have a wallet off line

[Dale23]

1. UTXOs define how much money (BTC) you have in your wallet. BTC “Coins” do not exist but you can add up your UTXOs to know how much money (BTC) you own. UTXO is the output of a transaction that has not been spent.
2. If you don’t have a single UTXO large enough, your wallet would combine as many UTXOs as needed to cover the transaction. If the sum of all of your UTXOs was not, enough then you would have insufficient funds.
3. The transaction fee is the difference between the inputs and outputs. Your wallet suggests appropriate fees based on the activity on the block chain. Sometime your wallet will give you options for fee amounts. The larger the fee, the sooner a miner will work on your transaction.
4. Transaction input and outputs are not linked to accounts on the blockchain. They are amounts on the blockchain that contain a private key that no one knows except the owner of the private key.

[Mcourtney]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXOs are the outputs of a transaction which haven’t been spent yet.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? Your wallet would utilize other UTXOs, if there still wasn’t enough to cover the transaction then it will decline.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction? Your wallet would check other transaction fees on the blockchain and suggest fees based on this information.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? By using different addresses that you own.

[Marine777]

1. UTXO are the outputs that can and will be spent as Inputs for future transactions, these are basically the wallet balance after it communicates with the blockchain to determine how many UTXO you can spend.

2. The transaction would be failed or you need a lower fee which will result in a slower transaction. Another option is for someone to send you more coins to cover your transaction.

3. Bitcoin wallets communicate with the blockchain and gives you an estimation of a transaction fee based on transaction fees that are currently occurring, and these transaction fees depend on many factors like the congestion of the network and the network difficulty.

4. Basically an output can be sent to a different wallet than the original receiver’s wallet, then this UTXO is now an input and can be sent to the original receiver’s wallet, making this transaction more private by sending it to multiple wallets, that’s one way of increasing privacy.