Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#5427

ll the spendable outputs for a given address available to be used in new transactions.

When you send BTC to another person your wallet software will look for one or more unspent outputs and use them as inputs to the recipient. If a UTXO isn’t large enough to satisfy the demand of the input amount, then the wallet will use a second, a third, and so on until the total is greater than or equal to the amount you are sending.

The Bitcoin Wallet will calculate the appropriate fee for your transaction (Input = Output + fee), so you don’t need to worry about calculating your own fees.

Creating new addresses for every transaction.

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#5428
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    A) UTXO is your balance after receiving the inputs.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    A)The transcation will get declined
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    A)The difference between the input and output
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
#5429

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.

#5430

What happen to number 4 answer🤔

#5431
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXO’s are inputs that your wallet has received that have yet to be spent.

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

You would combine multiple UTXO’s to cover the transaction and if the combination of UTXO’s is larger than your transaction, you simply send the balance of the spent transaction back to yourself.

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

The wallet would calculate the TX fee by taking the total input and subtracting it from the total output resulting in the TX fee which would be determined automatically in most cases by the wallet having checked the blockchain and using the last TX fee that would allow you to be appended to the blockchain in a reasonable timeframe.

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

By using multiple outputs when conducting a transaction originating from one input which could have some of the output transactions being resent to separate inputs or back to the originating input controlled by the sender resulting in privacy as no one knows except the private key holder because there is no balance stored on the blockchain.

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#5432

Best answer. 4th one is spot on.

#5433

Q.1.Describe what Unspent Transaction Outputs (UTXO) are.
A.1.blockchains available for use in the wallet

Q.2.What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
A.2.the wallet would output a “denied” status of the pending transaction

Q.3.How would a bitcoin wallet specify the transaction fee when creating a transaction?
A.3.The wallets bases on mining fee of the blockchain Input of transaction minus output of the transactions

Q.4.How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
A.4. From your wallet you specify how much to send and where to send, the wallet will figure out the best route
to the receiver.

#5434

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.

#5435
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are the inputs of the transaction that you are able to spend.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Your wallet would combine UTXOs to get enough BTC to send for the transaction output
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It takes output minus input
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    By using different addresses
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#5436
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • The total Unspent transactions signed to your puplic-key/wallet-addres, are actually your wallet balance. Bitcoins you have to spent.
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • It will add up 2 or more UTXOs to cover the total transaction. Spent + fees.
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • It would be specified by Fees = (The transaction total - the UTXO total)
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • Have extra addresses, and always split your transaction.
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#5437

These are TXNs left unspent after someone completes a TXN, similar to the change someone receives after conducting a cash TXN at the store.

You will most likely get a notification that you have to add more funds in order to cover the TXN

Either the wallet calculates the fee for the user or the wallet lets the user manually select the appropriate fee.

Use a new address

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#5438

1. Describe what Unspent Transaction Outputs (UTXO) are.
UTXOs for a wallet are outputs from several other transactions that have been sent to the wallet in question but have not been spent i.e. have not been used as inputs to any other transactions from this wallet.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
The wallet will figure out the difference between the amount you are spending and the total amount of UTXOs that you have (i.e. the total amount that you have to spend) and construct the transaction in such a way that the amount of btc you want to send is sent and the remaining amount goes back as another UTXO to you (back to the same wallet).

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
The btc wallet software queries the blockchain and automatically chooses a fee that will get your transaction confirmed in a reasonable amount of time.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Because the bitcoin network only uses the wallet address to specify where transaction inputs are coming from and where transaction outputs are going to, it becomes impossible to identify from whom exactly the wallet addresses belong to, hence preserving the privacy of the individuals transacting on the network. Therefore, by becoming a participant on the btc network, you can leverage this privacy preserving / anonymity feature and increase privacy in your transaction(s) :slight_smile:

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#5439
  1. The UTXO is the INPUT received at the time a transaction is made.
    2)The UTXO will be added
    3)The transaction fee is calculated based on the subtraction of the input from the output, as the blockchain is in constant need to remove the UTXO
    4)When you request a transaction you can have different outputs, and one of those outputs could be you.
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#5440

A UTXO is the right that a Wallet has to spend. The wallet recovers all the Past Tx and the they are added to the total “balance” available. If a wallet doesn´t have any UTXO, the transaction will not proceed, you will have to send more BTC to your address. For the TX fee some wallets may consult the blockchain to see the previous Fees and the congestion of the network, but the essential way TX fees are calculated depend on the Tx size.
For privacy settings I prefer using non-KYC wallets., but it is an interesting question. What I think I would do is to gather all the UTXO´s into a wallet, and after that create a new TX within the same wallet telling I want to change all the Previous UTXOs to One UTXO. This new UTXO will be sent to a new Wallet of your control.

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#5441

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    -They are the outputs of the previous transactions that you have not spend. The change.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    -Transaction declined, need to gather more inputs.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    -It is the difference of the input minus the output.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    -Send/receive to multiple addresses.

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#5442

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.

#5443

  1. UTXO’s are outputs from other wallets into your wallet that can now be used for other transactions.

  2. It will look to find other UTXO’s to complete the transaction

  3. The transaction fee is the difference between the input and output

  4. With the use of multiple addresses you can make it impossible to determine what part of the transaction pays for something and which part comes back to you

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#5444
  1. UTXOs are unspent outputs you receive from transactions.
  2. All UTXOs add together and if the amount is still too large the transaction would be invalid.
  3. A bitcoin wallet specifies the transaction fee by subtracting the outputs from the remainder of all inputs.
  4. You can use the notion of transaction inputs and outputs to use different addresses for each transaction to increase privacy.
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#5445

  1. UTXO’s are Wallet Inputs… UTXO = Transaction Input

  2. If a single (UTXO - Input) is too large to cover transaction the transaction will be Denied.

  3. A Bitcoin Wallet specifies the Transaction Fee by Subtracting (-) the Input from the Output

  4. You could you use the notion of transaction inputs and outputs to increase privacy in your transaction by using Multiple Wallets / Addresses / Hardware Wallet.

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#5446
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO’s are transactions you have received in your wallet and are available to spend.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    UTXO’s would be combined to make up the required total or rejected if the balance is insufficient.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    TX fees are usually suggested based on current and previous fees and the speed at which you would like to execute the TX.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    When the input creates multiple outputs/keys of which one or more may be directed back to the sender it becomes almost impossible to track.
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