Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#5527

  1. Unspent UTXOs is what we know as the wallet balance.

  2. It will sum up more UTXOs. If there is a remainder of the balance will be credited to your account after deduction of transaction fees. If there is no sum of multiple UTXOs that make up larger output, the transaction is invalid.

  3. The blockchain checks the transaction input and output and works out the fee to be the difference between the two. UTXO - UTX input = fee.

  4. This is provided by the nature of bitcoin transactions as output can be sent to multiple channels as well to same input channel. No one knows except the private key owner.

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#5528

Homework - Transactions and UTXO’s

  1. Describe what Unspent Transaction Outputs are?

The amount of digital currency remaining after a cc tx is executed

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

Your input would have two amounts going in which would add up to, or be greater than, the value of the tx - the tx amount would be paid and the remaining amount return to you

If your UTXO’s amounts do not add up to the tx amount then the tx will be deemed invalid

  1. How would a BTC wallet specify the tx fee when creating a tx?

The bitcoin wallet specifies the transaction fee when creating a transaction by substracting the input from the output.

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

Anonymity is provided by the nature of bitcoin transactions as output can be sent to multiple channels as well to same input channel. No one knows except the private key owner

Cheers :woman_cartwheeling:

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#5529
  1. The balance of incoming transactions to the wallet
  2. Smaller UTXO will be added to meet the size transaction
  3. input minus output
  4. By making more transactions and using different addresses to spend your UTXO:s.
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#5530

  1. UTXO’s are the remnants of a previous transaction that allow for future transactions.

  2. The transaction will not be validated.

  3. The fee is determined by the difference of the input and output transaction.

  4. Each output is unique and cannot be decrypted.

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#5531
  1. The total of UTXO is the transaction balance received and unspent. There are no balance in Bitcoin there are only unspent transactions outputs (UTXO).
  2. It will use more UTXOs to cover the balance/transaction amount if there is enough Bitcoin (total of UTXOs) of the sender.
  3. The wallet checks the blockchain which is determining the fee
  4. It use a private blockchain generating a new address to be added to a block.
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#5532

  1. UTXO’s are like inputs but are unspent because they must all be used in the next transaction.

  2. The transaction does not go through as the nodes validate your wallet does not have enough.

  3. By UTXO’s - Output then what remains would be transaction fee.

  4. You can have increased privacy by sending two outputs around the same size if you send BTC back to your account for more anonymity.

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#5533
  1. Describe what Unspent Transaction Outputs (UTXO) are: The input transaction that is stored in your wallet to be used for future output (spent) transactions
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?: The transaction can not be completed until the wallet adds other UTXOs to determine if the sum is large enough to cover the transaction including fees.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?: It suggests a fee based on the fluctuating state of the network and data size.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?: Use a variety of addresses and/or break one transaction down into multiple smaller ones.
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#5534

  1. UTXOs are input transactions to your wallet that haven’t been spent yet.

  2. You can use other UTXOs to cover for the extra spend and send the difference back over to you.

  3. The transaction fee is the Input minus the Output.

  4. Have multiple bitcoin addresses.

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#5535
  1. UTXOs are unspent transactions tied to a public key.
  2. The wallet software will combine the amount needed from a combination of UTXOs. Then the amount left over is a new UTXO that is sent back the owner’s public key.
  3. The wallet queries the blockchain to find a fee that is reasonable with respect to time while considering other fees that have been charged in the block. There are some wallets where a fee can be specified.
  4. The owner of the UTXOs could send them to different public keys in order to obscure ownership.
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#5536
  1. UTXOs are basically the money you have, sort of like money from a cashier that is given to you.
  2. You would not be able to send until you gain more UTXOs to satisfy the transaction keeping the fee in mind.
  3. You can find this by subtracting input output fees to see it.
  4. Use a new wallet each time.
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#5537

Describe what Unspent Transaction Outputs (UTXO) are.

Unspent Transaction Outputs (UTXO) are the outputs that comes from a previous transaction. You basically use the UTXOs as transaction input when your wallet constructs a transaction. After your wallet sends the amount to a recipient that creates a new UTXOs that the recipient of the transaction can spent while he/she creates a new transaction.

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

In this case multiple different UTXOs will be used to create the transaction. And after the transaction,
one output will go back to you as the change of that transaction and some will be used as transaction
fees as well.

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

Bitcoin wallet uses dynamic fees. It will calculate fees based on the current network conditions and
transaction size. There are regular fees and priority fees. If you choose regular fees it will take more
time to get your transaction in the block but priority fees will get you in quickly.

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

The transaction between parties are completely anonymous on Bitcoin blockchain. When we look at a transaction in the block explorer we can only see there are public keys of sender and receiver. We can not even know if the sender actually sends the money to a different person or to himself. The transaction is private between sender and receiver.

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#5538
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXOs (Unspent Transaction Output) are the amount of received transactions that remain unspent and can therefore be spent by the recipient. Example: Peter sends me 0,5 BTC, my brother 0,2 BTC and my mom 0,3 BTC. My UTXO is 1 BTC in that case. This ist he amount I can spent for an input in another transaction.

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

In that case the transaction will simply be rejected.

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

It checks/scans previous transaction fees and suggests a transaction fee based upon that, so that my transaction will be put into the blockchain reasonably fast. Also, I can set a transaction fee by myself. The risk in latter case is, that if that fee is too low, the transaction will go into the blockchain slower (will be executed slower) as the miners will take the transactions with the biggest fees first.

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

A transaction can have multiple inputs and outputs, only the sum needs to be the sum of your unspent balance. Example: My balance is 1 BTC, and I want to buy a bike at bikeshop which costs me 0.7 BTC, I will have to send the remaining 0.3 BTC (minus transaction fees) back to myself. This is, because I have to spend everything I got (the balance of my wallet) every time I make a transaction.

To increase my privacy I will not send back the 0.3 BTC to the same wallet address, but to another wallet I own.

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#5539
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • All the values coming from previous transactions where you are the receiver and can be utilized for a new transaction.
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • If available, taking in another UTXO enough to cover the required value for that transaction. Any excess will be returned to you (as sender)
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • The wallet will check the blockchain network conditions at the time and data size of your transaction. Based on these things the wallet will recommend a transaction fee.
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • Since a transaction can compose of one or many inputs and then one or may outputs, one cannot simply conclude that a transaction was made between just two parties. It could be that a transaction was made between oneself or one to many others. So, the uncertainty of such possiblities increase privacy in seeing transaction records.
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#5540
  1. UTXOs represent the wallet balance.
  2. The blockchain simply ignore your transactions.
  3. It will take your output-input.
  4. Although the blocks recorded every single transaction which can track everything, we can only strengthen the privacy & security by using more addresses to create transactions.
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#5541
  1. UTXOs are all the transactions whose stored bitcoins are not spent and are held by the person whose bitcoin address has been mentioned.
  2. The transaction will not acknowledged
  3. It refers towards the recent tx fees on the blockchain and proposes u the value
  4. Generate new output addresses, and also have multiple output addresses
#5542

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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#5543

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO are the collective amount of inputs received to a wallet. The sum of your UTXO’s is the total balance of wallet.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Then your wallet would draw inputs from other UTXO’s to your wallet, if the sum of all of your UTXO’s is less than the transaction attempting to be made then the transaction would not be accepted.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Wallet allows user to choose a fee structure based on how quickly you want the transaction to be written to the blockchain. Transaction fee= input - output.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Input & outputs can be used to increase privacy by including multiple addresses in every transaction output, mixing in wallets that belong to the same user.

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#5544
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • A transaction on the blockchain that has not been spent. UTXO’s are used as inputs for other transactions.
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • UTXO’s will be combined to make sure the transaction is large enough to proceed.
    , or the transaction will not proceed.
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • The wallet look at the blockchain and will recommend what fee is appropriate when (it will take into account previous transaction and transaction times).
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • By using many different input and output addresses.
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#5545

Describe what Unspent Transaction Outputs (UTXO) are.
UTXO or unspent transaction outputs are the transactions that are left unspent after someone completes a transaction.

What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
The user’s wallet application will typically select from the user’s available UTXO various units to compose an amount greater than or equal to the desired transaction amount.

How would a bitcoin wallet specify the transaction fee when creating a transaction?
Transaction fees are implied, as the excess of inputs minus outputs: Wallet applications will use statistical analysis to calculate the most appropriate fee to attach to a transaction based on the average fees of recent transactions.

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
By selecting multiple input and output addresses and taking advantage of new ‘change’ addresses, created by your wallet, whilst sending funds back to yourself, making it less obvious that the addresses are connected.

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#5546
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXO’s are funds which a wallet has received & is now capable of spending.

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

The wallet would pull from a separate UTXO and send any remainder back to itself as a new UTXO.

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

principle amount to be sent + fee.

  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    increase variables to analyze through multiple amounts/addresses
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