Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#5587
  1. Unspent transactions are whole or fractional outputs of a transaction that are sent to an address you control.
  2. If you do not have enough UTXO transaction would not be verified and declined.
  3. transaction fees are inputs - outputs of a transaction.
  4. If you want the transaction not to be identified you could send outputs to various addresses under your control.
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#5588

  1. UTXOs are the result of a transaction that correspond to a coin value equal to the transaction’s input.

  2. Multiple UTXOs will be used as the inputs for the transaction if you don’t have any single UTXO that is large enough to cover it.

  3. A bitcoin wallet could specify the transaction fee by subtracting the required output from the input.

  4. You could break up a single payment into multiple transactions (in an attempt to obscure the payment).

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#5589

  1. Describe what Unspent Transaction Outputs (UTXO) are : UTXO’s are the unspent transaction inputs to a transaction that makes up the balance of a transaction on hand. So for example if I buy 1 BTC on an exchange and it is made up of 4 different transactions that sums up to 1 BTC, then the input to my transaction block is 1 BTC. So say that I then sell 0,5 BTC, my Wallet would construct a new transaction whereby I may create 2 UTXO’s to two different buyers that would make up 0,5 BTC and I will send back to myself a new input transaction of 0,5 BTC less the mining / transaction fees.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction : It depends, because the rule is that the sum of the UTXO’s that makes up my balance should be enough to cover a new transaction. So if the balance of my input transactions are less than the output transaction I would like to create the transaction is not possible. If the sum of the input transactions is more than the output transaction then it would be possible to create the transaction.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction : Some wallets can set a transaction fee, other wallets would suggest a fee based on similar transactions on the Blockchain.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction : If someone uses a Block Explorer to view transactions that was created, it is not possible from the transaction data to identify the owner of the transaction. This makes transactions completely private and only the owner of the transaction / wallet would know that he completed the transaction.

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#5590
  1. UTXO’s are the inputs to your address that have not become outputs of your address. In other words, funds that have been sent to you that you have not spent.
  2. You send a transaction amount greater than what you need and send the change back to yourself (minus the fee).
  3. Fee = Input - Output
  4. Instead of sending the change back to your original address, you could send it to another address you have.
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#5591
  1. UTXO is the balance in the wallet available for spending
  2. Transaction would be invalidated
  3. input=output (spending) + transacting fee
  4. the input and output addresses are anonymous
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#5592

1: UTXO’s are the balance remaining in your wallet, or that isn’t spent.
2: If a single UTXO isn’t sufficient enough to cover the transaction, the the transaction itself becomes null and void.
3: Transaction fee = UTXO-UTXO Input
4: A private blockchain will be best to increase the privacy in transactions conducted.

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#5593

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.

#5594
  1. What you have left from the input.
  2. It wouldn’t go through.
  3. Input-Output=Tx Fee.
  4. Have one input and multiple outputs.
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#5595

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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#5596

Thank you for sharing that! That makes more sense in my mind as I took what you shared and studies it further. I didn’t take into account multiple UTXO’s

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#5597
  1. essentually utxo is your account balance or a combined of all yur utxo is your account balance before you spend it.
    2.well if you get a wallet, the wallet will combine all your utxos to be able to cover the balance and if that didnt cover the balance you couldnt complete the transaction.
    3.the wallet finds the most recent transaction and gives you an estimated transaction fee that is still relativaly quick.
    4.as you spend your utxo’s you could also send some back to you in a different wallet creating another transaction and it is impossible from the outside looking in to know who you sent to.
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#5598

  1. Unspent Tx is the remaining BTC in a wallet which the private key verifies with the blockchain to understand how much BTC can be spent/ is available.

  2. Tx will not be executed.

  3. Whichever fee has the most probability of miners accepting the Tx.

  4. Mask a Tx by using multiple inputs and outputs to cover the trail of Tx.

#5599

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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#5600

Unspent transactions is held on the blockchain represented by the balance in the wallet before constructing a transaction.
The transaction will not go through.
By sending multiple transactions at the same time including sending back to yourself.

#5601

Thank you for clarifying. I answered for the scenario " if you don’t have any single UTXO that is large enough to cover for your transaction".

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#5602

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.

#5603
  1. A UTXO is the output of a previous transaction that can be spent with a particular private key. Once that UTXO is used in a transaction it cannot be used again (because then it is spent). UTXOs are stored in the blockchain. Adding up all UTXOs for a private key gives you the balance of the wallet
  2. The transaction will be rejected by the nodes
  3. Most wallets propose a transaction fee based on previous transaction fees. It will be high enough to have a reasonable transaction speed
  4. It is not known who controls the output addresses. Therefore, it can be used to increase privacy by making transactions to yourself, but with a different address.
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#5604
  1. Describe what Unspent Transaction Outputs (UTXO) are.

They are inputs in a wallet that haven’t been spent. They are outputs of another transaction that haven’t been spent.

In UTXO model inputs must equal the outputs this proves that no tokens have been created out of nothing and that no coins have been destroyed.

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

Several UTXO can be spent. A transaction can be created to spent of as many UTXO outputs to sum the transaction, the difference between the covered transaction and the sum of UTXO spent has to be directed somewhere, it can be to the same wallet (as change in a physical money transaction) or a different wallet.

An analogy of the UTXO model is a real wallet, the unspent UTXO are bills or change from other transactions but the denominations of this “Bills” are not limited.

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

It is the difference between what was spent and the input that was asked to spend.

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

You can send several UTXOs and some of them can be send to your wallet.

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#5605

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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#5606
  1. Unspent UTXOs is like residual unspent amounts from the previous transaction.
  2. If you did not have enough UTXO then the transaction would be not occur.
  3. The fee is calculated from the remainder of all inputs minus the outputs of a transaction.
  4. Use a different address for each receiving transaction.
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