Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#5727
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are the sum of your total balance in your wallet based on input that you are able to spend less fees.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Your transaction would be canceled/return and wouldn’t receive any confirmations to be successful.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction? The wallet would look for the latest and fastest transaction fee on the blockchain and apply it to your transaction in order to be confirmed /successful.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?By using different inputs and outputs the addresses will vary continuously and no one is able to determine the ownership of an address and it remains anonymous.
#5728

  1. UTXOs are the unspent outputs from a previous transaction.

  2. If you don’t have any single UTXO that is large enough to cover for your transaction, you can use more than one UTXO to cover the total.

  3. Input - Output = TX Fee

  4. Addresses are not linked to personal identity, so you can transact with different output addresses to send to yourself and anyone without personal privacy being invaded.

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#5729

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.

#5730

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO represents the amount of BTS transactions that a private key have access to.
    For all bitcoin transactions, there is an input and an output. The outputs are called UTXOs, which tracks the private keys that have access to this unspent amount.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Your wallet will combine multiple inputs to cover the transaction plus fee.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The bitcoin wallet looks into previous transactions in the blockchain to determine an appropriate fee.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Because (1) an output can go back to the original sender, (2) the bitcoin address is not tie to identity and (3) one person can control multiple wallets. There is no way to tell whether the senders are just sending all the fund back to himself or to someone else.

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#5731

1.balance
2.rejection
3.mempool
4.different addresses

#5732
  1. The balance on your wallet from that comes from all outputs.
  2. UTXO’s will get combined if there are others on the wallet. If not the transaction will be declined.
  3. The difference between input & output.
  4. Constantly create new addresses for every new input.
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#5733
  1. UTXO’s are, for the end user, the amount of available BTC sent to you that is unspent by you.
  2. The wallet will pull from multiple UTXO’s to cover the transaction and fee.
  3. The wallet analyzes recent previous transactions to find a reasonable fee to be applied.
  4. Have multiple addresses within the same wallet- in the least for receiving transactions.
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#5734

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are your btc transactions received and not spent by you, your btc balance.

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

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Wallet will check on the blockchain the most recent fees and will apply it to your transaction so that it will get your transaction in the block fast enough.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    By creating and using multiple addresses

#5735

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.

#5736

1.) Unspent Transaction Outputs (UTXO) speaks to the balance remaining after executing a crypto transaction.

2.) Your wallet will add up UTXOs until the cost is covered. If there isnt enough, the transaction will be declined.

3.) The fee is the sum of the inputs minus the sum of the outputs.

4.) By using mjultiple inputs and outputs.

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#5737
  1. UTXO is the balance left in your wallet that it keeps track of.
  2. The transaction would be declined if your UTXO is not large enough to cover it.
  3. The wallet checks the blockchain and figures out the correct fee.
  4. Several addresses and outputs can result from one input
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#5738
  1. (UTXO) Your wallet balance, or recent input transaction is yet to be spent or output.
  2. If there’s not enough UTXO to cover transaction fee then transaction will not execute.
  3. Input - Output = Fees
  4. Use different addresses for each transaction you receive.
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#5739

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.

#5740
  1. Describe what Unspent Transaction Outputs (UTXO) are:

UTXO´s are the unspent outputs from previous transactions. Basically, Transactions you received waiting to be spend.

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

Your wallet automatically adds up all your UTXOs and if there aren´t enough to cover your transaction it would simply get rejected (invalid).

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

Most wallets automatically check the copy of the ledger and figure out the best price for relatively fast transaction speed. Then it subtracts the fee from the input to get the output. (input - output= Tx fee)

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

Anonymity is ensured, due to being able to send to different addresses including your own and no one ,except the private key owner knows where the UTXOs are actually being sent to.

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#5741

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

Unspent Transaction Outputs as inputs from other Bitcoin Adresses to my Bitcoin Address which i did not spent until now. If you summarize all UXTOs on your Bitcoin Address you get your actual Bitcoin balance.

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

Multiple UXTOs are used as input for a transaction. The rest of the transaction is sent back to my address as additional output (minus fees).

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

The fee must by high enough to attract miners to put my transaction onto a block. It depends on the byte size of my transaction (satoshis/byte) and not omn the amount i want to transfer. So complex transactions with multiple input uxtos or outputs need more feed to attract miners.
Normally a wallet calculates the best fees automatically based on the actual fees paid by others in the recent transaction history.

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

If you always send a portion of a transaction back to some of your own addresses (like a mixer) this will increase privacy because nobody can see to whom belongs on adddress in a transaction

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#5742
  1. Unspent transaction outputs (UTXO) are the transaction inputs created by the wallet on the blockchain network

2.You cannot spent what you do not have as a general rule so the nodes should and will reject the transaction.

3.The Bitcoin wallet does not specify the fees but they rather leave say a tip of unspent bitcoins which are automatically used as a fee.
4. Through the use of multiple addresses

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#5743
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Transactions that I have received from someone else and that I can then use to create my own transactions.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    I cannot create a transaction with that single one but need to combine different UTXOs.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Input minus output.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Wallet addresses are just a combination of numbers and letters, no one knows who they actually belong to. But you should generate/have multiple output addresses where to send your funds back to.
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#5744

  1. UTXOs are “outputs” of transactions that are as of yet unspent. These unspent outputs can then be taken by other wallets as inputs (essentially acting as receivables for the other account). If a given wallet’s inputs are greater than the amount used to pay, the UTXO output is then paid out to the address of the wallet holder. This makes up the balance of any given wallet.

  2. Your wallet will automatically come up with a combination of UTXOs based on your current balance, as long as it is confirmed with the nodes that you do, indeed have a balance equal to or greater than that of your transaction.

  3. Sometimes, the fee is specified before transaction is made… Other times, the transaction fee is computed automatically and is derived by computing the difference between the transaction’s UTXO input and its corresponding UTXO output.

  4. Because transaction inputs and outputs are essentially encrypted addresses, they can remain anonymous. They just look like pieces of code or script - and are unidentifiable without a specific wallet’s private key and its public counterpart.

(feedback on this would be greatly appreciated - I’m super confused with the exact mechanics of UTXOs)

:frowning:

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#5745

After every transaction you make or when funds are moved between your wallet, Most Bitcoin wallets automatically generate a new address . This is done to protect your privacy, so that a third-party cannot view all other transactions associated with your account simply by using a blockchain explorer. Here are some of the examples why to avoid address reuse.https://en.bitcoin.it/wiki/Privacy#Examples_and_case_studies

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#5746

  1. The amount in your wallet from previous transactions.

  2. It would fail if you use one UTXO. The solution will be to use multipe UTXO’s.

  3. Input - output

  4. By using multiple addresses for each receiving transactions.

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