Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#5787

  1. When someone sends you money (or transaction with some kind of input) - you now have UTXO from them.

  2. If any single UTXO, It will sum up more UTXOs. If there is no sum of multiple UTXOs that make up larger output, the transaction is invalid.

  3. Your wallet helps which inputs to choose and which outputs to create and calculate the fee, the wallet also looks at blockchain past fees and will give you a fee that will get you into the blockchain fast enough

  4. From the outside it is impossible to know which output went where, to the recipient, to the sender and there can be multiple outputs. That increases anonymity in transactions.

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#5788

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.

#5789

1.The Balance one has left to spend essentially
2.You dont have enough “money” to spend. Must transfer more inputs to yourself first
3.UTXO inputs subtracted from UTXO outputs is the fee
4.Never use the same address twice

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#5790

UTXOs are unspent transactions, a record is kept of each with the total amounting to what is left for you to spend within your wallet

If you do not have a single UTXO for the transaction, you can use multiple UTXOs. The full amount of all UTXOs will need to be transferred, any excess can be redirected to a wallett of your choice. An example of this is when you hand over cash and receive change

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#5791

A transaction fee depends on the complexity and time for the transaction to take place

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#5792

what happened to answer number 4🤔

#5793

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Balances in Output transaction can be used for Transaction inputs.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your
    transaction?
    The transaction will be rejected by the nodes due to insufficient balance

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The wallet looks at the latest transaction fees on the blockchain and determines the current fee on the
    basis of this to be able to process the transaction quickly. UTXO inputs substracted UTXO outputs is
    the fee.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Use multiple wallet addresses to send and receive coins

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#5794
  1. An unspent transaction output (UTXO) a transaction output that can be used as an input in a new transaction.
  2. The transaction would fail. You always need to have enough UTXO to cover the fees.
  3. It computes the the inputs vs the outputs and gives you a fee.
  4. Increase your volume of inputs and outputs
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#5795

Describe what Unspent Transaction Outputs (UTXO) are.
a database on the SPV of all your transactions which have not been spent

What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
the wallet would add up your other UTXO’s

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

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
maybe change to output address that is coming back to you, so the person is unable to see all your transactions

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#5796

  1. Unspent Transaction Outputs are outcomes of transactions from the past to a particular wallet address in the blockchain ledger, not yet spent.

  2. The wallet takes more UTXOs and makes UTXO-fees to the same input address. UTXO-fees is the transaction balance of total input minus actual spending. If there is not enough BTC available to cover the UTXO fees then the transaction will not go through / be successful.

  3. The wallet would look what the actual fees are for a reasonable time to get the transaction in the blockchain and makes a proposition to suit your transaction. The fee and transaction is then proposed to the miners who then accept or decline your transaction. The fee may be strategically increased or decreased by the network to make transactions more/less attractive for miners to process.

  4. Send to/use different addresses for your transaction balance that you own, increasing the UTXO of the transaction.

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#5797

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

Unspent Transaction Outputs are essentially the amount of BTC/Crypto your wallet can spend.

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

All my existing UTXO’s would be pooled to cover the transaction cost. If there aren’t enough additional UTXO’s to do this, the transaction would fail.

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

Fees are calculated by subtracting the input from output amount. Fees can also be increased by the user to incentivise miners, which in turn increases the transaction speed.

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

By creating new output addresses (wallets). Any user can create multiple addresses, and there is no way of knowing for sure which address is linked to the original user.

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#5798

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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#5799

thanks for the reply @Maki

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#5800
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Funds transferred between different blockchain addresses. A UTXO changes and is no longer for you a UTXO once it has been spent. It then becomes input for another address and a UTXO for that address.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Your wallet will add up several UTXOs and then use those to get to the total amount needed (+fee), providing your added up these are enough to cover the transaction.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The difference between the input and the output = transaction fee
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Not sure as all transaction can been seen on the blockchain. Open for some help or correction here :blush:
    Giving it a try anyway: adding up the different amounts (gathered from inputs) to 1 specific output hides which inputs have been used for what outputs
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#5801
  1. UTXOs are unspent amounts of Bitcoin associated to a certain wallet address. When the wallet is the recipient, it means that wallet has additional Bticoin in its balance (+). If however you send from your wallet, then your balance (or your amount of UTXOs) will decrease (-)
  2. You will have to spend a sum of UTXOs required for the transaction BUT you need the sum of those UTXOs to cover for the transaction and leave a portion for the fee.
  3. The fee will be the whatever the difference is between what you send and the intended amount your are paying such that Input=Output+Fee. You have to remember that is there is no fee left, then, miners won´t be incentivized to validate your transaction.
  4. Well, to mask the real amount of whatever you are spending/sending, you can send some bitcoin back to yourself and that way it will less clear to anyone overlooking what was the real (nett) amount for the transaction,
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#5802

unspent transaction output as the words say refers to a part of the blockchain in the output that remained unspent.

if you dont have large enough utxo for transaction,you can combine two or more separate utxo in your input,in order to reach amount you need as a output.

the transaction fee is specified automatically based on the transaction size and degree of traffic on the network.

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#5803

1-when someone send you a transaction of some inputs, these remain UTXO until you spend them i.e. make transaction to somewhere
2-then I can’t construct any new transactions.
3- it’s basically inputs minus outputs, no need to specified. usually the wallet check the previous fees on chain and calculates the best amount for you. fees goes to miners
4- transaction addresses generated by the wallet from its private key; when you check chain, inside blocks you can see transactions but it’s hard to distinguish whether a new Tx address listed is from the same wallet or completely different

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#5804

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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#5805

UTXO are unspent transactions until they are used. wallet balance.

If you did not have enough UTXO your transaction would be denied.

input - ouput = fee

Increase privacy? use a private blockchain.

#5806
  1. UTXOs are basically your balance
  2. If any single one of my UTXOs is not large enough for cover a transaction, then I will have to use several UTXOs. If the total of my UTXOs is still smaller than the transaction amount, then the transaction will be denied.
  3. a transaction fee would by default be the difference between inputs and outputs.
  4. In order to increase privacy, one could increase the number of private keys/addresses and send part of the BTCs to some of his/her different private keys/addresses.
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