Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#562
  1. UTXO’s are all previous transactions with unspent output or in other word the balance I have in my wallet is the sum of all my UTXO’s.
  2. Either I have to include all my UTXO’s or if I don’t have enough the transaction will not go trough.
  3. The transaction fee is calculated in the following way. Inputs - outputs
  4. For example by sending money to multiple addresses at the same time, some of them can be yours, some not, there is no way to tell.
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#563

  1. UTXO’s are the unspent transactions that are kept in your wallet.

  2. If you do not have any one single UTXO to cover a transaction, your wallet will add multiple UTXO’s to cover the amount and send back to you any overage.

  3. it will do it automatically normally, trying to give a fee that will be enough to create a reasonably fast transaction.

  4. To increase privacy during a transaction, you could try to use multiple addresses to decrease the chance of knowing who the transaction is going to.

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#564

UTXOs are the diference between the amount of BTC received and the BTC spent ( Input >= Output)

The transaction would be invalidated

The transaction fee will be automatically calculated from the wallet and will be the difference between the Output and the Input received back to the wallet.

Use a different wallet.

#565
  1. UTXO are unspent outputs recieved form previous transactions.
  2. Your wallet sum up more smaller UTXO to pay the transaction+fees and sent you back the change in the form of another UTXO.
  3. You can send you funds to different addresses that you own so that the remaining out goes to your new adrees instead of going back to the address that tasted the trranstation.
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#566

Describe what Unspent Transaction Outputs (UTXO) are.

UTXO is unspendt outputs. all the UTXO on your private key gives you your BTC saldo.

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

it would use two, and sent the remaining back to your own wallet

How would a bitcoin wallet specify the transaction fee when creating a transaction?the different between inputs and outputs

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

it would make it much more differecult to read the blockchain, if you sent 1 bitcoin, i don’t know if you get 0,999 back to your own wallet.

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#567

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are former outputs that sit in a wallet, waiting to become inputs for a new transaction. They show the balance of your wallet

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Then multiple UTCOs must be used. Leftover bitcoin can be sent back to your wallet

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The wallet decides the fee that will get your transaction entered into the blockchain quickly

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Privacy can be increased by using more addresses in the outputs that belong to the sender. Outsiders will not be able to know which addresses belong to a given person

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#568

#1 - A UTXO is the available output of old transactions which can be spend as input in a future transaction

#2 - The transaction is going to be rejected by the miners

#3 - ?

#4 - You could use a different adress for every transaction

#569

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    A UTXO is an unspent transaction. The blockchain can verify the thread of spent UTXOs originating from the coinbase transaction. A UTXO is held by the wallet until it is transferred to a new wallet to become spent.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    One of two scenarios may occur; either the wallet combines 2 or more UTXOs to balance the transaction, or the transaction is declined by the network.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The bitcoin wallet algorithm will search the blockchain for an average transaction fee of previous UTXOs and predict a fair price to ensure the transaction will be approved in ample time.

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

It is possible to track the identity of a user if originating transaction may have come from centralized exchanges. This is due to the needed KYC. However when generating a new UTXO through your wallet on the blockchain you will be able to scramble multiple receiving addresses in the one transaction. You may send partial funds to a provider of goods and services, while sending your family member some funds as a gift and then send what’s left to a new paper wallet of your own. It can be quite easy to remain anonymous as no public key can be decrypted to reveal the private key holder.

Can someone please confirm what I have said is true? Thank you :slight_smile:

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#570

  1. UTXOs are transactions that have come into a wallet in the past and have not been used as a transaction input.

  2. During a transaction, a wallet will aggregate UXTOs, send the requested amount to the destination wallet, the transaction fee to the miner, and the remainder back to the sending wallet.

  3. Your wallet will determine an optimum fee based on network traffic. Some wallets will let you determine your own transaction fee amount.

  4. Utilizing multiple output addresses and receiving through multiple input addresses can help improve anonymity in transactions.

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#571

  1. The UTXO’s is basically the amount you have in your wallet to spend.

  2. Your wallet will figure out the best combination of your UTXO’s and create the transaction.

  3. The wallet would subtract the outputs from the input and that would equal the fee you have to pay.

  4. Can’t quite understand the question :frowning:

#572
  1. UTXOs are outputs given from a transaction of previous inputs. Once we use them they become the new inputs for further transaction (when we send money we received). The ballance between inputs & outputs must be always equal.
  2. If we don’t have any songle UTXO that is large enough to cover our transaction, we have to first arrange the ballance in our wallet (send to ourselves or someone else sends to us) so that we can use previous UTXOs from other transaction to create a new input that we use to create a UTXO in the amout we want to spend.
  3. A bitcoin wallet would specify the transaction fee when creating a new transaction in a way that calculates the difference inbetween the input and the output. Some wallets will propose the fee in such a way that they will look at the previous fees on the blockchain & will give you a fee that will enable your transaction to occur fast enough.
  4. We can use the notion of transaction inputs and outputs to increase privacy in our transactions in such a way that when we need to spend less than our ballance as an input to create an output, we send money to a new address we own.
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#573
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXO’s on the bitcoin network are ‘your bitcoin’. They are the portions of the blockchain ledger that have been given to you, that you have not yet given to someone else.

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

Your wallet would build a transaction using multiple UTXO’s belonging to you. In this transaction, any ‘change’ would be sent back to your own wallet as a new UTXO.

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

By specifying the amount of ‘change’ or size of UTXO requested back to the wallet to cover any unspent UTXO in the current transaction.

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

By using a separate wallet or wallets belonging to you as recipients of the new ‘change’ UTXO’s from the transaction.

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#574
  1. UTXO’s are transactions you have received but you haven’t spent yet .
  2. Your transaction would not be approved
  3. The wallet calculates the fee by checking the fees in the block . It ends up being inputs minus outputs .
  4. By using multiple addresses for your outputs .
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#575

1.)
UTXOs are former outputs that sit in a wallet, waiting to become inputs for a new transaction. The wallet summs all your UTXOs up and shows you balance.

2.) One of two scenarios may occur; either the wallet combines 2 or more UTXOs to balance the transaction, or the transaction is declined by the network.

3.) The wallet will search the blockchain for an average tx fee of previous txs and predict a fair price to ensure the tx will be approved in a decent time

4.) You could make a lot of transaction to others and to yourself. From outside it is impossible to know, which transaction went where.

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#576
  1. A UTXO is basically the sum of all inputs to a private key that have not been spent.
  2. Then your transaction would be rejected by the blockchain as when the blockchain is queried it would say “nope, you don’t have this balance to spent bc you don’t have enough UTXO’s”.
  3. The transaction fee is the difference between all the inputs and the outputs, so it’s not specified, rather calculated based on inputs - outputs.
  4. Since a transaction has several inputs and outputs, no transaction will be one to one, therefore the specific inputs and outputs are not as easy to track - in other words, no one can tell that you sent x to y, rather that sum of all inputs (one of them being yours) = the sum of all outputs (one of them being who you paid).
#577
1. Describe what Unspent Transaction Outputs (UTXO) are.

A transaction sends value to one or more addresses. UTXOs are receivers of transactions which have not yet been used- they are unspent. These UTXOs can be used as inputs for a future transaction.

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

Then you would need to combine multiple UTXOs as inputs- just like using multiple cash notes or coins. In this case you’d get “change”, a UTXO sent to an address you own with the leftover amount.

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

The transaction fee is not specified, it is implied as the difference between the sum of the inputs minus the sum of the outputs.

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

By convention, most wallets will generate a new address for every transaction. This increases privacy as it makes it more difficult for a 3rd party to determine which UTXOs belong to a particular wallet.

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#578
  1. UTXO’s are Unspent Transaction Outputs meaning they are an output of money transacted to your wallet. This is money that you have received and can spend
  2. You send the total of multiple UTXO’s and send the difference back to yourself
  3. The fee is the what is left after you pay out the UTXO to another wallet and the amount sent back to yourself.
  4. Multiple inputs and outputs make tracking of the address
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#579
  1. Unspended transaction outputs
  2. TX will not go through because it hasn’t enough or doesn’t match the criteria
  3. The difference between the in- and output is the fee
  4. use different adresses to output
#580
  1. UTXO are unspent outputs from last transactions.
  2. The transaction would not proceed.
  3. The fee is equal to all inputs minus all the outputs of a transaction.
  4. We must use a different addresses in order to have many inputs and outputs
#581
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    These are transactions which can be spent. The sum of these transactions is the balance.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    All the UTXOs wil be used and if the sum of those is larger then the amount being sent + fee, the rest will be sent back. Nothing will happen if the amount being sent + fee is larger than the sum of the UTXOs.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It calculates this by looking at the transaction size and current conditions on the network and can be adjusted afterwards.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    By sending the remaining amount after a transaction to a new address(es) which are controlled by the same owner.
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