Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#5828
  1. UTXO is data on the blockchain that is designated to your address.
  2. Transaction does not happen. Have to gather more input.
  3. Input - output = transaction fee ; gather unused input after the output has been obtained.
  4. Use multiple inputs and outputs for receiving transactions.
#5829

You can use multiple UTXOs as inputs to a new tx. If you don’t have enough your transaction would be declined.

#5830
  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • UTXO is bitcoin that has been received by you in your wallet which you have not transferred or made a payment yet to another. It is not a coin per se, but an input that the blockchain determined to be what it is worth for that you received.
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • A UTXO can be received in different parts or amounts, that your wallet sums up altogether.
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • The fee is deducted automatically you do not have to determine or put the fee yourself.
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • These inputs and outputs have characteristics that put your transaction secure and private, like hashing, private keys and public keys in which no one would be able to trace the actual owner of the wallet.
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#5831

  1. UTXO is an output of some BTC sender (output of his transaction), who is sending some BTC to a chosen receiver and until those funds are not send forward by this receiver (they are not used in any of receiver forwarding transactions), they are considered as unspent transaction output, even tho that UTXO is actually an input of that receiver, which just did not spend that BTC yet, but that sender has now spent his funds, so he has no UTXOs on his behalf regarding this transaction anymore. From UTXOs a wallet balance is deduced.

  2. Not much, you can not send - spend any funds.

  3. tx input = tx output + tx fee, so tx fee = input - output

  4. By using many addresses

#5832

You can use multiple UTXOs as inputs to a new tx. If you don’t have enough your transaction would be declined.

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#5833

O, I thought I said something like that but more in a “red neck” fashion:P:) Thank you!

#5834
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Transaction that were made from other addresses to your address ant that haven’t been spent from your address.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Transaction won’t be processed.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    wallet checks current status on blockchain regarding fees, and gives the optimal value for fee that the transaction can be successfully processed.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Maybe that you can use multiple addresses for receiving and sending transactions? i didn’t fully understand the question.
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#5835
  1. Received transactions allowing for the construction of new transactions.
  2. The transaction would be declined by the server of nodes.
  3. Not all wallets determine the transaction fees - but for those that do, it is determined through reasonable steps via monitoring previous transactions costs.
  4. multiple wallets
#5836

You can use multiple UTXOs as inputs to a new tx. If you don’t have enough your transaction would be declined.

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#5837

You can use multiple UTXOs as inputs to a new tx. If you don’t have enough your transaction would be declined.

#5838

Thank you Maki for this important detail :slight_smile:

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#5839

What are unspent transaction outputs (UTXO)?
that are transactions that came to your private key and who are not spend yet.
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
That transaction can simply not be processed.
How would a bitcoin wallet specify the transaction fee when creating a transaction?
TRANSACTION FEE = input - output. The wallet will look to previous TX and will propose a fee
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
With every transaction you can see the address where the input or inputs comes from and the outputs where it went to, but the address doesn’t show who is the actual owner of the UTXO

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#5840

  1. Describe what Unspent Transaction Outputs (UTXO) are?
    All the amount which user receives are marked as UTXO. They are scattered all over the blocks. The user wallet scans all the blocks and aggregates it to show balance of bitcoin in wallet.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Then the wallet will combine 2 or more UTXO that is large enough to cover our transaction and it will consume all those transaction and send the transferred amount to other user as his UTXO. If there is any leftover Bitcoin , then it will send it back to senders wallet as a new UTXO.

3.How would a bitcoin wallet specify the transaction fee when creating a transaction?
In wallet we have to specify the fees while creating the transaction. A fees is just a incentive for miners to pick your transaction quickly.

  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
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#5841

  1. UTXO is input in a wallet that has not been spent

  2. The transaction will not be verified.

  3. Input - Output

  4. By using many addresses in one transaction

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#5842

True ms. Maki :slightly_smiling_face: I was little off.

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#5843

Your right, but what if someone knows your public address, he can track how much balance you have on the blockchain (for instance an exchange has your KYC data, when you withdraw from the exchange, they know what your address is). You can avoid this by using a new address every time you receive.

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#5844

You can use multiple UTXOs as inputs to a new tx. If you don’t have enough your transaction would be declined.

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#5845

what happened to answer 4🤔

#5846

  1. UTXOs are the received BTCs in a wallet that have not yet been spent

  2. Without enough UTXOs to cover the transaction, the transaction will be declined. But if one single UTXO in the wallet is not enough to cover the transaction, several UTXOs can be combined to cover it

  3. It will query the blockchain for the appropriate fee and then the fee will be deducted from the input amount and given to miners.

  4. Using many inputs to achieve the output increases anonymity of original sender

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#5847

  1. UTXOs are outputs received from another address which act as inputs for your new transaction. Your wallet keeps track of your UTXOs to give you your balance.

  2. Your wallet will let the blockchain know your private key does not have enough UTXOs to complete the transaction, and it will not go through.

  3. The fee is automatically calculated by your wallet as fee= inputs-outputs.

  4. By making the addresses anonymous by encryption.

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