Homework on Bitcoin Transactions and UTXO - Questions

[MidnightX]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   What’s left in the previous transaction.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   No Transaction unless other outputs can cover it.

3.How would a bitcoin wallet specify the transaction fee when creating a transaction?
The spread between input and output.

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

[RedK78]

1. Unspent Transaction Outputs are transactions that have come into your wallet, such as a 0.5 bitcoin payment from a friend. They remain as Unspent Transaction Outputs until they are used by that same wallet to make a payment. For example, if I use that 0.5 bitcoin payment from a friend to make a 0.45 bitcoin payment from that same wallet to someone else, that 0.5 bitcoin payment from a friend, that Unspent Transaction Output (UTXO) would then cease to exist.

2. If you do not have a single UTXO that is large enough to cover a transaction you want to make, your wallet will combine two or more UTXOs until the sum of those UTXOs covers the amount of the transaction you would like to make plus transaction fees. If the total sum of all your UTXOs does not cover the transaction cost plus transaction fees, you cannot make the transaction.

3. The transaction fee is not specified, it is implied. The total amount that is sent to the other accounts, including your own if there is bitcoin remaining, will be a tiny fraction less than the total value of the UTXO(s) that was or were inputted into the transaction. That difference is the fee.

4. If person A wanted to increase the privacy of their transactions with person B then person A could set up multiple outputs for a transaction that they wish to send to person B. Also, some of the transaction outputs from person A could also go back to addresses for person A. This would increase the privacy for a transaction because people looking from the outside would have a harder time figuring out the amount exchanged between the two parties when compared to just having one output for a transaction.

[kenny_escobar]

Homework on Bitcoin Transactions and UTXO - Questions

1. Describe what Unspent Transaction Outputs (UTXO) are.
   A// UTXO’s is an amount of money that you have receive from others in your wallet that is authorize to be spend.

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

A// You would not be abble to do the respective transaction because you dont have UTXO’s available.

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

A// INPUT - OUTPUT = FEE
0,9-0,8=0,1 fee

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

A// Use different addresses when sending the output

[Maki]

@kenny_escobar

/ You would not be abble to do the respective transaction because you dont have UTXO’s available.

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

[empty_nutella]

1. a UTXO is a transaction that you have received or sent that has not been sent to someone else

2. it would combine multiple UTXOs to create the funds needed to pay the transactions, sending the change back to you.

3. by looking at previous fees to find a fee that would get the transaction into the blockchain fast enough.

4. because no one knows who owns what bitcoin address, nobody knows who is sending money to who

[khalil]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   A UTXO represents the currency that you have available to spend, but haven’t.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   You wallet would then attach additional UTXO’s that are in the wallet to cover the cost.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   input - output = fee

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   There is no attribution to the wallet owner even when you get the remaining balance / change from a transaction.

[Maki]

@empty_nutella

because no one knows who owns what bitcoin address, nobody knows who is sending money to who

@khalil

There is no attribution to the wallet owner even when you get the remaining balance / change from a transaction.

The most basic approach would be to use a new address every time you receive funds or send change back to yourself. It is impossible to tell who’s sending to whom.

[Saint_77]

1. UTXOs for my Private Key summed together determines how much ‘money’ my Private Kry can spend.

2. You do not need 1 UTXO with enough money in it for my new transaction. All your UTXOs will be used as Inputs to your transaction, whenever you create a new Transaction. If all of them together still does NOT have enought money to do the transaction then you cannot do the transaction.

3. it does not specify it. It is implied by Taking total Inputs value, and then takes Total Outputs value and the difference is the fee

4. you always send yourself a UTXO of what balance is left after sending someone some BTC. You can forcefully add more outputs to the transaction so as to increase privacy.

[kathholmes]

1. A UTXO is an output of BTC that has not yet been used (i.e. spent) by the receiver.

2. The transaction would not be processed.

3. The transaction fee is the input minus the output.

4. If there are multiple outputs, it might be challenging to tell what you receive back thereby decreasing the possibility of identifying you through your wallet address.

[Alina19]

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

Answer: UTXOs are transaction outputs that can be used as inputs in a new transaction.

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

Answer: In this case, the wallet would combine several UTXOs together to get an amount of BTC large enough for your intended transaction.

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

Answer: There is no need to specify the transaction fee - it is simply the difference between input and output.

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

Answer: You can break down your transaction output into multiple outputs, with several outputs going back to the addresses that belong to your wallet.

[Maki]

@kathholmes

The transaction would not be processed.

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

[Gnarly.Karly]

Homework on Bitcoin Transactions and UTXO:

1. An Unspent Transaction Output (UTXO) is the amount of the money sent to an individual (output) that has not been processed for another transaction.

2. If a single UTXO amount is not enough to cover a transaction, the separate UTXOs will be combine. Then, the desired amount will be sent to the receiver. Finally, the remainder of the sum will be addressed to an account controlled by the sender.

3. Fees are never specified. This is because fees can be easily figured out by completing the equation of (input - output).

4. When an abundance of outputs are incorporated, it increases the privacy of the transaction, since the owner of each address is unknown.

[Andre_TWI]

1. UTXO’s are outputs from a previous transaction that is not spent.

2. The transaction will not happen.

3. input= output + gas fee. Whatever is in you it will pull out the total and add the gas fees to the total. The remainder will go back into your wallet through it’s own transaction.

4. Make different address with each transaction.

[Coinduke]

1. Unspent Transaction Outputs (UTXO) can be understood as bitcoin that a sender has authorized to be spent by a receiver. The BTC has left an address controlled by the sender, and is accounted to an address controlled by the receiver. Now the receiver is in position to spend this BTC, together with all other BTC in UTXO that the receiver has earlier been authorized to spent by all the corresponding senders. When this user wants to spend BTC, the bitcoin wallet takes one or more UTXO to serve as transaction input. The transaction output will become UTXO for holders of other BTC addresses the user authorizes to spend the BTC (with the miners collecting the fees).
2. For a transaction to succeed the size of a single UTXO does not matter. The bitcoin wallet will fetch all available UTXO, and only if the sum of UTXO is smaller than the amount of BTC (+fees) requested to be spent, the transaction will fail.
3. Bitcoin wallets automatically check the network and propose a fee or a set of fees to choose from (based e.g. on current network activity and estimated transaction speed).
4. To increase privacy it is advisable to use bitcoin wallets that support multiple receiving addresses, so that on a transaction level a 3rd party can not determine how much BTC I have actually spend and how much I effectively only transferred between my own addresses.

[dyildiz]

1. Basically, UTXO’s are unspent coins/tokens from received transactions.
2. Your transaction fails, never happens.
3. TX Fees = Inputs - Outputs
4. Make a bunch of transactions with a couple of wallets to make it hard to read.

[Maki]

@Andre_TWI

The transaction will not happen.

@dyildiz

Your transaction fails, never happens.

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

[Andre_TWI]

The explanation that you gave sounds better and we’ll put together

[MrGunnar]

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

A: A UTXO calculates the spending power of the wallet. Reflected in the balance of the wallet, there is no coins being held in a wallet, only a total balance of the UTXO’s tied to the wallet.

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

A: Multiple UTXO’s would be used to cover the sum needed, if this isn’t able to be met the transacted will be invalidated.

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

A: The wallet recommends a fee relative to the latest transactions added to the blockchain, this is meant to calculate with the result of having your transaction added to the blockchain in good speed, efficiency and staying cost effective enough to reward/incentivize the miner and be reasonably priced for you. Some wallets may give you options to pay higher or lower with differing outcome probabilities relating to urgency of the transaction being processed.

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

A: You could create multiple addresses, taking advantage of the anonymity of blockchain, and also make multiple micro-transactions to each of the addresses to make it more difficult to track the UTXO’s of one person.

[Ergo]

1. Transactions that are transferred into your wallet and calculated by your wallet as current crypto currency balance.

2. Use other UTXO

3. Input minus output

4. multiple inputs and outputs. Also, an output can taken from multiple inputs.

[gvent]

1. Incoming funds from transaction A to transaction B that transaction B has not yet spent.
2. Wallet will combine multiple UTXOs to cover for the transaction and the remaining amount left (if any) can be sent back to the payer’s address.
3. It bases it on historical transaction fees and picks a trans. fee that would allow that transaction to be added to the blockchain reasonably quickly.
4. A wallet owned by the same individual may have multiple addresses. When sending funds, the same transaction may have several outputs (going to several addresses). It is not possible tell which address (es) belong to the same wallet/individual. Transactions, therefore, may remain anonymous.