Homework on Bitcoin Transactions and UTXO - Questions

a). UTXO’S are unspent transaction outputs. These are the UTXO’S that are in your wallet balance based on blockchain data.

b). The transaction would be invalid and would be declined.

c). This would be the job of the wallet to look to the blockchain, which is calculated in the process of inputs minus the outputs.

d). Use an unnecessary large amount of outputs that go to different addresses that are in your control. This makes it more difficult to see what you have purchased and from whom.

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  1. UTXOs are the balance that is in your wallet.

  2. Other small UTXOs will be added up, and if there is still not enough the transaction is invalid.

3.Transaction fee is the difference between the input and output values.

  1. Use different addresses when receiving.
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  1. A UTXO refers to a transaction output that can be used as an input in a new transaction. It is the United part of a transaction. Whenever transactions are made a user takes one or more UTXO to serve as the inputs. The user provides the digital signature to confirm ownership over the inputs resulting in outputs. The UTXOs consumed are now spent and can no longer be used.

  2. Transaction input has to be greater than transaction output since the sender needs to give some transaction fees to the miners. A sender must have enough to cover output and fees. If they don’t their wallet will reject the transaction.

  3. Input - Output = TX fee

  4. The process using public and private Keys makes the process secure. The fact that transactions are linear increases the security. Plus each transaction is verified prior to being approved which also increases security. However increasing inputs and outputs to various addresses or Keys could increase privacy.

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  1. UTXO is the full amount of what is in the wallet.
  2. it will bounce back and not be accepted by the nodes
  3. input - output
  4. the remainder bouncing back to you could be to another address that you have.
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  1. UTXO’s are what determines your balance and how much you are allowed to transact with.

  2. You would not be able to transact or you would need to use more than one UTXO.

  3. Total input - total output= TX fee

  4. Instead of using the same address every time you transact have the output sent to a new address after every transaction.

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Total balance
No transaction
The fee is figured out from the current input and outputs
Scramble addresses

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1. Describe what Unspent Transaction Outputs (UTXO) are.
UTXOs are funds that you have just received but have not spent. UTXOs are outputs of previous transactions.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
Wallet combines the UTXOs to make it available for spending and cover costs. IF it is still not enough the transaction will be declined.

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

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
A transaction is a data structure that encodes a transfer of value from a source of funds, called an input , to a destination, called an output . Transaction inputs and outputs are not related to accounts or identities. Instead, you should think of them as bitcoin amounts—chunks of bitcoin—being locked with a specific secret that only the owner, or person who knows the secret, can unlock.
(source://www.oreilly.com)

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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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UTXOs are Outputs from previous transactions you have not spent, once used they are STXOs tho the new amount given to the next person has a UTXO.

If you don’t have a UTXO large enough for a transaction, multiple UTXOs will be combined in the transaction such as: price 0.8 Inputs 0.4, 0.3, 0.2, Outputs 0.8 to the person, 0.1 back to my Wallet, minus the TX fee.

The wallet specifies the TX fee by looking at past transactions and their fees, and based on that data presenting a result that is most likely to be accepted.

multiple outputs can make you, and the person you transact with harder to track.

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Do you mean with a service like Tornado cash? (tho banned now)

  1. UTXOs are Outputs from previous transactions you have not spent, once used they are STXOs tho the new amount given to the next person has a UTXO.

  2. If you don’t have a UTXO large enough for a transaction, multiple UTXOs will be combined in the transaction such as: price 0.8 Inputs 0.4, 0.3, 0.2, Outputs 0.8 to the person, 0.1 back to my Wallet, minus the TX fee.

  3. The wallet specifies the TX fee by looking at past transactions and their fees, and based on that data presenting a result that is most likely to be accepted.

  4. multiple outputs can make you, and the person you transact with harder to track.

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  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO’s are what BTC you have received or have leftover in your wallet

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    It’ll then combine other UTXO’s in order to cover for the transaction

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It’s the difference in the input and output

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    The more outputs the harder it is to track which leads to you

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Concise, to the point, well done :+1:

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1 transactions that are waiting to be spent

2 transaction would fail

3 outcoming - incoming = fee

4 increase the number of outputs and generate new output addresses

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The tx wouldn’t fail if you combine one UTXO with another to make up the sum you need. If combining won’t make up the total you need, then yes it would fail.

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  1. Utxos are simply the output of a transaction. Once an UTXO, signed using the Private Key, is approved it becomes an input for another transaction, an so on…also once an UTXO is approved, it can’t be spent again, because, due to the hashing process, it couldn’t be reversed.
  2. The transaction will never be approved, so will never be “put” into a block and the into the BlockChain.
  3. Basically the difference between the Input and the Output. So, simply speaking you can spend your Utxos + the (current) fee to cover the amount of the price.
  4. Changing the address (Ex.Wallet) of the UTXO output
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1 The amount that was send to you by a previous TX.
2 You spend multiple UTXOs.
3 Input-Output=Fees.
4 For privacy make an program that constantly makes different private keys and constantly makes TX with multiple inputs and outputs and shuffles the BTC, tho this may be expensive due to the fees.

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UTXOs are the output from a previous transaction.
The transaction would be rejected by the blockchain.
The wallet would subtract the output from the input to determine the fee.
You can send an output back to yourself using a different address from the address you used for the input.

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  1. UTXO is a total balance left in your wallet.

  2. The transaction will decline on the blockchain.

  3. A transaction fee would be unspent transaction - minus - spent transaction then = transaction fee.

  4. By randomly generating different outputs addresses.

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

    • The UXTOs are the available balance that you can spend.
  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
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?

    • The wallet will suggest the fee based the previous fees transaction into the blockchain.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?

    • I can generate more than 1 or 2 output addresses including different addresses for myself
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