Homework on Bitcoin Transactions and UTXO - Questions

[Ghosty126]

1. UTXOs are the remaining balance left in your wallet
2. The transaction would not proceed or be verified.
3. When creating a Bitcoin transaction, a sender can specify the transaction fee they are willing to pay in order to have their transaction confirmed by the network. This fee is typically paid to the miners who validate and process the transaction.

Bitcoin wallets usually offer different options for transaction fees, such as low, medium, or high fees, or they may allow the user to manually specify the fee amount in satoshis per byte (sat/byte). The higher the fee, the faster the transaction is likely to be confirmed by the network, as miners prioritize transactions with higher fees.

The fee amount is determined by the size of the transaction in bytes and the current level of network congestion. Wallets typically use an algorithm to estimate the appropriate fee based on the current network conditions. Some wallets may also offer the option to enable dynamic fee calculation, where the wallet will automatically adjust the fee based on the current network congestion to ensure that the transaction is confirmed in a timely manner.

4. The notion of transaction inputs and outputs can be used to increase privacy in Bitcoin transactions by implementing a technique called CoinJoin.

CoinJoin is a method of combining multiple Bitcoin transactions into a single transaction with multiple inputs and outputs. By doing this, it becomes more difficult for an outside observer to determine which input corresponds to which output.

For example, imagine that Alice wants to send 1 Bitcoin to Bob, and Bob wants to send 0.5 Bitcoin to Carol. Instead of creating two separate transactions, Alice, Bob, and Carol can create a single transaction with two inputs and two outputs. Alice’s input of 1 Bitcoin and Bob’s input of 0.5 Bitcoin are combined into a single input, and the outputs are split into two, with 1 Bitcoin going to Bob and 0.5 Bitcoin going to Carol.

This technique makes it harder for third parties to trace the flow of Bitcoin because it is no longer clear which input is associated with which output. By grouping transactions together in this way, it becomes more difficult to determine which parties are transacting with each other.

CoinJoin can be implemented using specialized wallet software or through mixing services that allow users to combine their transactions with those of other users. However, it is important to note that CoinJoin transactions may still be identifiable if other information, such as IP addresses or transaction amounts, are leaked or otherwise compromised.

[Patrick_LeClaire]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   The amount of BTC available for output transactions.

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

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   Output amount minus input amount

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   Use multiple input addresses and output addresses so the wallets are not easily identifiable.

[Myriah]

1. Describe what Unspent Transaction Outputs (UTXO) are. Received transactions that have not yet been sent elsewhere.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? As many UTXOs as are necessary to cover the transaction are used and the remaining balance is sent back to your wallet.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction? The wallet receives the fee amount from the blockchain. The fee is deducted from the output.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? You could use multiple addresses to send/receive transactions.

[2023]

Homework on Bitcoin Transactions and UTXO - Questions

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXO is money you recive, witch in fact is “hunging” and waiting till you decide where you wanna send it.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   It will be recognised by ladgers and will not take place in blockchain.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction? It will do it aoutomaticly(most of the cases) and wallet will decide witch UTXO use to cover transaction fee and whats get to be sended out back to your wallet. Note, that Input allways is equal output pluss fee.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? Whenever you make transaction you use all UTXO witch are noticed to you and that mixes together and makes it hard to trace exact transaction that was made sinse all UTXO must be spended.

[CryptoCredentials]

1. UTXOs are the inputs into a wallet that are not used as outputs yet.
2. If you do know have any single UTXO that is not large enough to cover the transaction it will not go through and will not receive verification.
3. The bitcoin wallet fee is specified by the input=outputs+fee, thus the fee is implied but not shown.
4. You can increase privacy by sending transactions either back to your original wallet address or to another address that you own, as neither are registered directly to you, and only known by you (unless publicly shared) which can create a rabbit trail if desired.

[NeoMaredi]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   -> Balance left in a wallet after a transaction that is subsequently kept track of.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   -> The transaction will subsequently be declined, because you do not have a single UTXO large enough to cover the transaction

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   -> Fees are calculate by subtracting inputs and outputs

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   -> Several addresses can result from a single output thus it is very cumbersome to try and find out which exact amount came from which address at what time

[gino]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   Bitcoin transactions that are available to spend.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   Wallet will search for additional UTXO’s whose sum(utxo) >= transaction amount.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   a. bitcoin wallet sets transaction fees by looking at the most recent Blockchain transactions.
   b. allows wallet user to set transaction fee.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   The more utxo input used and outputs created will put current bitcoin wallet transactions(uxto) further away from original bitcoin input transaction.

[Doyle]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXOs are the change you receive when sending bitcoin to someone.
   They are used to reconcile your wallet balance.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   A combination of UTXOs are summed until >= the total needed.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   The fees are computed by taking the balance of the input and the output.

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

[L_Rhymes]

1. UTXOs are Unspent Transaction Outputs. They are the sum total of any bitcoin you have previously received and are available to use.

2. UTXOs are kind of like your balance. If you do not have enough UTXOs in your wallet to make a transaction, it will not go through. Essentially, it is “declined”.

3. This I am still a little unsure of. Ivan explained that the fee is calculated by subtracting the spend amount from the amount available. However, based on reading others’ responses and from doing a little research, it seems that the fees are calculated based on the size (in bytes) of the transaction you are going to send, previous fees that have been sent, as well as the sender’s choice which can allow for faster processing.

4. The more inputs and outputs there are into your wallet, the more difficult it is to match which input corresponds to which output thereby increasing privacy.

[Jan_Orr]

UTXOs are the unspent transaction outputs which equals to the balance in your wallet.

If you do not have a single UTXO that is large enough to cover the amount that you want to spend, several UTXO transactions may be combined to cover the amount and any remaining would be sent to another address that is controlled by the originator. If of course you do not have enough UTXOs available then the transaction will be declined.

The fee is calculated by adding up all the inputs and subtracting the outputs.

By using different addresses when you want to receive something,

[Joshua_Smart]

1. UTXO’s are the unspent outputs from your previous transaction assigned to your private key
2. Your wallet will use all of your UTXO’s available to create your transaction. If the sum of all your available UTXO’s is not enough to cover the transaction, then it would be invalid and not accepted by the blockchain.
3. The fee is always the difference between the Inputs and the Outputs.
4. No one knows except the PK owner which outputs are going back to the original owner or to a different person.

[Steno]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXO stands for unspent transaction output. This is the sum of the total BTC one has received and is available to be spent/used.

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

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   The fees are calculate by subtracting inputs and outputs

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

[Bsmurf]

Describe what Unspent Transaction Outputs (UTXO) are.
An amount that is not used yet and connected to a private key. Meaning if I want to send for example Bitcoin to another person, I can use my UTXO to do that. The amount has to be always bigger of the UTXO, than the amount I want to send, because of the fee. Note: Try to answer the question without using: Transaction, Output, Unspent…

What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
It will not go through = ledger will decline the transaction

How would a bitcoin wallet specify the transaction fee when creating a transaction?
The fee is calculted by substracting the input from the output

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
By using multiple inputs and outputs as well as using different wallets.

[dmedina]

1. UTXO are funds that have been sent to you, the wallet will check the blockchains UTXOs and give you your balance.

2. The transaction will not be executed.

3. Input - Output = Tx Fee

4. 1 input can have multiple outputs to different address including the same input. You can also send UTXOs to multiple keys you control.

[rvn]

1. UTXO are the inputs i have received from various sources. Essentially the balance i have to spend.
2. The transaction will fail, i,e. not take place.
3. Wallet does not explicitly list out fees. Inputs Minus Outputs is the implied fees.
4. Send money to a key i control

[TNP]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXOs are all the single transactions that I received and I haven’t sent yet. From the perspective of the sender they are spent transaction outputs.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   I would need to combine several UTXOs together and then send the balance (net of fees) to myself. If the sum of UTXOs is still not enough, then I cannot spend.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   The fee is sum of inputs minus sum of outputs. the fee is calculated so that the transaction doesn’t get stuck too long on the network. Some wallets let you specify the fee.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   By playing with UTXOs. take an input and split it into several outputs. Those outputs would then be split between the real recipient of the transaction and several other addresses you own. you can also get the amount to the end receiver by sending it to several of its addresses

[Julianons87]

1. UTXO is the unspent output of a transaction.

2. The transaction won’t be approved.

3. The difference between inputs and outputs will define the fee.

4. Using many inputs and outputs/addresses for each transaction

[MIKODINGO]

1. UTXO are the result of input transaction send to your wallet

2. You wont be able to do the transaction

3. It could just calculate the fee automatically or propose you different fee (the more expensive the quicker the transaction is done).

4.send some transaction from different adresses to one adress

[GenXCrypto]

1. Describe what Unspent Transaction Outputs (UTXO) are.
       UTXO is the BTC out put that you have received, but not used or sent. 
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
      Your Wallet adds the total amount of UTXO’s and it is the total sum that is used. The amount that 
       is not used is sent back to yourself.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
       It is the left over from the sum of UTXO’s that you did not spend on the transaction.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? 
       Buy using multiple wallets to send the transaction. You could even use one that you own. It is 
      not clear who owns what wallet.

[TradesSquare]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   They are parts of Bitcoin that have been received but not yet spent.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   If you don’t have a single UTXO big enough for your transaction, your wallet will combine several smaller UTXOs to cover the amount.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   A Bitcoin wallet sets the transaction fee based on current network conditions. It suggests a fee high enough to get your transaction confirmed quickly.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   To increase privacy in Bitcoin transactions, you can use multiple inputs and outputs.