Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#703

  • Describe what Unspent Transaction Outputs (UTXO) are.
    These are all the transactions done to your wallet and it equals the budget you have to spend.

  • What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? Your request will be rejected/ignored by the nodes you distribute the false information to.

  • How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It will automatically choose the best fee for the transaction and show you the fee before you approve the transaction
    In the explorer section you can also find the fee. You can simply verify by taking the input minus the output and the difference will be your fee

  • How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? It is safe to say that your identity is totally safe thanks to the immutable nature of the blockchain, you could however use different output addresses to leave observers clueless.

#704

1* UTXOs are the balance left in your wallet
2Combine more than 1 UTXO
3The fee is the input - the output
4* Create different addresses each time you do a transaction since addresses are not linked to an identity its very difficult to link UTXOs to an individual

#705
  1. utxo is your available balance
  2. no transaction can happen
  3. it will check the block chain and recommend best transaction fee.
  4. by sending the remaining balance to a wallet you control.
#706

They are the “balance” that you can spend. They basically tell the wallet what payments you have received and therefore how much you can transact.
2.
The wallet would look into the nods on the network and check if you have sufficient funds. If you don’t have the funds needed you will not be accepted into the network.
3.
The wallet calculated this for you between the inputs and output to get you onto the network in a reasonable time frame.
4.
By creating more addresses and therefore make the transaction less transparent.

#707

1- UTXO’s are the unspent BTC balance in your wallet
2- The transaction would not go through, as there won’t be any miner that would accept your UTXO
3-Fee is calculated from deducing all outputs from the inputs. Fee = inputs - outputs.
4- Everyone can see all transactions in the blockchain, and see the input & output addresses, but no one knows who controls those addresses. Therefore adding anonymity and security to the BTC blockchain

#708

  1. UTXOs are the positive side of a transaction, the money sent to be on your private keys’ funds. its money denominated for the recipient of the last transaction to spend

  2. It will either combine different UTXOs denominated to you to match the output, or if you don’t have that much the transaction will not get confirmed by the blockchain. the nodes will reject it.

  3. It will decide based on previous transactions what a reasonable fee would be in order to get the transaction completed in a reasonable amount of time.

  4. Well its already encrypted, but still the transaction is public, the only way to increase privacy would be to potentially have multiple wallets and send funds that need to come back to you to a separate wallet.

#709

  1. Transactions you have available to send to others.

  2. You combine smaller UTXOs to make enough.

  3. Input - Output = fees

  4. Send UTXOs to another wallet of yours.

#710

  1. UTXO’s are transactions (the amount of BTC) what have you received and that can be spent.

  2. Inputs = outputs
    It’s gonna take all your UTXO’s than cover your transaction and send the rest back. If there is not enough amount on all UTXO’s than transaction is invalid.

  3. Tx fee = inputs - outputs

  4. You can send transaction to several different recipient in the same time and also back to yourself and no one will know what address who owns.

1 Like
#711

  1. Transactions you have received and can be spend or the balance.

  2. Transaction will not be valid.

  3. Fee = input - output

  4. Make use of different multiple output addresses.

2 Likes
#712

Describe what Unspent Transaction Outputs (UTXO) are

UTXOs are the product of transactions and are what the wallet looks for and sums up that belong to your private key. UTXOs can not be split up but rather must be used in full in a transactions, if change is owed back to you for a transactions, another UTXO will be produced to send back to your address with the amount

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

Several UTXOs will be used in the transaction that sums up to an amount that will be big enough, change will again be generated as a UTXO that will be sent back to your address

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

The wallet will evaluate the fee based on previous transactions and will propose a fee that a miner will pick up quickly. When looking at a transaction the Fee can be calculated as the difference between the inputs and the outputs

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

Increasing the number of recipients and sending the change off to other addresses that you have would make it difficult to decipher what happened in the transaction

1 Like
#713
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Funds you have received in your account (Unspent) and verified by your wallet and used in your transaction (TX) to be sent to recipient (s). (O)
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    You may have to use more than one UTXO in your account that is equal or more than needed.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It depends on the amount of the transaction and the wallet includes the fee derived from previous transactions.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    By sending multiple recipients at the same time including yourself.
1 Like
#714

  1. Unspent transaction outputs (UTXO) are transactions you have received into a wallet you control and can be spent.

  2. If you don’t have a single UTXO that is large enough to cover the transaction your wallet can combine smaller UTXO’s to come up with the amount so the transaction can be executed.

  3. My Bitcoin wallet will recommend a reasonable fee based on the current transaction fees in the system.

4 To increase privacy you can create a new address for each output to make it tougher to tell which output goes back to the sender.

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#715

1.-
UTXO’s are the list that represents the transfer of (in this case bitcoin) value from one account to another.

2.-
The wallet will add up as many UTXO’s as it needs to cover the value needed to fulfill the transaction. The order of the UTXO’s taken or selected is on the logic programmed on the wallet.

3.-
Normally the wallets have an algorithm that can suggest a minimum fee based on the transactions found on the database itself. There are some other wallets that allow the user to set the fee manually.

4.-
Since the transaction can transfer amounts to any account I’m able to send money to other account that belong to me to. That is a way to obfuscate the flow of the value.

1 Like
#716
  1. Describe what Unspent Transaction Outputs (UTXO) are

UTXO stands for the unspent transaction output from bitcoin transactions. Each bitcoin transaction begins with input bitcoins used to balance the ledger. UTXOs are processed continuously and are responsible for beginning and ending each transaction. Confirmation of transaction results in the removal of spent coins from the UTXO database

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

The input UTXOs are used to cover the transaction, with the remaining sent back to the owner less transaction fees.

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

The difference between the input and output (after the transaction on the blockchain) is the transaction fee

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

The reason why transactions work this way is because it’s an easier and more secure way of doing it from a programming perspective. This is especially because of the new addresses assigned to the outputs

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#717

  1. UTXOs are transaction outputs that are not yet inputs to other transaction inputs. They help to determine the actual balance left in your crypto wallet using your private key.

  2. All UTXOs associated with your wallet become inputs for the transaction. If the sum of all UTXOs is still less than the amount you intend to spend, then the transaction gets rejected. If the sum of all inputs is greater than the amount you intend to spend, then the difference becomes the new UTXO which goes back to you plus a small transaction fee.

  3. The difference between the inputs and outputs gives the transaction fee.

  4. It is impossible to know who the UTXO belongs to unless you have the private key. Therefore we cannot trace where the outputs and inputs originate.

PS: can someone please check my answer to the 4th question. I see many explanations but I’m not sure if my answer it entirely correct.

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#718

  1. Transactions you have received that you haven’t spent yet.

  2. It will send from multiple UTXO’s so that the total is greater than the transaction itself, then it will send you back the difference.

  3. Transaction fee is figured out from subtracting input minus output

  4. Increase the number of inputs and outputs and mix different types of transactions of other addresses, privacy can be increased.

1 Like
#719
  1. UTXO are the remaining transactions in the Blockchain which are the resultant output of transactions from previous input(s). They are associated with the private key of the new / current owners
  2. The intended single UTXO would not be able to enable to complete the required transaction unless you combine it with another UTXO which in total would provide sufficient input for the transaction (including fee)
  3. the wallet would recommend the fee based the fees of transactions currently being accepted by miners for including recent transactions into their blocks for addition into the blockchain. The fee may vary based on the current level of activity in the blockchain which affect the fee amount being preferred by the miners at the time. (it can be calculated by them as fees per byte since the miners have a limited number of bytes in each block they create on the blockchain)
  4. Due to the fact that the input is sent from a blockchain address associated with the senders private key and the output is to the address associated with the intended recipients private key neither of which require their personal details. This means the privacy for the persons involved is increased
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#720
  1. UTXOs (one or more wallet outputs) add up to the total amount that a wallet can spend. The wallet queries the bitcoin network using its pk to determine what its balance is. As long as UTXO can cover the spend + fees, any btc leftover is available to the wallet is sent back to itself.
  2. Oops answered in Q1
  3. It queries the network to determine what fees currently are for the transaction size?
  4. Bitcoin addresses are anonymous plus wallet pk is required to query network for valid UTXOs.
1 Like
#721
  1. Describe what Unspent Transactions Outputs are.

UTXO’s are outputs received from another address that can be spent.

  1. 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, or UTXO’s will be combined to meet the the requirement of the transaction.

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

The Wallet would subtract the Input amount from the output amount

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

I could send bitcoin from multiple addresses to multiple addresses (multiple inputs to multiple outputs), effectively making the transaction anonymous.

1 Like
#722
  1. UTXO is the output which is not spend and you can use this output as an input for the following transaction.
  2. The transaction is not valid.
  3. The wallet shows an amount of fee based on the previous blocks of the blockchain.
  4. Generate more new output adresses.