Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#743
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXO are exactly what the name tells, unspent transaction outputs. Transaction that have been received and can be spend (waiting for be spend, like change from previously transactions, salary, gifts from mum/dad etcetera).

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

The wallet will add several UTXO to cover for your transaction. For example you want to spend 1 bitcoin, you have a UTXO from your mum (0,5bitcoin) and 0,5 from your dad. But if you don’t have enough UTXOs to cover your transaction, you basically do not have enough “currency” to do the transaction (buy the product). The transaction will therefore be rejected.

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

Input = Output + transaction fee.

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

Different addresses make it hard to tell who is the owner of the wallet. You can send spend UTXO and send to yourself, and no one know if you send it to someone else, to yourself etc.

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#744
  1. UTXO are the bitcoins which you have received and not yet spent from your wallet.
  2. It will sum up all possible other small UTXos to make a large transaction as required and change will be an output to your account after deduction of transaction fees.
  3. Bitcoin transaction fees is implied. Its not explicitly specified
  4. Anonymity is provided by the nature of bitcoin transactions as output can be sent to multiple channels as well to same input channel.
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#745

Are basically the transaction that you received and still need to be “spent”, when you receive a transaction, for example of an amount of 1 btc , you have now 1 btc as one UTXO , this remain an UTXO till you will “spend” the transaction again with your wallet, in that moment will become a “Spent transaction Output”.

I this case what will happen is that will be sent more outputs , so as example if i need to send 0.6 BTC from the previous 1BTC i received , there will be 2 UTXO , one of 0.6 BTC and another of 0.4 BTC that will go back to my wallet.

The difference between the output and the input are the transaction fee . Furthermore the fee is calculated as satoshi per byte , one satoshi is a one hundred millionth of a single bitcoin, the fee will be higher if the transaction require more space (byte) in the block. Most wallet let you decide how many sat/byte spend for every transaction, high fees will prioritize your transaction for the miner that will confirm your transaction as they will have more incentive to confirm the transaction that will provide them more fees.

By using many different btc addresses you can increase the privacy. As in bitcoin only all the transactions and addresses are public (and not the ownership of the addresses) you can’t (easily) know who is behind each address of the transactions.

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#746

  1. UTXOs are transactions your wallet has received from a prior senders wallet. They are your wallets input transactions. They are known as unspent transaction outputs until your wallet creates a new output transaction which will then become a “spent” transaction output which is the receiving wallets new input/UTXO.

  2. Your wallet will construct a transaction from a number of UTXOs and then send the “change” back to your wallet.

  3. Input - Output = fees. Your wallet will check the blockchain to see what is the most recommended fee with the miners.

  4. By only seeing transactions and no personal information

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#747

Homework on Bitcoin Transactions and UTXO - Questions

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

UTXO’s are an account of unspent sum of a transation. They represent the amounts recieved to wallet addresses as positive numerical balance.

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

Your wallet will generate outgoing UTXO’s from any combination of UTXO’s that your private key has access to.
You can draw from the sum of your UTXO balance.

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

Most wallets will calculate an appropriate transaction fee for the network and will be accounted as the difference between the input value and output value of the transaction.
Some wallets allow you to specify the fee you would like to pay.

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

There is no personal information attatched to any of the wallet addresses or transaction information. Only the amount sent and recieved by different addresses can be seen, as well as transaction fees and timestamp.

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#748
  1. UTXO ´s are unspend outputs in the wallet. its the balance you can spent. they emerge from the previous inputs.
  2. the transaction will not be executed. its not valid. you have to generate more inputs so the UTXO ammount rises over the amount you want to send .then send it again.
  3. the fee is calculated by the wallet through and its always the input minus the output!
  4. when there are more outputadresses created. from the outside you cannot see which output goes to the recipient.
#749

  1. Unspent Transaction Output. How a wallet constructs a transaction; inputs & outputs, you can send to multiple people at the same time, including yourself, inputs is where you got the money from, UTXOs are money you have sent to someone that they have not yet spent, you use them to construct new transactions (the are essentially unspent transactions). The blockchain tracks UTXOS, inputs are old outputs from previous transactions. Your wallet asks the blockchain which UTXOs can this private key spend and it will reply with all the BTC you have received. The blockchain doesn’t store your balance only your wallet. Adds up all you UTXOs. You have to spend all your UTXOs every transaction, so the amount you want to spend will go to the thing you are buying and the other part of the transaction will be sent back to you.

  2. The transaction would be rejected.

  3. Your wallet tracks what kind of UTXOS you can spend and calculates the fee to get you into the blockchain relatively fast. It will look at previous fees and decide accordingly to make it worth miners time. UTXO minus UTXO input = fee

  4. you can generate new addresses and send money back to your same wallet but a different address.

#750

Describe what Unspent Transaction Outputs (UTXO) are

  • UTXO are previous transactions held in a wallet, not as a balance but as a potencial to spend;

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

  • The transaction will not be validated by other nodes, so will be declined and then will not happen;

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

  • Fee is the difference between input and output

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

  • Using more input and output addresses
#751

  1. When you send someone coins, this transaction will create an unspend transction output ( UTXO ). This person can now use this UTXO to send the next transaction. The wallet is automatically checking which UTXO´s are connected to the private key and this UTXO´s can be used for the next transaction.

  2. The transaction will fail.

  3. FEE = INPUT - OUTPUT

  4. You can use multiple adresses. Nobody can tell which adress is belonging to you, only by looking at the blockexplorer.

#752

You can always try to combine multiple smaller utxo’s together to cover the amount. (using more inputs) only if the sum of the total amount of available utxo’s doesn’t cover the amount, the transaction will fail

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#753

Most wallets will first try to combine multiple smaller utxo’s together to cover the transaction

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#754

You can always combine multiple smaller utxo’s together to cover the amount if you don’t have any single UTXO that is large enough.

#755

First you can try to combine multiple smaller utxo’s together in your inputs to cover the amount

#756

If You don’t have any single UTXO that is large enough to cover the amount, you can try to combine multiple smaller utxo’s together.

#757

First you can try to combine multiple smaller utxo’s together to cover the amount. Only if the sum of all available utxo’s doesn’t cover the amount, the transaction will fail.

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#758

First you can try to combine multiple smaller utxo’s together to cover the amount. Only if the sum of all available utxo’s doesn’t cover the amount, the transaction will fail.

#759

First you can try to combine multiple smaller utxo’s together to cover the amount. Only if the sum of all available utxo’s doesn’t cover the amount, the transaction will fail.

#760

First you can try to combine multiple smaller utxo’s together to cover the amount. Only if the sum of all available utxo’s doesn’t cover the amount, the transaction will fail.

#761

In 1 transaction, you can send change back to yourself (to another address that your keys can spend) others can’t know wich addresses belong to you.

#762

You can try to combine multiple smaller utxo’s together to cover the amount and send the change back to yourself

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