Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#863

Describe what Unspent Transaction Outputs (UTXO) are.

The sum of all input transactions to a single private key registered on blockchain, minus the already spent on outprut transactions

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

Transaction will be refused by the network.

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

Often it calculates an average fee from the blockchain and suggest for the transaction.

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

By sending remaining funds to yourself, or to another public key controlled by the same private key.

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#864
  1. UTXOs is the amount of leftover cryptocurrency change you receive from each transaction.
  2. If you have other UTXO amounts in your wallet, they can be added together to create an amount that’s enough for your transaction. If there is change left over then the network will create two new UTXO’s. One for the transaction amount and one for your change. If an transaction fee is involved two UXTO’s would be created one for the transaction value and one for the change left over minus the transaction fee.
  3. Transaction fees are the inputs minus the outputs. Some wallets will calculate the appropriate fee for your transaction taking into account current network conditions and transaction size. Also, some wallets let you customize your own fee. You should be careful in customizing your own fee because if it’s too low it could cause your transaction to be unconfirmed for a long time and possibly be rejected.
  4. Use a different address for each transaction and never use it again. Avoid AML/KYC and giving your address. Use a wallet backed by your own full node, or client side block filtering. Broadcast on chain transactions over Tor. Use Lightning Network as much as possible or use a wallet that implements mixing. Avoid creating change addresses instead use the entire UXTO.
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#865

1- A UTXO is a transaction that has previously been sent to an address but not yet spent, meaning it is available to be used as an input for a new transaction
2- the wallet will combine all UTXOs to cover the transaction and then send back the unused amount back to your address
3- the wallet will read the blockchain to check the most recent fees to give you a fee it thinks will get your transaction onto the blockchain in a decent amount of time
4- you can change the address to a new address which is still linked to your private key

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#867

Ahh ok I got this wrong. Thanks for update.

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#868

  1. UTXOs or unspent transaction outputs, is parts of your complete balance. Sum UTXOs = X Balance, in this case your balance is X. So in other words when you want to make a transaction/purchase you spend UTXOs in storage.

  2. If you try to spend UTXOs without having any, the ledger and all the nodes (with a copy of the ledger) would simply deny your transaction.

  3. The transaction fee is chosen/calculated automatically in most wallets, meanwhile in some wallets you can pick one yourself. The formula for this is [UTXO - UTXO input = fee]

  4. You can have several adresses for your transactions, yet they still go to your wallet. This way you will remain secure even though the whole network itself is anonymous already, overall having different inputs and outputs for every transaction, in my opinion is a bit of an overkill.

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#869
  1. “Receipts” of data accrued not yet decreased, in Bitcoin the data would be records of currency received that has not yet been sent or spent.
  2. Multiple UTXO would be used to cover the transaction, the remaining difference is returned like change when using “cash”. If not enough UTXO to cover the transaction, the transaction is ignored (considered invalid).
  3. UTXO - outputs = TX Fee
  4. Multiple UTXO to multiple outputs and addresses.
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#870
  1. UTXO are the balance left in your wallet.
  2. The transaction will be declined.
  3. The wallet would connect to BC database and figure out correct fee.
  4. Use a different address for each receiving transaction.
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#871
  1. It’s practically your balance you can spend. It’s a sum of transactions accomplished in your favor.
  2. You won’t be able to make a transaction, there has to be at least one input to make a transaction.
  3. Fee is the difference between the inputs and outputs.
  4. By using several addresses.
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#872

  • Describe what Unspent Transaction Outputs (UTXO) are.
    These are inputs from the network to your wallet which have not been spent. In other words, they are coins to be spent.

  • What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    You could not continue with the transaction.

  • How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It calculates the fee being the difference between the input and the output transaction.

  • How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You could create an output address which directs back to your wallet.

See answers above.

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#873

  1. Unspent Transaction Outputs are inputs to your wallet that you have not spent yet.

  2. If there is not single UTXO large enaugh for the transaction, other UTXOs will be used also. If there is not enaugh balance in all of the UTXOs, the transaction will be invalid.

  3. The wallet queries the blockchain and chooses a fee, that is large enaugh to cause the transaction to go through in reasonable time.

  4. When a part of an UTXO is sent back to the sender, different address is used. Then the amount going back to the sender can only be estimated.

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#874

  • Every transaction in the blockchain have an input and output, UTXOs is the output which is your left over balance from the last transaction, since all inputs must be used, the leftover balance are to be sent back to yourself (same address) and use as an input for your next transaction. For every transaction input must be equal to output + transaction fees.

  • Since the funds are send out from your wallet, your wallet check all the UTXOs it has, if there are more than one UXTOs for the wallet, your wallet will send the fund using more than one UTXOs as long as they are equal to or more than the funds you want to send after fees.

  • BTC wallet usually go back to the last transaction on the blockchain and propose a fees. You can also select a fee for some wallet, however if the fees are lower than the fees on the blockchain, your transaction may take a long time to process.

  • You can change a different wallet address everything you make a transaction by sending the money you don’t want to spend to another address of yours, so the start of every transaction is a new address. For example, if you have 1 btc, and you need to send .5 to your mother and .25 to your brother and keep the (.25 - fees). You can send .5 to your mother’s btc address, .25 to your brother’s btc address and the rest (.25 - fees) to another btc address that you own.

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#875

Describe what Unspent Transaction Outputs (UTXO) are.
Blockchain tracks UTXOs. UTXO = Unspent Transaction Output.

  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Wallet will sum all UTXO in your Private key to see if you have enough. Error if not.

  2. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Fee = difference between input minus output calculated automatically (generally)

  3. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    If you setup wallet to always generate new address then hard to track which output goes back to sender.

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#876

  1. They are the actual “Bitcoins”. They are the inputs to your wallet (private key) and add up to the balance you have available to spend.

  2. Inputs must equal outputs so the transaction would not be valid.

  3. It looks as the most recent transactions and provides a close estimate of what it will cost to get your transaction into the block.

  4. By sending BTC back to yourself; by making one or more of the outputs an address that you also control.

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#877
  1. UTXOs are the outputs you recived from another wallet that are not spent.
  2. well you can send another utxo to that wallet so the combined value will be enough.
    3.input-=output+trx fee
    4.yo ucould send a utxo to another account that you own and keep sending the transactions around your wallets and in different increments?
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#878

  1. A transaction that has yet to be used as an input in a new transaction but that is stored in the blockchain as an output.

  2. Your wallet will query the blockchain and see if it can combine multiple utxos in your balance to make up for it.

  3. Inputs = outputs + tx fee so tx fee = inputs - outputs

  4. You don’t know who control the wallets of the adresses you send to so you don’t know as an outsider what output goes to whos wallet and you can have several inputs and outputs in one tx.

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#879

  • Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO’s are are essentially your wallets balance, they are the output that is left over from previous transactions.

  • What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    If the UTXO’s cant be verified by the nodes then the transaction would not complete.

  • How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It would check the last transactions and propose a fee based on previous ones.

  • How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You could request the transaction goes back to another wallet, or you generate a new wallet.

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#880

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    The total of all transactions received into the wallet.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    It would use the total of all received utxos if large enough or if not the transaction will be invalid.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It will specify a fee based on recent fees.

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

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#881
  1. basically, they are the balance of a blockchain address - the balance does not exist as a value on the blockchain, but is calculated as the summary of all utxo (unspent tx output) = amount of btc i received but did not spend yet
    2)then i have to use one (ore more) additional utxo that cover for the tx (incl. fees) and the amount that is left goes to an address i control
  2. the wallet deducts the fee from the the output btc-value, so it matches the input-amount. it calculates a dynamic fee which it considers as the appropriate fee for the transaction, depending on temporary network conditions and transaction size.
    4)as we can review all transactions on the blockchain, there is no absolute privacy. but we can make it more difficult to track to use different output addresses and create a new address in the wallet for every receiving transaction. (as i.e. hw wallets like ledger nano do)
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#882

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

  • is the amount of available BTC that you have for spending, basically your balance.

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

  • you would not be able to transact.

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

  • it will query the blockchain and based on what is out there, is will propose what is the best fee.
  • in some wallets you are able to choose a lower or higher fee and that will determine how slow or fast your transaction will be made available in the blockchain.

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

  • by creating multiple public keys based on the same private
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#883

  1. unspent Transactions & utxo are the money within your wallet available for you to spend on the bloackchain.

  2. if you don’t have enough to cover your transaction. Your transaction will not be put on the blockchain for having insufficient funds.

  3. the btc wallet will specify the transaction fee by subtracting output from input to come up with your transaction fee.

  4. you can send multiply address from your wallet creating many different block chains therefore harder for anyone to track your spending habits