Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#1026
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Unspent Transaction Outputs are the input transactions to an address that have not yet been spent.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    If a single UTXO can’t cover a transaction, then multiple UTXOs will be used to cover the total of that transaction.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    A bitcoin wallet can specify the transaction fee by defining the amount of UTXO that goes back to the user; another wallet that he controls.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    By having multiple addresses, I can increase privacy in my transactions by including another of my addresses in a transaction.
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#1027
  1. UTXOs are unspent transaction outputs. All UTXOs summed up in a wallet are the total of BTC the private keyholder can spend.
  2. The transaction is not accepted by the miners and will fail.
  3. It is specified by the input - the output.
  4. To increase the privacy of a transaction, the output could be split and send to multiple addresses.
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#1028

Thanks for the clarification Mauro, will look more into it! :+1:

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#1029

Describe what Unspent Transaction Outputs (UTXO) are.
Answer: UTXO are one or more amounts deriving from one or more inputs to a transaction after the transaction
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
Answer: There may be one of more inputs and one or more outputs to a transaction. If the total of inputs is larger than the outputs then the transaction will go through.
How would a bitcoin wallet specify the transaction fee when creating a transaction?
Answer: The transaction fee is derived from the candidate transactions in the mempool. Miners will be able to choose the transactions that are most favorable.
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Answer: Output can be sent to multiple addresses as well to back to same input. No one knows except the private key owner.

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#1030

Homework on Bitcoin Transactions and UTXO - Questions

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

They are the unspent credits to your wallet. Remeber there are no coins in the wallet it only records the “debits and credits”.

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

It will not be validated.

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

Preferably one would specify the price themselves otherwise its inputs-outputs

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

Break it up over multiple transactions to and through multiple keys you control.

The chain just knows it went to (x) address it doest know who owns (x) address.

#1031

1- The output from a transaction that can be spent as input for a new transaction

2- The transaction would be rejected

3- The fee is calculated by the wallet by the difference in input minus the ouput

4- You can send in numerous inputs and outputs for transactions so it is spread out

#1032
  1. Unspent Transaction Outputs are a collective ledger/account of the bitcoin that you “own” (i.e. have the right to transfer via your private key).
  2. You could not complete the transaction as you need to spend all the UTXO in every transaction.
  3. It would do it automatically by deducting it out from the overall transaction cost (i.e. it would pay the vendor and then remit back to you a slightly smaller amount of BTC.
  4. You could use many different addresses for receiving the BTC.
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#1033
  1. UTXOs (unspent transaction outputs) are all the BTC payment transfers your wallet has received in the past.
  2. If you don’t have a single UTXO to cover a transaction, your wallet will combine UTXOs and spend the combined amount (if there is spare change, it will appear as an output that gets returned to sender)
  3. Wallets will automatically determine a transaction fee that is high enough to ensure it that the UTXOs gets mined quickly into a block (or the wallet owner can set his own fee).
  4. To increase privacy, you could transfer UTXOs in your wallet to other BTC addresses that you own
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#1034

They are list of transactions that aren’t in the Blockchain yet.

Transaction will be void, if and when the total sum of all the UTXOs isn’t large enough as well.

It would recommend a minimum fee amount /an appropriate fee, but with certain wallets the fees can be changed.

Using unique addresses everytime.

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#1035

  1. UTXO are the transactions that have been sent to the person’s wallet, which is found on the blockchain. These transactions have yet to be spent and can only be spent with the private key where it was sent. UTXO is the balance a person has in their wallet.

  2. No transactions can occur if you don’t have any single UTXO.

  3. The bitcoin wallet will specify the transaction fee as the input minus the output. Sometimes you choose and sometimes the wallet chooses based on the information from the blockchain.

  4. Set up different addresses to send funds so there would be increased privacy.

#1036

  1. Unspent Transaction Outputs (UTXOs) are transactions that you receive as input from family members, for example. Those same amounts of bitcoin your family send you are their output and your input. Later, you use those transactions as output and, say, send them to a friend or neighbor. So UTXOs can send money to several people at one time; sometimes some of it might be sent back to you.

  2. If you don’t have any single UTXOs that are large enough to cover for your transaction, you would be unable to make the transaction that you want to make.

  3. When creating a transaction, a bitcoin wallet would specify the transaction fee by finding the sums of both the input and the output; then it would subtract those two sums from each other. All inputs must equal the outputs + the transaction fee. Otherwise, the fee is never specified.

  4. You could use the notion of transaction inputs and outputs to increase privacy in your transaction by creating various private keys that no one can use.

Sometimes I end up looking at other people’s answers to find out answers to the questions I have trouble with. I should not do that; it’s cheating. Forgive me for it. Thanks.

#1037
  1. An UTXO is basically the inputs you can spend pointing to your wallet.
  2. It will construct an input which is the sum of all your UTXOs
  3. The transaction fee is calculated as the wallet’s UTXOs input minus the UTXOs output
  4. Use a different address for each input transaction
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#1038

  1. UTXO are outputs that a user owns in their wallet and is available to spend in a later transaction. Your private key will call out to the blockchain to verify how much cryptocurrency is available to spend. Your “wealth” is the sum of all previous UTXOs in your wallet that are available to use.

  2. The transaction would be invalid and more UTXOs will be needed to successfully complete the transaction.

  3. Fees = Difference between transaction inputs and transaction outputs.

  4. Always generate a new address for each transaction.

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#1039

  1. UTXO are the sum of your inputs in your wallet.

  2. You have to spend everything. If you want to buy something for 1.5 BTC and your inputs are 0.7 + 1.3 BTC, you send 1.5 BTC as payment and 0.5 BTC ( SUM – PRICE ) back to an address that you control.

  3. You can either specify it yourself, or get proposed a fee based on previous fees in the blockchain to get you into the blockchain fast enough.

  4. Use many inputs and outputs. Use new addresses for every transaction.

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#1040
  1. The sum of all inputs I have ever received and which I haven’t spent yet.
  2. My transaction will be ignored / dropped
  3. It will ask the user to specify what priority he decides to give his transaction (high, normal, low) as higher fees incentivizes miners to process this transaction faster, and according to that priority level calculate the fee amount.
  4. I can often change my public bitcoin address to receive inputs and not use the same address twice. For the output side, and for receiving in return the change of a transaction I can again generate new addresses every time I make a transaction.
#1041
  1. A UTXO is the output of a bitcoin transaction that is unspent in the sense that it has not yet been used as input to another subsequent transaction
  2. Several UTXOs will be combined, and if the combined total of all UTXOs is also not sufficient then everything will be returned to its original state except for the fact that the transaction fee will still be paid.
  3. The wallet will survey recent transaction amounts on the blockchain and then choose an amount that allows for reasonably fast blockchain access. In this context it helpful to understand that miners always aim to add to their blocks the transactions with the highest attached fees because the miners are the ones who collect those fees. So the transactions with the highest fees attached will typically be processed most rapidly, and a wallet will therefore choose a transaction fee that is high enough to limit the processing time and low enough to be affordable.
  4. Since it is impossible to tell from the outside who controls the addresses with which UTXOs are associated, there is no way of telling what part of a transaction went to a receiver and what part went back to the sender. In particular, it is possible for senders to transfer coins exclusively to themselves and to thereby create the false impression that funds were spent when in reality they were only relocated. Thus bitcoin funds are inherently difficult to track and privacy therefore is high.
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#1042
  1. your wallet balance that becomes an input when a new transaction is initiated
  2. your transaction will be ignored
  3. input - output = fee
  4. use several output addresses, some of which may direct back to you
#1043

  1. UTXO or unspent transaction outputs is transactions that have been received from elsewhere (input) that is yet to be spent

  2. You could combine it with other inputs sufficient to make up the transaction, otherwise no transaction can occur

  3. The wallet automatically calculates the fee based on the current mining stats, some wallets allow you to choose a higher fee for faster transaction processing

  4. transaction privacy is secured by private key signature which wallet performs

#1044

  1. UTXOs are in the transaction in put before the point they become outputs.

  2. Either the transaction won’t go through or you will use more than one UTXO.

  3. The transaction fee is the difference between the input(s) of a transaction and the output of it.

  4. Create a transaction where funds ultimately end up in a wallet different from the initial address used

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#1045
  1. Unspent Transaction Outputs (UTXO’s) are outputs that are received in your wallet from inputs of another wallet, and used as a means of recording your balance. These UTXO’s are received inputs from another address and act as ‘funds’. This is the sum of whats available in your wallet to ‘spend’.
  2. Your transaction would not be valid. It would not occur because you do not have the correct balance needed. (inputs = outputs + tx fee)
  3. TX fee = Input - Output. Most wallets auto-suggest a tx fee based on previous similar transactions. But you can also create your own based on the speed at which you want it to enter the blockchain.
  4. You could break up the transaction into smaller portions and using several addresses send out fractions at a time. You can use multiple addresses to tumble them through, creating a larger trail as well as the appearance of many people involved. You can create different addresses to send and receive from within one wallet, keeping each sending and receiving address fresh from any previous transactions.