Homework on Bitcoin Transactions and UTXO - Questions

[Mauro]

@Roel

2. a second (or third etc) UTXO will be used for the transaction

Either that, or a combination of them if they are very small. But you are correct, the wallet will first look if there is another single UTXO large enough to do the transaction. That leads to lower fees, as it takes less space in the block.

[Mauro]

@Roel

3. it won’t. it will specify the output to the accounts and leave a portion open as a fee (the output is less than the input. the fee is the difference between spend and received.

For it to leave a portion as a fee it needs to specify something. It specifies how much satoshi we are willing to give per byte of information we take in a block. This is unit of mesuring is known as satoshi per byte fee.

[Mauro]

Feel free to answer the other questions as well. If you need any help, feel free to DM me. I will try and help you answer them.

[Roel]

But the amount is not mentioned in the transaction. the portion not mentioned in the transaction is in fact the fee.

[permabull]

Hey man! Yes, you’re definitely right! I should have been more specific. Have a good Tuesday

[Mukunda]

Thanks for the clarification / heads up Mauro! I appreciate it!!

[Yir]

Homework on Bitcoin Transactions and UTXO - Questions

1. Describe what Unspent Transaction Outputs (UTXO) are.
   They are out-puts of a block chain transactions that have not spent, can be used as in-puts in a new transactions.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   Your transaction will not go through ?
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   By setting higher fee for the transaction Satoshi per Byte (Sat/B.)
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   You keep your private key secure and safe.

[LoneWolf_Moonboy]

1. outputs from another wallet that you are authorized to use as inputs.
2. you would be declined, essentially.
3. input minus the output. the sum left would be the fee.
4. multiple addresses. no way of knowing if one of the receiving addresses belongs to the sender.

[Storm.chain]

1. UTXO is the unspent balance remaining after the transaction is confirmed

2. The transaction would not be confirmed

3. The fee is calculated from the remainder of inputs minus the outputs

4. Use different recipient addresses for the transaction

[DJ_Wilhelm]

1. UTXOs are receipts from TX inputs your wallet has received, that translate into BTC that you own.

2. You would send the UTXOs that add up to allow you to complete the transaction, then you would make change and send excess BTC back to yourself.

3. Not exact, but UTXO Out - UTXO input = fee

4. You could utilize multiple addresses in order to elongate the transaction chain and make it less apparent how money is being moved around. More important than this, however, is the principle of information security; that is to say, you must not allow your addresses to become personally identifiable, or else someone will be able to track your chain of addresses back, potentially. With this in mind, it is useful to change wallets, if you desire.

[MarcisB]

Thanks for clarifying that! I keep thinking about how to operate with paper wallets.

[enrico]

Homework on Bitcoin Transactions and UTXO - Questions

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

are received transaction that were sent to a wallet which have not been spent yet from the owner of the wallet.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   the wallet will take then 2 or more UTXO big enough to cover the amount and the difference between total amount of UTXOs - amount to spend - fees will be sent to an address of my wallet (in this way the change goes back to me).

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   transaction fee is input - output

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? i could send crypto to my wallet in different addresses in such a way i have many different addresses and is more difficult for someone to link me to many addresses rather than to only one

[sahowe1]

Describe what Unspent Transaction Outputs (UTXO) are.

Each transaction has outputs that are amounts sent to a particular address.
The total UTXO is effectively the balance of Bitcoin,

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

The inputs must match the output + fee, so more than 1 output would be needed and some ‘change’ given back to the the originator.

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

The wallet decides on a fee - the more the fee to quicker the transaction will be added.

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

If privacy is key (It depends how much money need to launder then a transaction could be made up of a large number of addresses all held by the same person, and sent to another set of addresses belonging to the same person.

[PAT22]

1. UTXO’s create a matched output from received transactions covering the required transaction sum plus returns required to spend the full input amount plus fees for the transaction.
2. The input will be created from more than one transaction
3. The wallet specifys a fee that balances a reasonable transaction time and the amount of the fee.
4. Sending multiple inputs to multiple output adresses that are controlled by the same person

[ingute1986]

1. Balance which is output of a previous transaction.
2. Wallet keeps tracking of all UTXOs, and it will sum it up to make a transaction, if it is still not enough, the transaction will not happen.
3. Transaction fee is calculated by input minus output.
4. Create different addresses

[angieww]

1. UTXO are unspent transactions in a given wallet.
2. If there isnt a single UTXO large enough to cover the transaction it will be rejected.
3. the transaction fee in a BTC wallet is specify between the difference Input and Output.
4. Sending to multiple addresses the privacy will increase on the transaction, as isnt possible to decrypt all addresses in the transaction.

[cincinnato]

So just to understand. A wallet with several private keys normally manage them with more seeds (sets of 12/24 words)? Or they can manage with the same seed?

[Roger_Palomino]

Thank you for the correction. I did not know that. Good to see you Mauro since I last saw you on the webinar

[CryptoZen]

1. Money(transaction(s) input) received in a wallet.
2. Transaction would be invalid if not enough total transaction input(s).
3. TX fees not specified in the wallet. Although a fee can be calculated by the difference between the input and the output.
4. Utilize different addresses when receiving bitcoin?

[virgin]

1. This are Outputs are from a previous transaction that are available and have not been spent.

2. The transaction will be declined.

3. By substracting the input from the output.

4. It's mathematically  impossible to know which output went the recipient, to the sender and there can be multiple outputs. That increases anonymity in transactions.