Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#1247

  1. Unspent Transaction Outputs (UTXO) are bitcoins received by a user before the user initiated a transaction. When the user creates a transaction, the total amount of all UTXOs at that instance becomes the input of the transaction.

  2. UTXOs of different amounts can be combined to fund a transaction to another party. As long as the total amount of UTXOs is enough to cover the intended amount to be sent plus the estimated transaction fee, a transaction can be successfully created; otherwise, the transaction will be unsuccessful.

  3. A bitcoin wallet will estimate the transaction fee by evaluating statistically how much would be needed for miners in the past to verify a similar transaction. The transaction fee will be shown as the difference between the total input, that is the sum of all UTXOs, and the total output of a transaction. If the transferred fund and the transaction fee together are greater than the total UTXOs, the remainder will be send back to the sender as one of the outputs.

  4. The amounts and addresses of all transaction inputs and outputs are encrypted so that the senders, recipients, and amounts of transactions are practically anonymous to a third party. Moreover, the balance of a bitcoin user is calculated by the wallet at any given moment from the total UTXOs of previous transactions. Tracing of total amount of bitcoin transferred out to other parties is also impossible, because the total outputs include bitcoins sent anonymously back to the user’s own account addresses. Therefore, even a user’s bitcoin balance is hidden from other people.

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#1248

  1. bitcoin that has not been spent by the reciever

  2. It wont send nor would it allow you to spend that amount.

  3. Its the difference between the input and the output

  4. There isnt a name or identity attached to the hash nor transactions. just private keys

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#1249

.1 A UTXO is a sum of currency on a users address that the user did not deplete yet.
2. The nodes will not approve the transaction request.
3. The fee would be exactly the difference between the input sum to the output sum.
4. By using a few address or outputs there will be limited traceability of the transaction details.

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#1250
  1. UTXOs can be summed to show your available balance.
  2. No transaction
    3.It would be the input minus the output
  3. Have multiple outputs in a transaction, or simply use a different address to receive funds.
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#1251
  1. Describe what Unspent Transaction Outputs (UTXO) are.–their total represents the amount of spendable asset available in the wallet
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?since it is the total of all your utxo"s not a single one that determines if there is sufficient funds for the Tx and fees- if only one utxo is available for the transaction then this Tx will not happen
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?- some will allow you to specify the fee others will choose based on what it takes to get it done and this will be reflected in the difference between the input and the output of Tx
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction? by increasing the number of output addresses you will make it difficult to be tracked
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#1252
  1. Describe what Unspent Transaction Outputs (UTXO) are.

Unspend transaction outputs are spend transactions coming from another address to a new address. Is the collection of incoming transaction to an address that havent been spend. UTXO is what really compose the balance of an address

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

It can be awaiting for others UTXO in order to sum that minimum balance to send a transaction with the required fee. But is not a fact, because transaction fee is variable, can be lower or higher depending on the production of bitcoins and the mining rules set. A UTXO that is not enough to cover transaction fees, can also be send but will be awaiting for a miner to pick that transaction, or stack forever because the transaction fee will not be that lower. In this case the protocol will be favored from an amount that will never be spend.

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

The transaction fee is not directly specified in a transaction, is deduced from the sustraction of the UTXO sum less the amount you want to send

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

This is very useful for privacy because you can never know who is really the owner of the addreses your sending to. You can be benefited from this by sending a UTXO back to an address you also own.

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#1253
  1. Its money someone sent you that you haven’t spent.
  2. Then you can combine.
  3. It estimates a fee that’s appropriate measure of speed so a miner picks up in a formidable time frame
  4. You could send yourself a bunch of small amounts within the same transaction you’re trying to cover up sending someone else some moola.
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#1254
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXO are linked to your private key.
Each UTXO represents an amount of bitcoin that someone sent you.
Your wallet sums up all your UTXO to tell you your available balance.
When you send someone bitcoins, you are effectively sending one or more UTXO.
After you have sent someone UTXO: your UTXO becomes spent and the recipient receives UTXO

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

All the UTXO linked to a private key are summed up by your wallet to form the balance for that private key.
If you don’t have a single UTXO large enough for a payment, the wallet combines several of your UTXO so that the amount matches (or is greater than) the amount required for the transaction.

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

The bitcoin wallet looks at the current network situation and suggests a transaction fee that is fair for the miners to process the transaction in a timely manner.

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

When you send bitcoins (transaction output), you could send them to another address that you control and it would be difficult for others to tell.

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#1255
  1. These are basically the transactions you receive and the wallet than can calculate your balance.
  2. There will be no transaction, as the nodes will not confirm it.
  3. It will check with the Blockchain and give you a transaction fee.
  4. It can use different UTXOs
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#1256

Describe what Unspent Transaction Outputs (UTXO) are.
It’s basically your wallet balance. After a successful transaction, a new UTXO is created to reflect the total value that you can spend or use as inputs.

What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
Nothing, transaction would not go through. Go or no go scenario.

How would a bitcoin wallet specify the transaction fee when creating a transaction?
Basic Formula: Input-Output= Fee. Therefore, the fee is assumed.

How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You can send an output to an intended address and recipient, and another portion to another address (that you own). The more inputs & outputs with different addresses increases anonymity.

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#1257

1.they are inputs of money that have not been spent.
2.just like in bank account if you don’t have money check will bonce.
3.looks for amt of fees that got on block chain or difference in tx an remainder in wallet.
4.have other addresses you own.

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#1258

1 UTXO are the unspent balance of previous transactions.
2 Your wallet won[t do anything
3 The wallet subtract the input UTXO with the output UTXO
4 You can use multiple output, and create a new wallet for every transactions received.

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#1259

Homework on Bitcoin Transactions and UTXO - Questions

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    The amount of total Inputs that have been received that are ready to be spent.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? Inputs are combined to create a sum equal to or greater that the amount needed to cover the transaction. The wallet sends the amount due and the remainder is sent back to you.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The fee is difference between the input and output.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Create or generate new addresses frequently.

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#1260

Mauro, thank you for the feedback and more explanations.

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#1261

The outputs from a bitcoin transaction that are unspent.

The transaction would get rejected, unless you have other UTXOs that can cover it, i.e. a UTXO balance that’s large enough to cover the transaction.

Outputs - inputs

by using different output addresses from a single input address

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#1262
  1. Describe what Unspent Transaction Outputs (UTXO) are. - Unspent transaction outputs are what make up your ‘balance’ inside of a wallet or exchange. They are inputs waiting to be spent by the user.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction? - When this happens your wallet will look for all available UTXOs, regardless of size, until it has enough funds to approve your transaction.
    3.How would a bitcoin wallet specify the transaction fee when creating a transaction? - The wallet will calculate the fee by finding the difference between the input and outputs.
  3. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?- By owning multiple accounts and sending money to those accounts at the same time you sent money to another person, you are able to disguise who is receiving your payment.
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#1263
  • Describe what Unspent Transaction Outputs (UTXO) are.
    • UTXO are unspent amounts that your private key is able to send.
  • What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    • If you have more UTXO that can cover the transaction then it will use more or else it will get declined.
  • How would a bitcoin wallet specify the transaction fee when creating a transaction?
    • The fee is calculated by Outputs - Inputs
  • How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    • You can use many inputs and send to many outputs to disguise your transaction by sending some outputs back to yourself so that it will be hard to tell how much you sent and which addresses you sent it to.
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#1264

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

In the anatomy of of transactions Inputs and Outputs are comprised. Inputs are the old transaction of outputs. All transactions have inputs and outputs except, the Coinebase. The Outputs of transaction are the UTXO (unspent) in a ledger, until they are spent by their receiver, who owns the private key. The blockchain tracks which output tx are unspent UTXO. This state allows every user in the network to keep track of who owns the right to spend BTC.

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 not satisfy the demand to cover input transaction to be spent, then the software of the wallet collects other UTXOs assigned to the wallet adress, until the sum total, is equal or greater than the demand of the spending. If the sum total of spending is greater than the required transaction, the Wallet spends all the amounts completely. The difference will be sent back as a “change”, to the adresse of the wallet as a newly created UTXO. You can’t divide UTXOs into fractions. In BTC protocol it must be spent as whole completely.

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

You can’t specify transaction fee by yourself. Many hardware and web-based bitcoin wallets already come with built-in fee calculators, which can manage all the work. Transaction fees are already included in Inputs. (output - input = fee).

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

Using multiple output adresses as well as sending back to your adresss can disguise and guaranty privacy

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#1265
  1. UTXO’s or Unspent Transaction Outputs are the balance of your bitcoin wallet that you have received and not yet spent from your wallet
  2. If you have no UTXO’s, then it’s no transactions…
  3. The wallet would need to access the blockchain to gauge the latest miner’s fees, once
    determined, the wallet would minus the transaction fee from the UTXO.
  4. By generating multiple output addresses increasing anonymity.
#1266

  1. UTXOs are the unspent outputs from previous transactions.

  2. The transaction would fail and not be valid on the blockchain.

  3. The fee is calculated by all inputs minus the outputs of a transaction.

  4. To increase privacy in transactions you can use many different inputs and outputs.