Homework on Bitcoin Transactions and UTXO - Questions

[Hamze_Dirir]

Homework on Bitcoin Transactions and UTXO - Questions

Describe what Unspent Transaction Outputs (UTXO) are.

1. A unspent transaction output is a transaction that you receive, which in turns becomes the total of your balance in your wallet.

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

2. Then the transaction would not go through as you don’t have enough UTXO in your balance to match your UTXO input.

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

3.The transaction fee in a bitcoin wallet is decided by the wallet looking into the blockchain and find a reasonable fee that is quick enough for your UTXO’s to be confirmed into the blockchain by the miners.

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

4. The UTXO’s inputs and output can not be be used to reveal anyone personal information. This means when looking for example on the public ledger there is no way to know if 1 UTXO input with 2 UTXO’s or more outputs on the blockchain, is either 1 person sending the BTC to different wallets, which they don’t have the Private key for, or sending to wallets that they do hold the private key. It’s still is a public ledger for everyone to see all UTXO’s but with no names or I.D attached to any of them.

[DFig]

When a transaction is performed and the UTXO is bigger than the needed output the change goes back to the sender. Is the address for the change going to be the same as the sender if the sender only has one wallet?

[Pkgno1]

1. Describe what Unspent Transaction Outputs (UTXO) are

UTXO’s are what your wallet will check the blockchain for, to see how much you have to spend.

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

Your wallet would check the blockchain for another UTXO your private keys own and make the transaction using multiple UTXO’s if you have them, then send the change back to you as a new UTXO minus a transaction fee.

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

By checking the blockchain to see what other recent fees have been.

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

By using multiple addresses for each transaction.

[Yoruzoku]

Homework on Bitcoin Transactions and UTXO - Questions

1. Describe what Unspent Transaction Outputs (UTXO) are.
- These are user generated transactions to show the availability to spend on the blockchain
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
- It will need to be sum by all UTXOs to see the final balance. if it is bing enough it can proceed.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
- the formular is Input = Output + TX Fees.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
- UTXO has to spend all and do a re-route the balance back to the original wallet

[Diego_BM]

1. Total of the UTXO is the wallet balance, what you send to your self
2. No transaction, It will be declined
3. The difference between input & output = fee
4. using several inputs & outputs different adress for each eceiving tx

[Aaron_Searight]

1. TXOs are processed continuously and are responsible for beginning and ending each transaction.Confirmation of transaction results in the removal of spent coins from the UTXO database.
   2.If a single UTXO isn’t large enough to satisfy the demand of the input amount, then the wallet will use a second,a third, etc until the total is greater than or equal to the amount your sending
2. The wallet checks the blockchain and figures out the correct fee.
3. Several addresses and outputs can result from one input.

[MarkM]

Describe what Unspent Transaction Outputs (UTXO) are.

They are incoming transaction to a wallet.

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

Your wallet would add another UTXO transaction to cover the difference.
If your wallet does not have another UTXO transaction then you would not
be able to make the transaction.

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

Outputs minus inputs= transaction fee.

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

An owner can own more than one input and output address.
Transactions only show wallet addresses without any other
personal information about the owner of the transaction.

[ArtCenter1]

1. Describe what Unspent Transaction Outputs (UTXO) are
-UTXO are the unspent output of previous transaction.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
-It will add up all the UXTO to cover the amount.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
-It uses the recent fee as reference
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
It’s difficult to be sure which output is to actual recipient or to yourself therefore increase the privacy by nature.

[Gabriel_Ng]

1. UTXO are numbers being input into your wallet
2. You cannot spend the UTXO. No transaction will be made.
3. It will send back the remaining money after minus the fees. UTXO minus UTXO input = fees
4. You can have multiple output address which you own

[Steffen]

@ivan

Homework on Bitcoin Transactions and UTXO - Questions

1. Describe what Unspent Transaction Outputs (UTXO) are.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?

it’s all the fractions of BTC-amounts which were received and so far not spent.
appropriate UTXOs will be combined (like banknotes) to yield the sufficient amount of BTC one would like to spend.
So the UTXOs will be smartly combined that the change is minimal.
The change of the excess BTC will be credited again to the senders private key (loop).

UTXOs will be combined

Input-Output=Fee

You can have multiple output address which you own

[Kornel]

@ivan

• Describe what Unspent Transaction Outputs (UTXO) are.

UTXO = Unspent Transaction Outputs which are transaction data that were created from previous transaction. The sum of the total transactions in UTXO in a wallet is ones balance. Every UTXO can only be spent once. At that point, the UTXO is no longer unspent, meaning that it cannot be used again in the future.

@ivan

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

The transaction would be denied as the requirements are not met.

@ivan

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

Transaction fees are the incentives for miners to mine blocks. Transaction fees can be easily calculated by subtracting transaction input from output. These fees can be manually adjusted, higher fees means faster transaction and vice versa.

@ivan

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

This can be easily done by increasing the number of output transactions, since transactions address holds no personal information. Also generating new addresses for receiving transactions in wallet would increase privacy.

[Tristan01]

1. UTXOs are STXOs from another wallet which can be tracked by my private key/wallet, I can transform them into STXOs by spending
2. No valid response after my wallet broadcasts the transaction to the nodes
3. It compares previous transaction fees and gives a suggestion what minimum of amount could be enough to be considered fast by a miner
4. By creating more output addresses

[Mauro]

@scornkrypto

1. Describe what Unspent Transaction Outputs (UTXO) are.
   These UTXO’S are remaining unspent outputs from a transaction that very small amounts that are not enough to spend alone in a new transaction.

UTXO’s can be small and large. A sum of UTXO’s determine the balance you can spend.

@scornkrypto

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   This would be based on the total number of inputs that are compiled together to equal the output.

A fee would be the difference between the total inputs - total output. The wallet specifies the fees by looking at the current and previous transactions on the blockchain.

[Mauro]

@CryptoTube

3. The wallet would do this by working out the difference between the input and output.

@Edward_Valencia

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

@wfells

3. Its the difference between the input and the output

@Falkon

3. The fee would be exactly the difference between the input sum to the output sum.

@Ziheng

3.It would be the input minus the output

@Andrewgaven

3 The wallet subtract the input UTXO with the output UTXO

@rodz

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

@CeesQ

Outputs - inputs

@Mercury

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.

@ToMMaaY

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

• The fee is calculated by Outputs - Inputs

Don’t forget that the wallet still needs to calculate how much it needs to set the fee to. It does this by adjusting a unit of measurements called “satoshi per byte”.

[Mauro]

@Crypto_James

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

The transaction would not go through if you didn’t have sufficient funds to cover the transaction.

@wfells

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

@Falkon

2. The nodes will not approve the transaction request.

@Ziheng

2. No transaction

@devalmar

There will be no transaction, as the nodes will not confirm it.

@Picard

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.

@kidsmoney

2.just like in bank account if you don’t have money check will bonce.

@Andrewgaven

2 Your wallet won[t do anything

You could have a sufficient amount if you combined several UTXO’s. Otherwise the transaction would be invalid.

[Mauro]

@Eric_Toronto

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.

You can see transactions in bitcoin.

Example; https://www.blockchain.com/btc/tx/f62075f68d0f6965406c8fea58833ce50dd3d8ec730ef524a5f6fb7fe0b357a1

Let’s assume I know that you own the address on the left side, and I can see that you send some bitcoin to those 2 addresses. With this kind of transaction I can easily assume that you still own 0.57877602 BTC. (It could be vice versa, but the probability is that you spend less and kept most of your bitcoin) In order for this transaction to be more private it would have been better for these 0.57877602 BTC to be separated into several addresses that you still own. That way I would no longer be sure which addresses you still own and which you don’t.

[Mauro]

@wfells

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

@rodz

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

If I connect your identity with a public address, is there anything you can do to make yourself more private again?

[Mauro]

@kenn.eth

2. 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.

If the address has multiple UTXO’s it will combine them to make a larger enough transaction. Every UTXO should be able to cover the fees, unless we are talking very low satoshi numbers.

@kenn.eth

3. 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

Blockchain.com Explorer | BTC | ETH | BCH

Check the fee under the input. It is specified as follows:

0.00090000 BTC
(235.602 sat/B - 117.493 sat/WU - 382 bytes)

The fee is the difference between the total input and output. But the fee is still specified by the wallet using a unit of measurement sat/B. (satoshi per byte)

[Mauro]

@devalmar

4. It can use different UTXOs

We would use more than 2 outputs. This would make you more private as we would not longer be sure what addresses you still own and which you don’t.

[Mauro]

@Picard

Therefore, the fee is assumed.

Wallet’s don’t assume what fee to set. They take a look at the current competition.