The wallet usually specifies the fee for you. It has to set a unit of measurement called “satoshi per byte”. Some wallet allow you to set this by yourself.
But if I know your address and you send your bitcoin to 10 other addresses it will be difficult for me to know which ones you still own and which you don’t. I can always be safe and assume you own all of them. But that’s probably not true. Even thought I can connect your personal information to an address somehow, I can still be unsure sometimes.
Right! I could fake someone out, but wouldn’t that increase the total transaction fee and so be unprofitable? 
1 Like
Hi sergey! The UTXO is the unspent transaction amount, that you can use as input to make a transaction. So, for example, if you only have an UTXO of 1 BTC, and you want to send 0.5 BTC to a friend, and pay 0.001 BTC as fees to the miner, then you will have 1 input of 1 BTC and 2 outputs (0.5BTC to your friends address, and 0.499 BTC back to your address). The fee will be the difference between inputs and outputs. The 0.499 BTC becomes a new UTXO you can use for later.
Hope this makes sense!
Felipe.
1 Like
- Unspent Transaction Outputs (UTXO) are the transactions that have been sent to your wallet and can be spent by your private key.
- If you don’t have a single UTXO that is large enough to cover your entire transaction, multiple UTXO’s are combined and the transaction amount is sent from the sum of these UTXO’s, with the remainder being sent back to you at an address you own (minus the transaction fees).
- Wallets don’t specify the transaction fees explicitly, but they are implied by the difference beween the UTXO total and the amounts being sent out to your recipient and yourself.
- To increase privacy in your transactions you can send multiple amounts to your own addresses so that the main transaction amount is obscured.
1 Like
Homework on Bitcoin Transactions and UTXO - Questions
- Describe what Unspent Transaction Outputs (UTXO) are.
They are the value of currency are in your possession on the ledger. Your Wallet has the private keys that will give you access to your UTXO’s. - What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
Your wallet would allocate another UTXO to cover the transaction then the remainder would be sent back to you. - How would a bitcoin wallet specify the transaction fee when creating a transaction?
It would select a fee that is going to get your transaction processed by the miners in a reasonable amount of time. - How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Because you don’t know, looking at a transaction from the outside, which output is going to a recipient or if it is being returned as change.
1 Like
Hi there!! And how is this fee specified, related to inputs and outputs?
Hello,
Input = output + fee
1 Like
Homework on Bitcoin Transactions and UTXO - Questions
- Describe what Unspent Transaction Outputs (UTXO) are.
Unspent Transaction Outputs are ledger entries on the Blockchain containing transactions that result in funds available under a particular private key. - What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
If the amount in a single UTXO is not sufficient to cover the transaction, the wallet will continue to query/look for additional UTXO’s with the same private key until the combined funds is sufficient to cover the transaction. If the combined total funds available is less than the transaction amount, the transaction will be denied. - How would a bitcoin wallet specify the transaction fee when creating a transaction?
The bitcoin wallet estimates the transaction fee based on a previous fee. The fee is the difference between the total UTXO inputs and total UTXO outputs for that transaction. - How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Because all the UTXO’s under a specific address must be spent, the blockchain generates a new address for any remaining balance that goes back to me, obscuring which address belongs to me. Also, because I can send funds to multiple addresses, I can send to a different wallet address that I own and no one can tell from the entries on the blockchain.
-
UTXO is a record (on the blockchain) of the fund that the one controlling the paired private key can spend. One private key can spend many UTXOs, by making them the inputs of a transaction it creates and signs (in the wallet).
-
My wallet will add up my UTXOs to the closest sum of inputs necessary to cover my transaction (fee included). Since the ‘change back’ function doesn’t exist, I can solve this by making myself also a recipient of the transaction, in order to receive the difference after all expenses (outputs+fee) are subtracted.
-
A bitcoin wallet does not specify the TX fee, the fee is implicit by showing that the sum of the inputs is larger than the sum of the outputs, i.e. TX fee = SUM (inputs) - SUM (outputs).
-
By making myself a recipient, of my transaction, using a different BTC address that I control, i.e. that I control the paired private key to, in order to spend its UTXO/fund. This might increase your privacy, but it will not give you anonymity (not today).
1 Like
-
UTXO’s are the unspent transaction outputs assigned by the network to a bitcoin address.
-
If an address did not have any single UTXO’s large enough to cover a transaction a person or wallet software would construct a transaction using enough UTXO’s to cover the transaction and return the remaining balance to an address owned by the transactor, minus the miners fee.
-
Bitcoin wallets sometimes have options for selecting fees, but generally wallets select automatically based upon fees spent in a number of the networks most recent transactions. Ideally the fee is no more than is required for the miners to confirm the transaction promptly.
-
Transaction input and outputs could be used to obfuscate transactions by distributing transaction amounts to multiple address at the same time. A payment could be broken into multiple smaller payments and sent to address all owned by the recipient with some returned to other addresses owned by the sender. I am sure there are other more sophisticated methods already…so im off to learn some more…
so if the input is for example 0,5 bitcoins, and I decide to send 0,4 what is the fee then. what if you send all received coins
1 Like
-
UTXOs are unspent inputs available to spend, they can be compared to an account balance. When someone sends funds to you, they become “unspent transactions”, and all of these UTXOs added together create the total funds available for you to spend.
-
Your wallet will choose from your available UTXOs to create a sum large enough to complete your transaction.
-
Your wallet can show you available transaction fees to choose from, or it can automatically choose a fee that will allow your transaction to get chosen for inclusion into a block within a reasonable amount of time. Your transaction fee will also show up as the difference when you subtract your output amount from your input.
-
You can increase privacy in your transaction by dividing your transaction between numerous addresses, some of which may be controlled by the sender. This can obfuscate the total amounts of currency being sent to specific recipients.
1 Like
I’m not certain if this pertains to your specific question, but transaction fees can be a bit arbitrary. Miners get to pick and choose which transactions they wish to include in a block, and they like to choose the ones paying the highest fee because they get to keep those fees. In my understanding, if you do not have available funds to cover any of the transaction fees available your transaction will be rejected. According to the article below, if you have no available funds to pay transaction fees you will wind up at the very end of the line, or even completely ignored and therefore rejected.
Here’s an article I found while trying to understand this lesson better:
1 Like
thank you I will check this article, much appreciated. Am just trying to understand the equation Input=output + tx fees.
4 Likes
Love the article, made sense. Thank you
3 Likes
That’s how I found that article, I had a difficult time trying to understand that same comment so I paused the video and went to google for help 
2 Likes
1.) Describe what Unspent Transaction Outputs (UTXO) are.
-UTXO’s are assigned transactions left in the control of particular wallets verified only by the trustless
blockchain.
2.) What would happen if you don’t have any single UTXO that is large enough to cover for your
transaction?
- Transactions that are not valid cannot be verified. Which ultimately means learn simple math aka basic satoshi where 2+2 is an absolute. You cannot extract 5, that is what the fiat system is for.
3.) How would a bitcoin wallet specify the transaction fee when creating a transaction?
- The diff between input vs output. So in satoshi terms…(Total Input - Total Output = FEE). At the end of the day lets hope those fees stay around the range of satoshis to zero. XD
4.) How could you use the notion of transaction inputs and outputs to increase privacy in your
transaction?
- using only non kyc wallets with coins you have never associated with kyc compliant platforms. Or mixing your coins (mixing the sum of your coins between multiple wallets that will deal in utxo’s with the same exact sum and or inputs/outputs) and sending them to a non kyc wallet! Or just buy XMR i guess and mix your coins starting from there lol.
DUUUKKKAAAAAA!!!
1 Like
1.) UTXO are unspent transaction exchange outputs, they are the keys your wallet produce for someone to whom you are sending money and the keys your wallet reads as the total unspent balance in your wallet.
2.) The amount will sit out in the internet until it is added to another transaction, or used as part or all of a transaction fee on another transaction from your wallet, or you could give it to a miner as a zero sum transaction, otherwise it will just sit and wait to me compiled into another one of your transaction indefinitely. Oh, or it could be stolen if you lose your private key.
3.). Usually the fee is subtracted by the miners dependent on what is customary at the time. You can. designate the fee as more or less; more if you want a minor to take the transaction and confirm it quickly, less if you want the transaction to linger and possibly not be picked up. Miners set their parameters for what fee they are willing to accept for a transaction because they are paying the electric bill and infrastructure expense to accommodate the transactions.
4.) You can possibly jump the transactions around through other of your own wallets first to disguise the amount, or send partials to different wallet addresses of the receiver, or have a sender send to you many small transactions to different wallets.
1 Like
-
A UTXO is is a record of funds moving into a wallet. These are the funds that are available for you to spend.
-
You would use a second UTXO and send the difference back to yourself. Think of a UTXO as dollar bill valued at that amount. If you want to buy something of lesser value with that bill, you will receive change back.
-
The fee is equal to the difference of inputs and outputs. Input - Outputs = Fee. This is calcuated by the wallet, but the fee is never specified.
-
With multiple inputs and outputs it makes it harder to follow the money and know where it goes.
1 Like