Sending to multiple outputs would be enough to somewhat confuse the person tracking you. As they wouldn’t be sure what outputs you still control and which ones you do not control. 
Let’s say I connect your identity to a public address. Is there anything you can do to increase your privacy again? Any way you could confuse me?
Usually its 1 input and 2 outputs. Its very rare that you would have the exact amount. Just like in a store. If you need to pay 5.67$, its not common you will have that exact amount. Meaning one output will be the actual amount and the other would be your change.
Indeed. But sometimes you could have multiple UTXO’s. This means that you are able to combine them until you can get the amount needed.
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I should have worded that better. Thank you Mauro
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Yes, I meant if someone stole it and you lost it the the thief. Again Poor wording. Thanks Again Mauro. I appreciate your attention to detail.
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UTXOs are what you wallet queries the blockchain to see how many of your various previous inputs haven’t yet been spent, the total of these UTXOs being your wallet total balance on the blockchain database.
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Assuming that your total balance is greater than the amount you wish to send/spend in this transaction, the wallet will aggregate all of the UTXOs to send and the outputs will equal the total of the desired spend + the fees the wallet calculates + the remainder sent back to your wallet.
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It will calculate the fees into the transaction according to your instructions.
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You could review your wallet transaction history on a Blockchain Explorer to see the number of size of the various UTXOs that the wallet contains. Then perhaps use this information to spend or send transaction amounts that are less than particular UTXOs.
By sending to multiple outputs, including yourself ?
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Hey Mauro
Thanks for the reply. I think the way the question was worded was making me think inside the box. So if I understand with multiple UTXOs (outputs that came to your address) they will be combined together when the wallet makes a query to the blockchain. So if there is only one UTXO that ever came to the address and is not enough to cover the transaction, my answer is more valid?
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Yes you could. For example, if you want to buy a chocolate that cost 2$ and, you have a bill of 10$, You pay with that bill and get 8$ change back to you. If you wants to purchase or pay 0.8BTC and have 0.5btc+ 0.4 btc= 0.9btc. You will get back 0.1btc.
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UTXO’s are unspent transaction outputs. They makeup the balance in your wallet and are available to be spent.
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It would use multiple UTXO’s to cover the cost of the transaction and the difference is sent back to your wallet.
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The difference between the input and outputs.
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Create a new address each to you receive a transaction.
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Hi there!! And how do this instructions look like? You can relate inputs, outputs and fees.
1.- UTXOs in simplified words are the balances that a wallet can spend.
2.- If there is not a single UTXO large enough, the sum of various or all the UTXOs are spent, and the change of the transaction is sent back to the wallet that created the transaction.
3.- Transaction fees =Inputs - Outputs.
4.- Instead of sending back the change of a transaction to the same wallet, I can send it to a different wallet or different wallets I also own.
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UTXOs are the outputs of previous transactions you have received. You can use as your input when you want to make a transaction.
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Your wallet will take multiple UTXOs to create a sum that is large enough to cover the transaction.
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The wallet will look at other recent transactions on the blockchain and suggest a fee that will give you a reasonable transaction time.
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You cannot really know who the transaction is going to in the block explorer. it is possible to see exactly to which address what amount of BTC is going to, But you cannot see wether it is really being transferred to someone else or if it it is going back to yourself again.
Hi there! And what about the relationship between the fee value, inputs and outputs?
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UTXOs are basically the most recent or up-to-date balance output in a wallet.
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If you don’t have any single UTXO that is large enough to cover your transaction, then the transaction would not be valid and it would not be verified by the network. However, if you have single UTXOs that has a greater sum that is greater than or equal to cover you transaction, the transaction will use the sum of the single UTXOs to cover the transaction.
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The bitcoin wallet would analyze the network to see how much the fee needs to be to still be able to transfer the UTXO fast enough to the other wallet. You can determine the fee in some wallet, like some SPVs.
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You can send multiple inputs to different wallets. If someone wants to track you, they will see where the transaction went, but they will not be able to verify that you hold the wallet with the UTXO(s).
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UTXO’s are those unspent transactions referencing some token value which is added to your wallet.
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The process would be rejected is you have insufficient amount of token value reference from the total utxo’s a wallet may have, else the transaction will be processed.
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The transaction fee calculated by looking at the UTXO returned to the user if the transaction were completed compared to the amount of UTXO initially in the wallet. The difference would be the transaction fee.
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There is not certain identity tied inherently to an address. If one was discovered to be the owner of an address, that owner can simply create a new address and transact UTXO’s to that new address.
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Homework on Bitcoin Transactions and UTXO-Questions:
1.UTXO’s are the wallets unspent transactions on the blockchain.
2.The output will not be accepted.
3.The transaction fee is calculated automatically by the wallet.
4.Multiple transactions obscure recipients.
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Describe what Unspent Transaction Outputs (UTXO) are.
-they are unspent transaction outputs, and the sum of the transaction output if not spent, as soon as the next transaction is completed they become spent transactions. -
What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
-The transaction will not be confirmed. -
How would a bitcoin wallet specify the transaction fee when creating a transaction?
-It will be automatically generated by the wallet and will be included in the sum of the total UTXO’s of the output. -
How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
-There are multiple transaction outputs that can not be verified as anyone can create a wallet without personal identity (anonymity) and visa versa.
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The role of unspent transaction outputs (or UTXOs) in ecosystem are to enable the blockchain to keep track of currency and value being transferred around the network. When you wish to send a transaction your wallet will query the blockchain to see what UTXO’s are available for you to transfer (and whether the transaction makes sense) before other computer nodes propagate the transaction further. Essentially UTXO’s replace ‘coins’ as there no coins in your wallet, only the private keys that sign transactions when you are sending them. The blockchain itself records all transactions and UTXO data on the ledger. When you then send a transaction to someone else, the outputs of your transaction also become UTXO’s for them to spend (so these ‘outputs’ become inputs). Wallets also use UTXO data to give your balance.
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If the sum total of all UTXO’s you have been sent are not large enough for the transaction you wish to make the, the blockchain nodes will reject it as invalid. However, if you have enough ‘funds’ to transfer across more than one UTXO (for example, across two), then those UTXO’s that cover the transaction sufficiently (two in our example) need to be spent in their entirety and so if they exceed the total transaction amount (plus fee) required you will receive “change” in the form of currency sent back to you totalling the amount of total currency sent minus full transaction (including fees).
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In order to specific a transaction fee your bitcoin wallet will look at a broad range of fees from recent transactions confirmed on the network and calculate (/ propose) a few that will get your transaction confirmed on the blockchain within a reasonable amount of time (and since miners aim to confirm larger fees first i.e. more quickly in mining bitcoin, fees that are too low will mean a very delayed transaction time).
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The blockchain does not keep a record of your balance on the network. Instead your wallet queries what UTXO’s are available for you to spend and when you spend these UTXO’s you can also have multiple outputs. By having multiple outputs, one of these could also mean that part of a transaction destination address is your own wallet, or another private key within your own wallet. So if you transfer 1BTC and 90% of the output comes back to you (e.g. another private key within your wallet, then only 10% of your funds have been sent). This is obviously one example of many.