Homework on Bitcoin Transactions and UTXO - Questions

[tvidebaek]

1. An UTXO is an input to a wallet, that is “waiting” to be spent.
   The wallet tracks the UTXOs on the blockchain that belongs to the private key.

2. It will utilize 2 or more UTXOs to meet the transaction, and then send the exess amount back to the wallet as a new UTXO.

3. Input minus output

4. By making sure that more than one UTXO goes into the transaction output.

[bolyx]

Homework on Bitcoin Transactions and UTXO - Questions

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXO’s are basically the Outputs from any sender(s) wallet,that will hit a receiver wallet and remains there available to be spent according to the rule in one go by the receiver.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   Then your wallet will not carry out the transaction because the rule is Input should always be equal to output and in this case there is no enough input to satisfy the output and as a rule based protocol, the transaction will be voided.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   The transaction fee is automatically calculated by the wallet by checking out the blockchain for recent fees that are being charged by the miner on the network and usually in some cases suggest you the best fee that will get your transaction into the blockchain as quick as possible. Also some Wallet allow you to choose the fee which you will like to spend as well.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   In a blockchain transaction because the rule is all input must be equal to output to calculate immediately an UTXO, a specific transaction may involve part spent of the UTXO and thus the remaining balance can then be automatically sent to the sender in an anonymous manner without anyone knowing which of the outputs the transaction goes to.Although the blockchain might be able to guess.

Readmore here:https://support.blockchain.com/hc/en-us/articles/360040028192-Anatomy-of-a-Bitcoin-Transaction

[BERGLUND]

@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?

1. UTXOs are the funds sent to my wallet, not sent by me to another wallet.
2. If my total UTXOs exceeds my desired output, I just send the excess back, if not the transaction is rejected.
3. Fee=In - Out
4. I can create transactions from a wallet I control to several other wallets I control, repeatedly .

[BERGLUND]

Yay, this is what I want to learn

[colgate_fresh]

@ivan

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

1. UXTOs are unspent transactions that you have received from one or more sources.
2. I don’t understand the question. From my understanding, each outgoing transaction takes the entire amount of UXTOs you have ever received before you sent any, and sends the designated to recipient and the rest back to your own wallet, minus transaction fees. No?

3. A bitcoin wallet looks for the best rate for a reasonable approximate transaction it would take to transfer the transaction for that fee.
4. You can not, really. The best you can do is attempt to obfuscate the transaction by taking multiple UTXOs and sending to many different addresses. However, this has been defeated by software tracking, especially Coinbase’s own software that it has offered to (and accepted by) the IRS.

[pmassafr]

1. UTXOs are unspent transactions (open legs in the TX tree). The sum of one’s UTXOs is the balance of its wallet.
2. Assuming the wallet balance is enough for the expense the wallet will combine more UTXO to cover expense+fees
3. The wallet will define a reasonable fee that is enough attractive for miners to process the transaction in a reasonable time
4. You cannot link owners with transactions addresses

[Alko89]

@ludvighatle

Now you will create a transaction of sum inputs (4x0.25), which is 1 bitcoin. The inputs and outputs needs to be the same. So the output will be 0.4 to your cousin and 0.6 back to you. You will now have a utxo of 0.6 bitcoin and a total of 0.6 bitcoin.

If you have UTXOs with the balance of 0.25 BTC and would like to send 0.4 BTC, you could use just two of the UTXOs and send back only 0.1 BTC This would also make the tx a bit smaller which would mean you would need to pay a smaller fee.

@ludvighatle

Create several wallets, send back and forth, and your bitcoin will be only known to you.

You don’t need to create multiple wallets. You can create many addresses within the same wallet.

[Alko89]

@mwollike

new wallets istead of using the same every time.

@BERGLUND

several other wallets I control, repeatedly

You don’t need new wallet for that, you can create a new address in the wallet itself in fact most wallets already do that for you.

[Alko89]

Since I noticed you really like math you should definitely take Bitcoin Programming course also have a look at the fascinating concept of Hierarchical Deterministic Wallets described in BIP32

[Alko89]

@colgate_fresh

I don’t understand the question. From my understanding, each outgoing transaction takes the entire amount of UXTOs you have ever received before you sent any, and sends the designated to recipient and the rest back to your own wallet, minus transaction fees. No?

No you don’t need to spend all UTXOs you have every time you send a transaction. You only need to use as many UTXOs that the sum is equal or greater than the value you would want to pay
So if you own 5 UTXOs with the balance of 0.2 BTC and want to pay 0.3 BTC, you can only use 2 of them and send 0.1 BTC back.

[pepijnnabbe]

1. Outputs of a transaction that can be used by the recipient of the outputs as inputs.
2. Your wallet will take additional UTXO’s in the transaction and provide you a ‘change’ UTXO in the transaction. Or if you do not have any other UTXO’s to spent next the one that is too small, your wallet cannot construct and broadcast your transaction
3. It calculates the fee by: output minus input
4. you do not know who the recipient and the sender is based on the addresses.

[colgate_fresh]

Thank you for clarifying!

[terrydanaher]

1. The total of all UTXOs is the wallet balance. 2.You could use multiple UTXOs and send the remainder back to yourself 3. Inputs-Outputs=fees 4. By using multiple addresses

[Faisal_Harianawalla]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   UTXO’s stand for Unspent Transaction Outputs. In simple terms they are a tracking mechanism that establishes the balances in wallets.
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   The UTXO balances are summed together and the amounts for the transaction are given to the person whom you owe with the remaining flowing back to you and hence establishing new balance for your wallet.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   The BTC Wallet will automatically optimize the best level of a transaction fee that could be paid based on the circumstances. If a transaction was necessary to be performed in a fast way then higher transaction fees would be charged.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   The inputs and outputs do not clearly identify and distinguish from which wallet a transaction is occurring or going to. This increases privacy in a transaction.

[mountainvalue]

Utxo’s are will give the wallet the list of all received transaction, which permits the wallet to give you your account balance
2) the transaction does not take place
3) the fee is proposed by the wallet , according to ongoing fees charged on the blockchain, and added to the transaction. Should you have inputs of 0.5 and you which to purchase x for 0.3 , and the ongoing fee is 0.1, you would send back to you 0.1

[BobN]

Homework on Bitcoin Transactions and UTXO - Questions

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

UTXO’s are basically transactions you received, but did not spend. So it’s the balance of your wallet

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   UTXO’s are combined and then you spend the amount needed for the transaction and the “change” will be send back to your wallet. Like with cash money you pay $7 with two $5 bills and receive $3,- back

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   Difference between inputs and the outputs

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   Use a new address or use al lot off transactions, it’s almost impossible to track where the transaction went, could even be back to yourself

[jerry_miller]

1. The balance of Bitcoin in your wallet is composed of Unspent Transaction Outputs (UTXOs). These are outputs from previous transactions to your Bitcoin address from other Bitcoin addresses. The wallet calculates the total number of UTXOs in the blockchain that belongs to your private key, and sums them up to get your total balance.
2. If I don’t have any single UTXO that is large enough to cover for my transaction, my wallet will combine this UTXO with other of my UTXOs to cover the transaction.
3. A normal Bitcoin wallet queries the blockchain and picks a transaction fee based on the activity on the network. It picks a transaction fee just big enough to get the transaction done in reasonable time.
4. To utilize multiple transaction inputs and outputs to leverage privacy, you can generate new addresses that you control and send Bitcoins to them in one transaction. In this way, it is difficult to know that you own these addresses that you sent the Bitcoin too.

[mark.mosley]

1. A UTXO is that portion of a transaction that is returned to your private key.

2. Your wallet combines multiple UTXO’s until the sum is greater to or equal to the spend amount plus fees.

3. Your wallet will look at the blockchain and decide what size fee will likely motivate a miner to include the transaction in the next block.

4. Specify multiple addresses to receive the UTXO as input.

[SecondOpinion]

1. Describe what Unspent Transaction Outputs (UTXO) are.
   The output is the incoming funds that you have received.

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
   It will be made up of a number of UTXOs or if you dont have sufficient balance the network will ignor the transaction

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
   Never specified but implied (his words exactly from the half hearted lecture with the messy diagram. The wallet also chooses a fee to get your tx into the block chain reasonably fast enough (his words not mine). I hope you understand (a line given every lecture which adds no extra useful data but can be received either as useless or as condescension.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
   [/quote]
   Construct a tx such that the output totals the input but that most or some of the balanced is returned as “change” to you. No-one else knows that this ios a public address generated by your same private key.

[Erwin]

1 UTXO’s are unspend transactions you have recieved. They are spend transaction from others to you and unspend transactions from yourself.
2 The transaction would not be executed.
3. Transaction fee = UTXO- UTXO spend
4 Use multple crypto addressees. So the unspend transactions go to several addressees belonging to the same person for instance.