Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#1672

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

These are the records on the blockchain that describe how much bitcoin is available to your private key.

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

Your wallet would combine enough UTXO’s into a transaction until the total amount covers the total that you want to send.

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

It would subtract the send amount from the sum of the UTXO’s.

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

By using multiple send addresses held by the same recipient.

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#1673
  1. Unspent Transaction Outputs are all of the funds available to you from all previous transactions.
  2. A wallet is necessary to access all of the UTXO’s from each private key and to add them together for access during construction of the next transaction.
  3. A bitcoin wallet queries the blockchain to see the latest fees and uses these to help determine the fee that will most likely guarantee a successful transaction.
  4. All of the funds available to each private key must be spent during each transaction, normally the difference between the funds being spent and the balance of the funds is returned to the party constructing the transaction but in order to ensure privacy the balance of funds can be sent to other addresses which may or may not be controlled by the sender.
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#1674

  1. They are transactions that haven’t been used to produce outputs, basically they are inputs that have reached your wallets with credit for you to spend in future transactions.

  2. All your UTXOs are summed and used to construct your balance, if the sum of them is enough then the transaction is approved by the nodes, otherwise it gets rejected.

  3. It would be the amount sent - The amount received, to calculate the fee you would need to use the following formula work out the size of your transaction in bytes, multiply it by the median byte size, take the answer in satoshis, divide it by 100 million (or 1e8 on a scientific calculator), get the answer in bitcoin and then convert to USD

  4. Privacy is achieve because addresses are cryptographic hashes making it impossible to know who the originator is, by having several wallets you ensure that funds can’t be traced back as they are signed with private keys.

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#1675

#1. transactions that you give to someone that did not use it yet. and dident make a transaction yet.

#2.put all of the transactions in, tha value you need goes to ob=ne adress and the rest can go to your other adress.

#3. imput - Output

#4. get a private blockchain

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#1676

You don’t need to spend all UTXOs every time you send a tx. You can only use that many so the sum is equal or larger to the amount you want to pay :slight_smile:

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#1677

You could just use multiple addresses to spice things up a little…or use Monero :smiley:

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#1678

you could do that, but my way also works

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#1679
  • Describe what Unspent Transaction Outputs (UTXO) are.

Unspent Transaction Outputs are the balances that are not used in any given transaction.

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

In that case, multiple UTXOs would be bundled as the input for the new transaction, and the remainder from the transaction represents a new UTXO.

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

Transaction fees are not explicitly specified, but can be calculated by the remaining difference between transaction inputs, outputs and unspent transaction outputs.

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

By using a new address for each receiving transaction.

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#1680

  1. UTXOs are the “change” that comes back to your wallet after a transaction. The inputs to a new transaction are outputs or UTXOs from previous transactions and are combined as inputs into a new transaction as whole chunks. Whatever part of those chunks that is above the desired transfer amount is returned to your wallet as a UTXO.

  2. If no one UTXO is large enough to cover tje transaction, than several UTXOs will be combined to cover the amount. If your total UTXO holdings aren’t enougj than your TX will not be validated.

  3. A wallet will look at the current market values for fees and suggest a competitive fee so that your TX will be processed quickly.

  4. If there are a lot of overlapping inputs such that it is difficult to distinguish which UTXO went to which destination.

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#1681

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

A UTXO is the output created from a previous transaction, that is yet to be used as a transaction input.

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

Available UTXOs can be added as inputs to the same transaction until the full amount is reached or exceeded.
In the event that the input UTXOs exceeds the required output amount, the overstated amount should be linked to an address (preferably an address you own).
With any transaction, the input amount must always be equal to the output amount, including the transaction fee.

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

This fee can either be specified (depending on urgency), or it can be left to the wallet to
calculate one, based on the latest fees from the blockchain, ensuring that your transaction is accepted by a miner in a reasonable time (or block count).

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

By using a different address in the transaction output, that belongs to the same private key as your input address, or any other wallet address you own.

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#1682

  1. It is the balance you have in your wallet

  2. Transaction will be decline

  3. A bitcoin wallet recommend a reasonable fee, bases on the current and previous transaction fees.

  4. Have multiple output addresses

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#1683

  1. UTXOs are, with respect to a particular private key, transactions in which BTC was sent to the private key’s public key, and which have not yet been spent by the private key.

  2. The nodes in the network will not confirm the transaction, and it will not be executed by the network, unless you have one or more other UTXOs available which if combined with the single UTXO that is not large enough to cover the needed output and transaction fee, results in UTXOs that are large enough.

  3. The transaction fee is not specified by a bitcoin wallet explicitly, rather the transaction fee always equals the difference between the transaction inputs and the transaction outputs in a transaction where the aggregate of the transaction inputs are larger than the aggregate of the transaction outputs.

  4. As it is possible to mix and match inputs with outputs in any manner, it should be possible to mix inputs and outputs to such an extent that it is no longer clear looking at any one output where the input for that output came from.

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#1684
  1. Describe what Unspent Transaction Outputs (UTXO) are.

All inputs received that are not spent

  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Use several UTXOs in one transaction and send the change back to yourself - minus fees.

  2. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    A Bitcoin wallet will recommend a fee

  3. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Create several addresses

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#1685

Homework on Bitcoin Transactions and UTXO - Questions

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    A. UTXOs are unspent outputs of previous input transactions.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    A. Combine more than one UTXO otherwise the transaction wold not be valid.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    A. It would recommend a acceptable fee to get the transaction added to the blockchain based on previous fees on the blockchain
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    A. you can specify an address that you own to send BTC back to yourself that can only be identified by the private key holder.
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#1686

  1. The sum of all you have available to spend from your wallet

  2. Your transaction cant go through

  3. input + output = transaction fee

  4. several outputs can be sent from one input specifically to intended receiver

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#1687
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    Utxo’s are the unspent outputs from a transaction.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Then all utxo’s would be used returning any change (minus the fee) to yourself. If not enough utxo’s exist then the transaction would be invalid.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It would look at the blockchain and suggest a fee based on previous transactions.
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Because if you must spend all the inputs in the transaction theres no way of knowing how much was spent and how much was returned because of multiple address.
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#1688

Unspent Transaction Outputs (UTXO) are basically transactions or values that have yet to be spent from a wallet.

If you do not have any single UTXO large enough to cover a transaction, multiple UTXOs are added together. With the remainder coming back to the sender, much like change.

A Bitcoin wallet specifies the transaction fee when creating a transaction by looking at past fees and providing a recommended fee to get the transaction added to the block in a reasonable time. The fee is equal to input minus output.

You could increase privacy in your transactions through using multiple inputs and outputs all at once.

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#1689

UTXOs are inputs that have been sent to your wallet. Your ballance.
If you do not have enough UTXOs in the wallet to cover the transaction, it will not take place.
Input-Output=fee. Compares to current price structure on the blockchain.
No one knows who or where transactions are being sent, just that they happened, so your identity is private.

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#1690
  1. UTXO’s represent a serie of transactions (inputs and outputs/received and sent) signed by a private key (contained in the wallet)
  2. The transaction would be declined.
  3. The transaction fee would be calculated by substracting the UTXO - the UTXO input
  4. By having multiple private keys (adresses), therefore different inputs and outputs.
#1691

Utxo’s are batches of bitcoin that are not spend. every transaction that sends you bitcoin are utxo’s that you can spend later on. When you make a transaction you can specify your utxo’s in your inputs, and choose a destination in the outputs.

When you don’t have a single UTXO big enough to cover for the amount, you can combine multiple smaller utxo’s as different inputs.

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