- UTXOs are the unspent inputs that are available the amount in one’s wallet.
- If a wallet does not contain a single UTXO that is large enough to cover for a transaction the wallet will look for another available UTXO to cover the entire amount of the transaction plus the fee. If there is not enough UTXOs available to cover the entire amount of the transaction plus fee the wallet will not be able to create the transaction.
- The wallet looks at the blockchain to determine the fee (ideally the wallet should specify a fee amount which would result in a miner taking up the said transaction so that it would be included in the blockchain in the minimum amount of time. In some wallets the owner of the wallet is given the option to specify the fee. The fee is equal to input(s) minus the outputs.
- To increase privacy and security in a transaction one should not reuse any of the addresses that one has used already. He/she should create a new address for each unique transaction.
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You can just use one wallet and multiple addresses 
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[quote=“ivan, post:1, topic:8436”]
- Describe what Unspent Transaction Outputs (UTXO) are.
UTXO’s are the unspent values that are in your wallet. - What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
The network would throw it out because you do not have enough funds for the transaction. - How would a bitcoin wallet specify the transaction fee when creating a transaction?
Your wallet looks at the fees of previous transactions on the blockchain and gives you a fee that will make it a reasonably fast transaction. Some wallets you can choose your fees. The higher the fee, the faster the transaction because the miners will choose that transaction over all others. - How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
You could use multiple wallets for privacy. An example would be sending someone bitcoin and have the “change” sent to another one of your wallets.
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Thats it, more simply said.
Those addresses need to be created on the fly, and the private key owned by the wallet owner, but that was unnecessary, you are right, 
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- 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?
Answers:-
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UTXO stands for unspent transaction output available in your wallet that you can spend.
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Then you need to combine with other UTXO to ensure the figure is larger and then balance you can resend it back to yourself as lose change.
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Bitcoin wallet specifies the transaction fee from some of the past transactions fees charged by the miners for the similar amount of bitcoin sent and normally the total input = output + fee of transaction.
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By having multiple inputs and send to multiple outputs even back to oneself with different wallet address that one has the private key or control over.
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Why not just use multiple addresses?
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1. Describe what Unspent Transaction Outputs (UTXO) are.
UTXOs are input transactions (unspent transactions)
2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
it would add up all UTXOs and send the amount needed for the external transactions and the rest (change) will be sent back to myself.
3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
diference between input and output. the wallet chooses the fee (or you can choose) the higher the fee the faster it will be executed (miners choose the highest fees) since they get the fee.
4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
because some output addresses are my own addresses
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Yes, good point. You can do that too. That’s what I do with metamask. It is faster and simpler. The only thing for me is that sometimes I forget to change accounts and I send to a different address and then I have to pay fees again to transfer it to the correct address. Right now with gas fees this can be pricey. Thank you for the reply. Cheers!
- Describe what Unspent Transaction Outputs (UTXO) are.
Available funds in your wallet that you can spend. Unspent funds from a previous transaction.
- What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
It will not be accepted by the network.
- How would a bitcoin wallet specify the transaction fee when creating a transaction?
Input – Output = fee
- How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
Use different addresses to provide for others to send me BTC.
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Yes, thank you for the correction - not “deleted”, but “spent”
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- UTXOs are current inputs/funds in my wallet that haven´t been spent yet.
- If possible, the sum of smaller UTXOs could be used, the change would be sent back to my address after deduction of the transaction fee.
- Formula is output-input=fee. However, most wallets calculate the fee automatically and propose them to the user, they take into account data from previous and current transactions.
- Using hardware wallet with encrypted private keys known only to the owner already provides for a high level of security, I suppose.
Hmmm, its not exactly what I meant Ethereum works differently in that regard. Meaning it does not use an UTXO based model but account based (which makes eth a bit less private).
The thing in Bitcoin is that you can use a different address to receive finds and then send it to someone else in the same transaction by spending your UTXOs (your BTC wallet does that for you).
You will have more difficulties achieving this in eth because there you transfer a specific value from A to B
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That is true since a HD wallet will generate a new address for you each time you would want to receive funds
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An UTXO is an output from another wallet that has been inputed to your wallet, and has not been spent.
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If you do not have enough UTXOs to cover a transaction, then the transaction will not execute.
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The wallet specifies the transaction fee by subtracting the output from the input.
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You can increase security by always sending yourself some of your own money when making any transaction.
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- UTXOs are basically transactions (inputs) that you have gotten that you haven’t spent yet.
- Your wallet will gather your UTXOs together so you can see if you have any other UTXOs so maybe you would have enough. If you don’t have enough in UTXOs then the transaction is dead.
- Bu using math inputs - outputs = fee
- By generating different addresses you make it infeasible to know what outputs go where and what addresses the person paying actually owns himself.
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Interesting. I’m looking forward to the Ethereum class next.
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1.- UTXO represent money received from someone else as input, this money is currently unspent and your wallet will see it as positive balance
2.- the transaction will get cancel
3.- fee = (UTXO - STXO)
4.- use several addresses
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1.UTXO is basically money received but not spent.
2. The transaction won’t go through, it will be canceled.
3.Transaction fee= input -output
4.By using a different address to send a transaction to the same wallet.
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Homework on role of wallets - Question July 18th 2020
- Describe what Unspent Transaction Outputs (UTXO) are.
UTXO are transactions in your Bitcoin wallet that is an unspent amount of funds, wallet account balance. It’s a output transaction from another wallet that was transmitted(input-inserted) into another wallet.
- What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
The transaction is denied for lack of funds in the wallet.
- How would a bitcoin wallet specify the transaction fee when creating a transaction?
The bitcoin wallet would subtract the UTXO account balance to the output transaction balance. The results is an transaction amount difference used as a fee.
- How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
The input and output of the transaction doesn’t specify the account balance, their all listed as Bitcoin addresses. It only shows the input key and the output key. All transaction are similar to encrypted messages.
-Hector A. Martinez
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- unspent UTXO are previous input transactions in your wallet.
- What would happen is it would use any number of available UXTO.s to make the transaction, and you would receive some as change back subtracting the transaction fees. if there were not enough UTXO’s to complete the transaction it will be ignored.
3.the wallet will specify the transaction fee as “Implied” or rather there is no amount listed until the transaction has been completed. and this amount will be the difference between the amount received as change and the agreed amount of the initial transaction.
4 since there is no personal information associated with the transactions it would be difficult to know who is sending what where except the two parties in a single transaction that has been completed.
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