Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#1872

Thank you for the comment, I wasn’t aware of that! :slight_smile:

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#1873
  1. Describe what Unspent Transaction Outputs (UTXO) are.

A UTXO is an input that I can use in my TX. The UTXO derives from a spent TX / output sent to me from another party. As soon as my UTXO is confirmed in a TX is no longer is a UTXO and becomes a spent TX.

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

Your wallet will total all your individual UTXOs together. If the sum of all UTXOs is below the TX cost, the TX will be rejected by the network.

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

Input - Output = TX fee

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

Bitcoin TX increase privacy as Outputs can be sent back to the owner of the input by sending it to an address that they own. An outsider looking at the TXs does not know who is the owner of these addresses.

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#1874

Q1. Describe what Unspent Transaction Outputs (UTXO) are.
UTXOs are unspent funds (bitcoin) received from various sources and stored on blockchain for a given address. These are used in creating a transaction when a person wants to send funds (bitcoin) or pays for a service or product using bitcoin.

Q2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
Sum of all available UTXOs is used for covering the transaction. If sum of all available UTXOs is less than transaction value then the transaction will not occur.

Q3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
Transaction fee is generally = Inputs (Sum of unspent UTXOs) - Outputs

Most wallets query the blockchain network to determine which transaction fee will be used to make the transation process fastest. The fee is based on Satoshis/byte for the transaction. Higher the inputs and outputs of the transaction higher is the transaction fee.

Q4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
To increase privacy, it is good to store UTXOs in multiple bitcoin addresses as well as sending the change from the transation to multiple addresses managed by the wallet.

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#1875

Are you sure this is outputed and inputed from wallets? :wink:

Yes, but how would you do that? Just send money back to the same address?

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#1876

Transactions are in fact signed messages and not encrypted. On the blockchain you can sum up UTXOs for an address to get the balance of it. How would you mitigate this to be harder to read the amount you hold? :slight_smile:

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#1877

Wow!!! Thanks for the corrections!! And so quickly!!! I love this academy!!! :+1:

Cecil

Carl E. Gilliard / Cecil
Researcher

Brooklyn College
Undergraduate Earth & Environmental Science

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#1878

#1 blockchain output transaction that has not been spent .outputs a superset of utxos.
utxos are a subset of the outputs supersets

#2 your UTXO would not complete transaction lack of funds to pay fees

#3add total sum of all remaining inputs subtract the sum of output from transaction

#4 you can send multiple transactions at one time and even make new wallets to send funds to yourself all anonymously and some …

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#1879

Homework on Bitcoin Transactions and UTXO - Questions
Describe what Unspent Transaction Outputs (UTXO) are.

Unspent Transaction Outputs show the amount of BTC that is not spent and that you can spend.

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

If a single UTXO is not enough to cover your transaction it would be combined with another UTXO; e.g. Total Transaction is 1 BTC, but you have an UTXO that is .5 and one other that is .5, it would combine those two inputs to create an output of 1 BTC to complete your transaction. (Ignoring transaction fee in this example)

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

Your transaction fee is equal to your Input minus your Output amount.

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

Since the amount of inputs and outs is varied and identified by a lengthy sequences of numbers, versus say a Username or some easily associated ID, this provides a level of complexity in the ID and hence privacy despite being viewable by the public.

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#1880

You can use one transaction and wallet and just use multiple addresses :stuck_out_tongue:

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#1881

But what would you do if someone knew your address? For example when you sent funds from an exchange where you did KYC? :slight_smile:

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#1882

Homework on Bitcoin Transactions and UTXO - Questions

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    OTXO:s are the bitcoin that’s been sent to your wallet, and that’s not been spent yet on your part. Your wallet keeps track of all your UTXO:s and displays the sum of them as your balance, even though you don’t have an account.

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    You can’t make the transaction and need to gather more bitcoin, in the form of UTXO.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It’s specified as the input subtracted with the output.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You can fraction the transaction between several output addresses. A few which you may or may not control yourself and a few more that the recipient or the recipients control. In that way you can hide the “real” recipient while you also hide the actual amount you sent. I might be one or several of the addresses.

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#1883
  1. UTXOs are unspent outputs of the previous transaction.
  2. The transaction would be invalid.
  3. The fee is calculated from all inputs minus the outputs of a transaction.
  4. Use different address for each receiving transaction.
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#1884

  1. UTXOs are outputs from transactions that have not been queried and put into transactions themselves. UTXOs are queried and summed together to act as inputs for other transactions.

  2. UTXOs are combined and summed to cover the transaction. If the sum is not achieved, the transaction is thrown out.

  3. The wallet will determine a fee that will get you into the blockchain in a reasonable amount of time. Fee = input - output

  4. Outputs can be directed to several addresses owned by the same user, and inputs can come from several addresses as well. This could be means to confuse anybody searching for users behind transactions, but , on the flip-side, could also provide even more evidence to track someone trying to obfuscate their identity, which would not achieve greater anonymity. I’m not sure how effective of a measure this would be if someone were trying to mask their identity, as it would give investigators more information to work with.

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#1885

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO’s are the results of output from the previous transaction.

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

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Input - Output = tx fee

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    The more outputs in a transaction, the more addresses used and the more difficult it becomes to track transactions.

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#1886
  1. UTXO’s are the total balance of transaction outputs your wallet has recieved and that are available to the owner to spend…
  2. Then you cannot spend until you can cover the total transactions value + the fee…
  3. The wallet will specifiy the transaction fee by calculating the total UTXO of the value minus the transaction value minus the fee…
  4. By having multiple outputs in one transaction, you will increase the privacy…
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#1887

I didn’t understand the question, I had to look up the answer and from what I see, a new address of your funds would have to be created?

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#1888
  1. The balance of your unspent TX outputs
  2. Your transaction will not be accepted if it does not meet the minimum TX amount requested.
  3. Your wallet will calculate the fee automatically based on previous TX
  4. Use another address for each TX you’re receiving
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#1889

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXO inputs are UTXO you can use as outputs

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    You who then use the combination of UTXO’s to satisfy the TX.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The difference between the output tx and input tx is the tx fee paid. You can also select a higher tx fee to expedite the tx time.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Send the the UTXO output to a different wallet you control.

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#1890
1. Unspent transactions outputs are these logs of outgoing signed transactions that are in a “kind of suspended state” in the blockchain until the receiving wallet querys the blockchain with the corresponding private keys, acknowledges them as inputs and finally signs them as an outgoing transaction repeating the same process over and over again.
2. If you dont have any UTXO large enough then you dont have enough bitcoin to cover your transaction.
3. The bitcoin transaction fee is calculated by the block-size times the satoshi per byte (fee rate) formula. However, whenever someone signs a transaction, the wallet will show the difference between the inputs and outputs as the fee charged for the transaction.
4. It can be said that it kind of increases your privacy due to the fact that every-time you sign a transaction all the UTXOs are sent to many different addresses (What determines how many addresses are the UTXOs sent to is a mystery to me, can someone please shed some light on me). When this occurs, some of the UTXOs are going to be sent to many different addresses and the sum of the total transactions that are sent to equals to total value of bitcoin you have in your wallet. Some of this coins will go to other people, some will go to the actual transaction and some will go back to you. This mixing of transactions is what kind of increases your privacy when sending bitcoin. Of course this is assuming that there is no way of tracking where this addresses are coming from and who they belong to. The more transactions in your transaction, the more privacy there might be.
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#1891
  1. Unspent transactions Outputs (UTXO) are funds that are received that are still available to be spend.
  2. Your wallet will combine all your other UTXO’s until such amount is satisfied in order for the transaction to push through, but in case you only have one UTXO and it is not large enough to come up with the amount then the transaction will not progress, it will be rejected since you don’t have enough funds in your current UTXO.
  3. It is implied buy the difference of the the total input and the total output of a transaction.
  4. For me by using multiple addresses specially when receiving funds, and those addresses that I used for receiving I will not use them again to receive other funds I will only use them to send funds. In that case the person who will track my single address can only track all the traces of spending no receiving.
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