Homework on Bitcoin Transactions and UTXO - Questions

  • Describe what Unspent Transaction Outputs (UTXO) are.
    The difference between inputs and outputs

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

  • How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The difference between inputs and outputs is the fee

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

Since every transaction uses all of my UTXO, in each transaction the blockchain produces a new address for me. changing addresses makes it hard to understand who is the owner of the wallet.

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    UTXOs are the inputs sent to a private key address from a transferor that are identified by the transferees wallet for use to spend . (transfer on)

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

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    It will state the transfer fee which will be the difference between inputs and output totals.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    By sending the output to a different address or wallet.

  1. These are the outputs of previous transactions confirmed on the blockchain and have some balances attached to it which can be spent by the receivers.
  2. Your wallet wll combine 2 or more UTXOs till the sum of the inputs become greater than the output to be spent.
  3. It will sign a transaction using UTXOs which when added becomes greater than the ouputs and the difference is automatically transferred to the miner’s address and need not to be specified by the wallet or the txn
  4. By increasing the number of inputs and outputs and mixing different types of txns of other people, privacy can be increased.

Homework on Bitcoin Transactions and UTXO - Questions

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

Those are the current balance, technically those are the potencial inputs that our private key has access to.

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

The wallet will combine additional UTXOs to cover the transactions, there was good analogy to banknotes in the video.

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

It will compare outputs with inputs and the difference will be the transaction fee.

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

You can create many outputs and nobody would know where you have sent your coins.

  1. Are the remaining of a TX to a given address. Like a cashback
  2. You can’t make that TX
  3. Fee = Inputs - Outputs
  4. You can use multiple wallets and send the UTXO to other wallet of your own.

1- UTXOs is the outpot of pervius transaction(s) input
2- It compine it with another UTXO per perform the transaction then send the remaining back to you
3- eithr its already specified on the wallet, or the wallet check the previuse fee and appliy it
4- caue they are all addresses not a human names, thus, sending a transaction manytime (may including your self) would result it this

  1. The UTXO are all your funds send to the blockchain as a transaction to your recipient/s wallet/s which includes the difference/surplus funds in your account, send back to your wallet whereby you are also a recipient, minus your fee for the transaction.
    2.The transaction will be denied.
    3.Through the difference between your outputs and the input in your wallet
    4.Cluster your transaction into multiple recipients per transaction.
  1. UTXO are received transactions.
  2. It will combine UTXO till it finds a combination that large enough.
  3. It is not specified. Input minus output = transaction fee
  4. When an input creates multiple outputs it becomes difficult to see which output is what.
  1. A UTXO is the output of a bitcoin transaction, as the coins wait to become inputs in a future transaction. Put simply, your wallet stores your UTXOs and displays them as a total balance that you can use on future transactions.

  2. Your wallet will combine UTXOs in your wallet in order to cover the transaction, so long as your total balance is large enough to cover the transaction.

  3. A bitcoin wallet specifies the transaction fee on transactions by querying the blockchain and seeing what a good transaction fee would be, ie., one that will be approved quickly. Some wallets let you specify your own transaction fee.

  4. From the outside looking in, it is impossible to tell what outputs correspond to what inputs. For example, you don’t know what UTXOs are sending a partial amount to a recipient, with some refunded to the sender, or what.

  • Describe what Unspent Transaction Outputs (UTXO) are.
    The output of a transaction that have not yet been used as inputs of another transaction.
  • What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    Multiple UTXOs would be used as inputs for the transaction, sufficient to cover the transaction cost.
  • How would a bitcoin wallet specify the transaction fee when creating a transaction?
    The transaction fee is the difference between the sum of the UTXO inputs and sum of the UTXO outputs. The fee could therefore be specified by including additional UTXO input amount, or by reducing the amount sent to a UTXO output (such as your own address).
  • How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    You could have multiple public/private key pairs. If your identity is already linked to one of those pairs, you can output to a different one that you own which is not associated yet.
  1. UTXO’s are outputs from a transaction in bitcoin, and these outputs are what you can spend into a new transaction
  2. Your wallet will try to find the best amount of utxos that combine into the amount you want to spend, it could be only one more in this case or even dozens depending on how many and how big are the UTXOs you control
  3. The wallet constructs the transaction and then specifies the fee in satoshis per byte used on that transaction
  4. By moving btc amounts through different utxo’s it can look like they are from different wallets and controlled by different people. Good practices include not re-using same addresses, not merging utxo’s into a big one, even not spending exact amounts can help with privacy because it creates new “change” utxo’s for you
  1. Unspent Transaction Outputs (UTXOs) are basically outputs of bitcoin transactions that have yet to be spent. There are no such things as bit’COINS’, but rather you own UTXOs on the bitcoin blockchain.

  2. If you don’t have any single UTXO that is large enough to cover for your transaction you must combine it with another UTXO (or maybe even more) as another input within the transaction.

  3. A bitcoin wallet specifies the transaction fee when creating a transaction by subtracting the total inputs by the total outputs.

  4. You could use the notion of transaction inputs and outputs to increase privacy in your transaction by making many different outputs, of which some or all go back to you, someone else, or a mix of both.

1 Unspent transaction is a unspent outputs of previous transaction.
2 transaction will be not conformed.
3 it will choose from privies transactions and will take average enough to be fast and cheap for you.
4 always generate new outputs and don’t use them second time.

  1. Is the output of a transaction. Can be spend on a input of a new transaction.
  2. It will add a another UTXO and check if that satisfy. if not add another. Transaction validators wil check the balance (sum of utxo’s) and determine if its a valid transaction. Transaction validators also prefents double spending.
  3. input - output
  1. UTXO is the balance in your wallet from all inputs that have not been spent

  2. The transaction would not be verified - or declined.

  3. It would be the transaction inputs minus the transaction outputs

  4. Use a number of different receiving wallets. It’s not obvious that all these wallets are connected.

  1. UTXOs are the outputs of a previous bitcoin transaction that are yet to be spent. They form the inputs of new transactions.

  2. If you don’t have any single UTXO to cover the amount of a transaction you can use multiple UTXOs with any remainder being returned to an address you control.

  3. The transaction fee is simply the difference between the inputs and the outputs. The wallet specifies a fee by selecting an output lower than the inputs with the remainder being the fee.

  4. A transaction can use multiple inputs and outputs with one or more of the output addresses being the actual transaction and the rest being returned to addresses the sender controls.

  1. Unspent Transaction Outputs could be described as the funds received in a wallet that haven’t been spent yet, therefore are Unspent, and have been sent into the wallet via transactions by other wallets, therefore Transaction Outputs
  2. The wallet can put together all the wallet’s UTXOs and must spend them all when creating a new transaction
  3. The transaction fee is not explicitely specified by wallets in the transaction because the transaction fee can be calculated by simply subtracting the spent output from the total UTXOs
  4. You can spend your funds by sending and splitting them to multiple addresses that you own
  1. UTXO - is like your money it define an output of a blockchain transaction that hasn’t been spend. You will be able to use it as an input for another transaction.
  2. Transaction wouldn’t happen
  3. On some wallets you can choose the fee and on other they will use most recent that it calculates it best to use.
  4. more transactions to more addresses no one know how many of them you own.

1-Describe what are the exits of unspent transactions (UTXO).
The UTXO are the outputs received by a transaction, it is the money that is associated with my address to be spent or used.

2-What would happen if you don’t have a unique UTXO that is large enough to cover your transaction?
The transaction is not processed because the input must be equal to the output.

3-How would a bitcoin wallet specify the transaction fee when creating a transaction?
It is the subtraction of the input minus the output

4-How could you use the notion of transaction entries and exits to increase privacy in your transaction?
Using a hardware wallet with which I don’t have access to the private key and that the “change” is directed to a new wallet address

  1. UTXOs are values recorded on the Bitcoin blockchain that represent individual amounts of Bitcoin spent as part of a transaction constructed by one private key and transferred to another. These values are currently available for the recipient to spend, but haven’t yet been included as inputs in any further transactions. Only the entire values of UTXOs can be included as inputs in new transactions. A wallet calculates a current balance by totalling all the UTXOs recorded on the blockchain which are allocated to a particular private key.

  2. Your wallet would use more than one of your UTXOs to construct the transaction, meaning the transaction would have more than one input.

  3. Total value of the transaction inputs LESS Total value of the transaction outputs = Transaction Fee.

  4. You could construct a transaction with a total input value greater than the amount you actually want to transfer to the other party. Your transaction would have more than one output, one transferring to the recipient the amount you actually want to spend, the other sending the difference (less the transaction fee) to yourself but to a different address. Anyone viewing the transaction on a blockchain explorer would not be able to tell which of the two outputs you have transferred to the other party.