CryptoURANUS Economics: Unspent Transaction Output [UTXO]: Defined in CryptoCurrency

CryptoCurrencies


Saturday, August 11, 2018

Unspent Transaction Output [UTXO]: Defined in CryptoCurrency



Unspent Transaction Output [UTXO]: Defined.




Unspent Transaction Output or UTXO, is defined as a list of money received that has not yet been spent. Bitcoin and other cryptocurrencies based on bitcoin’s technology use UTXO to verify that a person has unspent crypto available for spending.If you were to total up the UTXO, you would get the user’s available balance.























About UTXO's:


  • The Unspent Transaction Outputs / Also Known As / UTXO's are an interesting topic not spoken often enough in the bitcoin community.
  • An unspent transaction output (UTXO) is an output of a blockchain that has not been spent. -- i.e. used as an input in a new transaction.
  • Bitcoin is the most famous example of a cryptocurrency that uses the UTXO model.
  • Outputs are a superset of UTXOs.
  • UTXOs are a subset of the outputs superset.
  • Bitcoin UTXO lifespans have been studied.
  • Valid blockchain unspent outputs transactions may be used to effect further transactions.
  • The requirement is only unspent outputs may be used in further transactions is necessary to prevent double spending and fraud.
  • Inputs on a blockchain are deleted when a transaction occurs, whilst at the same time, outputs are created in the form of UTXOs.
  • These unspent transaction outputs can be used for the purpose of future transactions.
  • When bitcoin first became known, (UTXO), was considered pivotal.
  • Current day bitcoin community consider the HD wallets have no need understanding UTXOs as thoroughly.



What Is A UTXO In Present Day CryptoCurrencies?

  • A Bitcoin transaction is comprised of inputs and outputs.
  • Only Unspent Transaction Outputs, or UTXOs, can be used to be spent as an input in another transaction whereas spent outputs are already spent hence can’t be spent again. 
  • You will always need UTXO or an unspent transaction output to make a transaction workable.
    If you don’t have an  UTXO then you do not have any Bitcoin.
  • These are the protocol rules Satoshi Nakamoto had defined into Bitcoin to prevent double spending. 
  • There is no way in the bitcoin world to spend partial amounts while completing a transaction.

TA More In-depth Translation Is This: 

Problem: With a balance of 3 BTC on ‘XYZ’ public address and you pay 0.5 BTC to a merchant, you cannot send 0.5 out of your ‘XYZ’ address and keep the rest 2.5 BTC intact.


Solution: You need to spend the entire 3 BTC that you designate a 0.5 BTC to the merchant while providing a signature and sending the rest 2.5 BTC back to yourself on an address that you control.



Known-As: Sending $change to the change address.
  • In the dawn and beginning of Bitcoin a trader always made two transactions in your wallet when you pay someone. 
  • Yes, that’s true because modern wallets take care of everything behind the scenes.

When a bitcoin transaction takes place, there are two UTXOs created:
A.) One that is the actual coins sent to the recipient
...and...
B.) One that is the change output, which goes back to the sender’s wallet.


To clarify, the transaction above is done by the same person, confused yet?


This happens because HD wallets automatically send the change to a different change address so that you can secure your privacy. So next time you see your address changing, you know it is happening because you are receiving new UTXOs on a new change address!


Your Thoughts Are My Thoughts:

 

In earlier Bitcoin days, there were no deterministic wallets, BTC wallets used to ask for a change address if you were not the spending the whole balance in the initial transaction, failing which could result in your change being sent to addresses that you did not control resulting in loss of the transfering funds.



UTXO in depth:


  • More transactions means more memory for the UTXO database.
  • Many want to know what the UTXO database is.
  • UTXO is geek-speak for “unspent transaction output.” 
  • Unspent transaction outputs are important because fully validating nodes use them to figure out whether or not transactions are valid.
  • All inputs to a transaction must be in the UTXO database for it to be valid. 
  • If an input is not in the UTXO database, then either the transaction is trying to double-spend some bitcoins that were already spent or the transaction is trying to spend bitcoins that don’t exist.
  • The price of memory rises and drops every year. 
  • New memory chip technologies roll out we would still have the UTXO set growth outpacing the advance of technology keeping the not so wealthy poor.
  • Currently in 2018, the UTXO database is about 650MiB on disk, 4GB when decompressed into memory. DRAM costs about $too-much per GB, so you need to spend about $too-much on memory if you want absolute fastest access to the UTXO.
  • The UTXO continues to double and RAM prices continue to drop $% per year, next year you’ll have to spend about $more-Money.
  • Ten years from now may cost even more, perhaps.
  • The maximum block size will stop the exponential growth.
    A one megabyte block is room for about 100 million 500-byte transactions per year.
    If each one of these blocks increase in the UTXO then 500 bytes would grow in the UTXO Bd to 50 gigabytes a year. 
  • The worst case running nodes are those with not enoug ram.
  • More transactions with no changes would accelerate the UTXO Bd into more growth.
    With more UTXO Db growth will make purchasing RAM more expensive.
  • That is a very good reason to oppose increasing the maximum block size, because.
  • UTXO Db set does not have to be in DDR+RAM, but it can be stored on an SSD or spinning hard disk and the only reason why not is control over less wealthy.
  • The access of UTXO is not random.
  • The UTXO outputs recently spent will be re-spent outputs that have not been spent in a long time.
  • Bitcoin Core already has a multi-level UTXO cache, thanks to the hard work of Pieter Wuille.
  • Solid-state-disk (SSD) prices are about $to-much$ per GB, spinning disks are less $per GB$. 
  • Knowing how Bitcoin works is everything.

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