Part of the reason bitcoin is a valuable digital currency is that you can't spend the same UTXOs twice. If there are two conflicting transactions that are trying to spend the same coins, only one of them will be included in a block. The other will get dropped and become invalid. Most likely the second transaction with a higher fee will be included first thereby making the lower fee transaction invalid.
Thanks so just to confirm. If I do the following transaction (from the same UTXO)
Earlier transaction: Send 1 btc @ lower fee
Later transaction: Send 2 btc @ higher fee.
(1) Would it be correct to say that the 2 btc transaction will replace the 1 btc transaction?
(2) How does the bitcoin network distinguish this from there being 2 separate transactions eg. to send a total of 3 btc? Assumption here is that the UTXO has more than 3 btc.
Thanks.