Homework on Bitcoin Ecosystem - Questions

Blockchain and Bitcoin 101
#242
  1. What is the difference between a SPV (simplified payment verification) and a full node?
    A spv has to connect to node to get the information.
  2. What does it mean when a transaction is broadcasted? It is when all UTXO are verify than it is broadcasted to node.
  3. How does a miner pick which transactions that gets added to the next block? When they have proof of work.
#243

When a transaction is broadcasted, it wil be send to the mempool on each node, waiting to get included in a block by a miner.
Miners are incentivized to pick transactions with the highest fee first.

#244

What is the difference between a SPV (simplified payment verification) and a full node?
A full node contains the entire blockchain. It accepts transactions and checks they are valid. If valid it broadcasts them on the network and places a copy in the mempool. It also answers queries received from other nodes and SPVs. SPVs only hold a persons private keys(s) and addresses. It uses these to query nodes in order to display to the user the current state of their bitcoin balance or to create a transaction which it then broadcasts to the network.

What does it mean when a transaction is broadcasted?
Sent onto the network (other nodes) where it is rebroadcast until confirmed by a miner assuming the transaction is valid of course.

How does a miner pick which transactions that gets added to the next block?
It will pick as many as will fit into a block selecting the ones with the highest transaction fees per byte first.

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#245

  1. An SPV doesn’t include all UTXO and instead gets its information from a full node. A full node includes the entire blockchain with all UTXO and confirmed transactions. An SPV must broadcast its transactions to the full node for transactions to be valid.

  2. A transaction is broadcasted if it is sent to all the nodes which store them in their mempools, until miners add that transaction to the blockchain.

  3. A miner picks transactions in the mempools of the nodes it communicates with, adding the highest transaction fee first into the blockchain.

#246

A SPV does not have the full blockchain-history stored locally like a full node has.

The transactions is spread to all nodes.

The miner picks the transaction that is most profitable.

#247
  1. A full node has the entire ledger or database of the entire transactions history. A SPV communicates with a node to have access to that information.
  2. It means it is sent to the nodes worldwide.
  3. It goes to the mempool, and picks the ones with higher fees.
#248

A full node stores a complete copy of the blockchain locally and will listen for new transactions in the network. When a new transaction arrives the node places it in the mempool which is a sort of storage place for transactions before they become part of the blockchain. Invalid transactions will be ignored by the nodes as will invalid blocks. An SPV node, or simplified payment verification node sometimes called a lite wallet and often used on mobile devices, does not have the full history of transactions as it does not store a complete copy of the blockchain. SPVs will be able to check the blockchain for your UTXOs by communicating with a full node.

Nodes communicate with each other to assure they have the latest copy of the blockchain and to find new transactions to put in their mempools. Broadcasting transactions to the network is when a node sends transactions to its neighboring nodes. Transactions are propagated throughout the network as the neighboring nodes send the transactions to their neighbors and so on until all nodes have received it or it has been included in a block.

Miners check the mempools for unconfirmed transactions to include in the next block. Usually miners will select the transactions with the highest fees because when the miner successfully finds the next block they will be rewarded not only with the block reward of currently 12.5 bitcoin but also they get to pocket the transaction fees which can amount to half a bitcoin or more. Around 2000 transactions will be included in one block so you can see that the transaction fees can add up significantly.

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#249

  1. Full nodes holds a copy of the entire blockchain in order to be a miner and incentatived (solving cryptographic puzzels) when the PoW. An SPV just verifying certain transactions and are also incentatived (transaction fee) but less than a full node.

  2. A transaction sent to a part have to be accepted/verified by the network (minors) as correct/true before it can be accpted and reach the receiver.

  3. A miner picks transactions from the mempool and chooses the ones with the biggest reward (incentive to verify that the transaction is correct/true).

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#250
  1. A SPV do not have the hole copy of the blockchain. A node have the hole copy of the blockchain.
  2. When the transaction propagates to the blockchian network.
    3: Miners pick the transactions with the highest fees.
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#251

An SPV wallet doesn’t download the whole blockchain. It trusts the peers when they tell it that a certain chain is the longest. A full node has a complete version of the blockchain

When a transaction is broadcasted it is propegated to the network to be verified.

They will choose the transaction of highest value (sat/b)

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#252
  1. The difference between a SPV and a full node is that an SPV does not have a copy of the blockchain and needs to connect to the node to get the information. The node has the entire copy of the blockchain, verify it is correct and verify transactions.
  2. A transaction being broadcasted means it is propagated to all of the nodes or spread to all of the nodes .
  3. A miner picks transactions from a mempool and chooses the ones with the higher transaction fees.
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#253

  1. An SPV does not have a copy of the blockchain and needs to connect to a full node to get the information. A full node has the entire copy of the blockchain and can controle if all data is correct and verify transactions.

  2. every node in the network receives the validated and confirmed transactions

  3. the miner chooses the transactions with the highest fee from the mempool

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#254

Nice explanation @Bette :+1::ok_hand:

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#255

Miners are basically the same as full nodes, but they do something extra by trying to add blocks using proof of work. Every full node (also non mining node will verify all transactions (with their scripts)

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#256

Actually, most Spv’s will rely to more than 1 node. It would be bad security practice if some wallet uses information of only 1 node

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#257

Answer:

  1. SPV has only a partial representation of the blockchain, so it requires less memory to store data. It asks the trusted full nodes when it needs to verify the true state of the blockchain.
  2. Wallet broadcast transaction to nodes. It sends a message with a transaction. Nodes pick up that transaction and put it into the mempool.
  3. Miner looks inside the mempool and picks transactions with higher fees to be more profitable.
#258
  1. What is the difference between a SPV (simplified payment verification) and a full node?
  • A SPV does not have access to the entire blockchain whereas the full node does. The SPV will need to connect with a full node in order to get access.
  1. What does it mean when a transaction is broadcasted?
  • When a transaction is broadcasted, the transaction is made available to all nodes; thus, they will then need to verify the transaction.
  1. How does a miner pick which transactions gets added to the next block?
  • A miner picks which transaction gets added to the next block by determining which transaction has the highest transaction fee.
#259

  1. A SPV does not store a full copy of the blockchain, but instead relies on querying other nodes to get the information it needs.

  2. It is sent to other nodes on the network in order for it to be added to the mempool.

  3. Usually miners will pick transactions with the highest fees first in order to increase their revenue.

#260

  1. An SPV is a wallet that does not store the whole blockchain on it, and will get information from a full node to send transactions.

  2. When a transaction is broadcasted it means it is sent to the nodes across the network and waiting to be mined.

  3. If there are a lot of transactions to choose from in the mempool the miner will pick the ones with higher transaction fees.

#261

  1. An SPV gets the current blockchain data from a full node. Therefore, an SPV does not need a full copy of the blockchain.

  2. It is being received by the nodes.

  3. The miners will select the highest fee transactions.

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