Homework on Bitcoin Ecosystem - Questions

Blockchain and Bitcoin 101
#342
  1. SPV doesn’t store the whole blockchain.
  2. The transaction is added to the mempool.
  3. The miner picks the transactions that will fit in the block to give it the highest total fees.
#343

  1. An SPV is not a complete node, it may hold none of the blockchain loally. Rather it queries nodes in order to confirm txn. A full node, on the other hand, hosts the full blockchain locally.

  2. A txn is propagated throughout the network of nodes. Nodes then store the txn in the mempool where it awaits until mined into a block

  3. Miners select txns with the most lucrative txn fees.

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#344
  1. The difference between a SPV and a full node is that a SPV does not have a copy of the blockchain and needs to connect to the node. A node has the full copy of the blockchain.
  2. Broadcasted means the transaction is propagated to all the nodes.
  3. Miners pick the highest transaction fees in the mempool.
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#345
  1. The SPV don’t have the full copy of the network - like phones for example.
  2. It is send to the mempool for the miners to pick up.
  3. Usually the miners are picking up the transactions with higher fees.
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#346

  1. unlike a full node, with an SPV node you can verify if a transaction is included in a block without having to download the entire block.

  2. when a transaction is broadcasted it means that it is no longer a UTXO and it enters the mempool.

  3. the miners will pick the transactions with the highest transaction fee because that means more profit for them.

#347

  1. An SPV (SimplifiedPaymentVerification) is a technology that speeds up transaction verification queries by not keeping a full copy of the UTXO data stored on the blockchain, instead an SPV queries a full node for verification.

  2. When a tx is broadcasted is sent from a wallet to the network to be selected.

  3. A miner chooses transactions from a mempool, and optimizes for which tx’s by searching for the highest fees associated.

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#348

1- SPV wallets don’t have a complete copy of the public ledger, they need to consult on full nodes to verify existence of UTXOs and transactions.

2- When your wallet send any particular transaction to the network for being validated by the consensus.

3- they search through the mempools for the transactions with the higher fees per bytes, to build their blocks.

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#349
  1. A SPV does not run a full copy of the blockchain. It queries a full node.
  2. The transaction is propagated to the nodes in the network.
  3. The miner chooses the transactions with the highest fees.
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#350
  1. What is the difference between a SPV (simplified payment verification) and a full node?

SPV does not have a full blockchain. It has to communicate with a full node. SPV can be a mobile phone.

  1. What does it mean when a transaction is broadcasted?

IT means that the wallet is created a valid TX from the UTXO and wish to put this TX on the blockchain/network to be confirmed.

  1. How does a miner pick which transactions that gets added to the next block?

They usually pick the TX which has the higher fees, because all the fees goes to the miner.

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#351

  1. an SPV (small node) which doesn’t contain a full copy of the blockchain and trust a full node when wants to read the block chain.
    On the other hand, a Node is in the network and contain a full copy of the blockchain.

  2. a broadcasted transaction is a transaction that has been shared between nodes all around the network.

  3. A miner most likely would pick a transaction from the mempool with the highest fee.

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#352

Homework on Bitcoin Ecosystem - Questions

  1. What is the difference between a SPV (simplified payment verification) and a full node?

Ans: Full nodes have all of the verified and confirmed transactions, but the SPV does not as it stores only information relevant to what has been done locally versus globally.

  1. What does it mean when a transaction is broadcasted?

Ans: When a transaction is broadcast, then it is sent across the entire blockchain for everyone to see.

  1. How does a miner pick which transactions that gets added to the next block?

Ans: A miner will usually pick the transactions that have the highest fees involved since they are incentivized by earning money and want to earn the most possible, but this is not a rule that must be followed.

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#353

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    SPV is a simplified ‘node’ that queries real nodes to verify Tx’s, has a smaller footprint than a full node, and can be used on mobile phones or where storage space is limited.

  2. What does it mean when a transaction is broadcasted?
    It has been placed into the mempool and is ready for the network to pick up and place in a block.

  3. How does a miner pick which transactions that gets added to the next block?
    Usually the UTXO’s that have the greatest fees, to ensure the most value is gained per block.

#354
  1. The difference between a SPV (Simplified Payment Verification) and a full node is that an SPV does not hold the full block chain information locally and has to reach out to a full node (who has a copy of the entire blockchain saved locally) to verify transactional data. A full node has this information saved in its entirety.

2.When a transaction is broadcasted it is propagated to all nodes and put into the mempool waiting to be hashed into the blockchain by a miner.

  1. Miners pick which transactions get added to the next block typically by the fee/block reward as it is the most worthwhile for them to mine.
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#355

Utxo’s are only a part of the transaction. They are available funds to spend in a transaction. In a transaction you can change the property rights of these funds to other addresses.
So miners will look only at the transaction fee to prioritize

#356

Thank you for the correction Fabrice, I should have replaced UTXO with Transactions.

#357

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    A SPV doesn’t have a full copy of the blockchain and only store some relevant transactions to its addresses. In order to access the full blockchain, a SPV queries a full node since it contains the complete version of the blockchain.

  2. What does it mean when a transaction is broadcasted?
    It means it is propagated to other nodes in the network and will stay in their mempool until further confirmation.

  3. How does a miner pick which transactions that gets added to the next block?
    Usually, miners choose the transactions with higher sats/byte to add to their blocks as it’s more profitable.

#358
  1. What is the difference between a SPV (simplified payment verification) and a full node?

An SPV does not contain the full version of the blockchain. It is “smaller” in that it requires less storage space. You might use it in a phone or device that has less storage space. Before broadcasting a transaction a full node checks the UTXO of the transaction against the entire chain. An SPV must communicate with full nodes in order to confirm the validity of a transaction since it does not contain the entire chain.

What does it mean when a transaction is broadcasted?

It means that a node has sent the transaction on into the network. It is then picked up by other nodes that are connected to it and it is propagated throughout the network. At that point it is entered into the mempool and can be mined and added to a block.

  1. How does a miner pick which transactions that gets added to the next block?

A miner typically chooses a transaction from the mempool that has the highest fee.

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#359

  1. A SPV doesn´t have the full Blockchain, it must ask Full Nodes for all the information that it needs.
    SPVs are mostly used in wallet applications for smartphones, where there is not enough space to store the full blockhistory. Full Nodes do have the most recent version of the full blockchain.

  2. When a Wallet signs a transaction it has to spread this information to the whole network for them to verifiy it and include it into a block. this process is called broadcasting a transaction.

  3. if there are more transactions inside the mempool, than the miner can fit inside his block, he will choose the most profitable transactions for him, which means he will choose the transactions by satoshis per byte resulting in higher fees are getting prioritized.

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#360
  1. What is the difference between a SPV (simplified payment verification) and a full node?
  2. What does it mean when a transaction is broadcasted?
  3. How does a miner pick which transactions that gets added to the next block?

  • SPV allows a lightweight node client to verify that a transaction is included in the bitcoin blockchain, without downloading the entire blockchain.
    The SPV client only needs to download the block headers, which are much smaller than the full blocks. To verify that a transaction is in a block, an SPV client requests proof of inclusion in the form of a Merkle tree.
    Simple Payment Verification clients offer more security than web wallets because they do not need to trust the servers with the information they send.

  • Validated on the blockchain.

  • Miner perfers transactions with highest sat/byte.

#361

  1. SPV is not technically a full node, as it does not possess the entire blockchain. It queries a full node to validate the transaction before sending it on to be placed in the mempool.

  2. A transaction is broadcasted by sending it to a node(s) to be included in the mempool to be picked up by a miner and inserted into a new block.

  3. A miner will typically pick the transactions that will make him the most money (paid higher fees, etc.)

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