Homework on Bitcoin Ecosystem - Questions

Blockchain and Bitcoin 101
#502

Home work on Bitcoin Ecosystem -

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

An SPV is a simplified payment verification which allows you to communicate with the blockchain network without having a complete copy of the bloakchain on your device. This is great configuration for a smart phone.

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

When your wallet broadcasts a transaction, it is sending a message to the miners on the network to process and verify the transaction.

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

A miner is incentivized by mining rewards and transaction fees so it will prioritize processing transactions based on the fee associated with the transaction.

#503

  1. SPVs are ‘lightweight’ nodes that will transmit when specific transactions are verified without downloading the whole blockchain. Nodes include the full blockchain.

  2. Transactions are broadcasted to the network, meaning it is added to the mempool waiting to be confirmed.

  3. Miners pick the transactions with the highest available incentives.

#504
  1. SPV polls and trusts a full node on which a copy of the blockain is.
  2. It is sent in the mempool for approval.
  3. The miners picks the transaction with the highest transaction fee.
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#505

SPV does not have a full copy of the blockchain and needs to query a full node in order to access the full data

It means your transaction information has been sent to the node operators and is sitting in the mempool awaiting confirmation.

Miners generally pick transactions based on the size of the fee with the transaction. Higher the fee, the higher the probability of being picked up first.

#506

  1. A node has a full copy of the blockchain. A SPV is a smaller node that doesn’t have a full copy of the blockchain but rather relies on other full nodes from which it queries the full chain.

  2. It means that the transaction is transmitted from node to node, which will update the new blockchain so it includes the transaction.

  3. A miner will prioritise transactions with the highest fees (in satoshis per bytes) so their block has a better profitability.

#507
  • What is the difference between a SPV (simplified payment verification) and a full node?
    Both are able to communicate with the network. An SPV holds some block information and generates transactions. A full NODE cannot create transactions but verifies them for the blockchain
  • What does it mean when a transaction is broadcasted?
    A broadcasted transaction comes from a wallet or SPV and is broadcast across the network of nodes
  • How does a miner pick which transactions that gets added to the next block?
    Miners generally choose the transaction with the highest fees from the mempool
    [/quote]
#508

Homework on Bitcoin Ecosystem
What is the difference between an SPV (simplified payment verification) and a full node?

An SPV does not have the entire blockchain stored locally. This is because it is a smaller device without the amount of space that a node would require. In such cases, the SPV queries the blockchain of the node closest to the SPV to verify a transaction.

What does it mean when a transaction is broadcasted?

A transaction being broadcasted means that the transaction is being propagated from one node to the other and eventually to the entire network.

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

Miners are trying to make money. Miners make money off of inflation and transaction fees. Miners will try and pick transactions that will give the most rewards. These will be transactions with the highest transaction fees.

#509

  1. A full node keeps a full version of the blockchain that is updated continually with the mining of each new block. It is rather large in size and many devices do not have the storage capacity to run a full node. SPV walletss solve this problem, making it possible for mobile devices to run bitcoin wallet applications. SPV wallets are not themselves nodes but rather they query nodes, and only about the particular blocks that contain the user’s transactions.

  2. When a transaction is broadcasted, the wallet sends it to nodes which then broadcast it among themselves until it spreads throughout the network. It enters the mempool which is a part of every node. But it has not yet been confirmed nor therefore is it part of the blockchain. Mining nodes choose transactions from the mempool to construct a block. It is only after miners have mined a block containing that transaction, and optimally, after several later blocks, that the transaction is considered to be unalterably part of the blockchain.

  3. The miner will tend to choose those transactions that have the highest fees.

#510
  1. An SPV is a platform that cannot incorporate all the information of the blockchain so it trusts the information of one node.
  2. The transaction is signed by the wallet and sent out into the network for everyone to see and it makes it open for critique if it is valid or not.
  3. Depending on the fee of the transaction. Miners gets paid in transaction fees and therefore the higher the transaction the higher the chance of being picked up by a miner and becoming a confirmed transaction.
#511

  1. An SPV access the blockchain by referencing a full node and does not have the blockchain stored on it. A full Node has the entire blockchain on it and also can mine and propagate blocks.

  2. The Transaction is touted to the entire network after UTXO’s are confirmed and propagated. thus syncing the blockchain.

  3. A miner would pick tx’s from the mempool, usually with the highest transaction fees.

#512

  1. A SPV needs to log into a complete Node because it does not save the node.
    The SPV creates transactions and keeps your private key.

    A Node keeps a full copy of the Blockchain, does not create Tx’s, runs the Mempool and
    communicate with other Nodes.

  2. A Node gets a transaction broadcasted buy a SPV or Wallet.

  3. By using Mempools the Miner will fill the new block with transactions. If there are too many
    transactions for one block the miner is most likely to pick the transactions with the highest fees
    per byte.

#513
  1. What is the difference between a SPV and a full node?
    • An SPV only holds the private keys but does not contain the full blockchain. It relies on queries to other full nodes in order to obtain data about UTXOs that can be spent with the wallet’s private keys
  2. What does it mean when a transaction is broadcasted?
    • It means that a valid transaction that has been signed is sent from one node to the next. This valid transaction is then added to the mempool of the various nodes that receive that transaction.
  3. How does a miner pick which transactions that gets added to the next block?
    • Miners are incentivized to pick transactions that pay the largest amount of satoshis per byte.
#514
  1. SPVs are small nodes. Thus they only contain part of the blockchain and trusts a full node when they want to read the blockchain.
  2. It’s when a UTXO is being propagated globally throughout the network to all nodes and placed in the mempool. Eventually it will be confirmed by miners and put in the next block.
  3. Miners pick based on incentive. They then pick the TXs with the highest fees first.
#515

What is the difference between a SPV (simplified payment verification) and a full node?
An SPV does not maintain a full version of the bitcoin blockchain whereas a full node does. This means an SPV has to request the detaiuls of the full blockchain from a full node in order to submit transactions.

What does it mean when a transaction is broadcasted?
This means that a transaction is sent out to the bitcoin network and transmitted to all bitcoin nodes. The transaction is then added to the mempool ready to be mined.

How does a miner pick which transactions that gets added to the next block?
The miner chooses the transactions itself and will usually pick the transactions which pay the highest transaction fee per bit in order to maximise profit.

#516

Screenshot 2020-05-01 at 16.58.40
Screenshot 2020-05-01 at 16.58.401326×1228 342 KB

#517

What is the difference between a SPV (simplified payment verification) and a full node?
An SPV is a smaller than a full node and only carries private key and transaction information. Transactions are broadcast from a full node.

What does it mean when a transaction is broadcasted?
The transaction is propagated through a full node to all other nodes on the network.

How does a miner pick which transactions that gets added to the next block?
From the mempool, the transactions with the best sat to bit rate will get chosen first. To make more profit.

#518

  1. A full node has all access to a copy of the blockchain, while a SPV has to connect to a node to get that blockchain information.

  2. When a transaction is being broadcasted it is propagated throughout all of the nodes in the blockchain network.

  3. The miner goes to the mempool and picks the transaction with the highest fees.

#519
  1. An SPV is a wallet/platform that displays the UTXO data, but does not store it. A full node contains the UTXO data.
  2. When a transaction is broadcasted, it mean that it has been shared with other nodes and is waiting to be confirmed as the version truth.
  3. A miner usually picks the transactions based on the transaction fees associated.
#520

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    SPV is sth. Like a mobile application that has not stored the whole blockchain in it. Instead it sends query to a connected node to get the appropriate information it needs from blockchain

  2. What does it mean when a transaction is broadcasted?
    It is shared within the network (nodes) to be verified and added to the mempool

  3. How does a miner pick which transactions that gets added to the next block?
    Fee amounts descending …

#521

  • What is the difference between a SPV (simplified payment verification) and a full node?
    The SPV does not have the whole blockchain downloaded and is therefore dependend on full nodes to ask.

  • What does it mean when a transaction is broadcasted?
    It sends the transaction to the network. (unconfirmed at this time)

  • How does a miner pick which transactions that gets added to the next block?
    This is based on the fee. Higher fees will be validated first.