Homework on Bitcoin Ecosystem - Questions

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

An SPV is a light weight node that only has parts of the blockchain data while a full node has an entire copy of the chain. the SPV will query a full node for information

What does it mean when a transaction is broadcasted?

a transaction is broadcasted from a wallet to the nodes on a network which is then added into the mempool

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

the miner will look for the transaction that offers the best satoshi per byte ratio. i.e. where the fees are the highest for a transaction

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  1. SPVs doesn’t have a copy of blockchain. SPVs reading blockchain from full nodes.

  2. Means that transaction is propagated trough network and is waiting to be picked up by miner from mempool.

  3. By size transaction (sat/B) Higher size = higher reward for miner.

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  1. Full nodes store the whole copy of the blockchain whiles SPVs only store transactions that are only relevant to it’s addresses. SPVs trust the full nodes to read transactions.

  2. A transaction is broadcasted when a UTXO is propagated across the network to nodes and these nodes also spread it to all other nodes.

  3. A miner always picks the transactions with the highest fee (sat/B) to maximize his profits.

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  1. Full nodes store the whole blockchain, verify the transactions and they update the blockchain; SPVs are simplified payment verification and do not contain the whole blockchain. They will query the full nodes to get information.

  2. It means that a transaction is propagated among other nodes.

  3. A miner chooses the transactions with the highest fee.

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Glenn_CostaRica

1. What is the difference between a SPV (simplified payment verification) and a full node?
A full node is an operating station that keeps an updated full version of the blockchain, that serves as a security point that verifies constantly that rules are being respected by miners and by all users of the network, and that also serve as a first instance of attention for new transactions that need to wait in the mempool before being mined. An SPV, on the contrary, is a kind of mini-node that shows some of the behaviours and functions of a node, but in a very limited way. Basically, an SPV is a node-like system that does not store the whole blockchain and cannot provide all the services of a full node, but that is directly connected to a full node and, therefore, can provide services indirectly. Usually, smart phone Bitcoin wallets are SPVs, for example. The level of security and reliability of an SPV will depend on many factors like who is the developer of the SPV and on the full node it depends on.

2. What does it mean when a transaction is broadcasted?
It means that the package of data that the transaction consists of, is sent to other nodes, usually to as many nodes as possible.

3. How does a miner pick which transactions that gets added to the next block?
First, the miner will look for transactions that its own node and other nodes keep in the mempool. All transactions that are waiting to be mined are in the mempool. If the amount of transactions in the mempool does not exceed the capacity of one block, then, probably the miner will take all the transactions he can and mine them. If the number of transactions in the mempool exceeds the maximum capacity of a block, then, the miner will usually take the liberty of choosing those transactions that offer the highest incentives, or higher fees.

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  1. The SPV accesses data from the Node. It’s like using your phone to check if a transaction wenth through or not. You don’t store the blockchain on your phone, you use it to query a node. That’s what an SPV is.

  2. It means that it has been accepted by the node and is being sent into the mempool of every node before being picked up by a miner.

  3. By processing them through order of descending satoshi per byte transaction fee.It does all a node does, verify its validity, then puts in on its block candidate. If the hash of that block, the previous one and the nonce taken together gives another hash that is below the difficulty level then a new block gets added.

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Q1: A SPV can be anything that does not read the full blockchain bc it is not capable of holding such info on its own. An example would be a smartphone bc it needs to query the full blockchain data from a node in order to read it.

Q2: A transaction is broadcasted when it is sent to the mempool and is awaiting verification from a miner. This means the nodes have accepted the TX and are sharing this info with other nodes to update the blockchain.

Q3: Miners are incentivized by the amount of satoshi/byte for each TX that occurs as well as block rewards for verifying TX’s. Miners have full disclosure as to which TX’s they choose to mine because they must spend a lot of energy to verify the TX’s , so ultimately they choose the blocks that would give them the highest rewards.

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  1. SPV’s are nodes without the full blockchain and needs to communicate with a full node which has the blockchain for validation.

  2. When a transaction is broadcasted, it sends data through the nodes for verification. For example sending 1 bitcoin from a wallet to a public key, a transaction is broadcasted to check the validity of this UTXO on the blockchain before confirmation. Wallets broadcast and or receive transactions.

  3. A miner chooses which transactions to add to the next block based on the highest fees as incentives. Fees = Satoshi/byte, a transaction with multiple inputs and outputs has higher byte resulting in more satoshi and therefore preferred transaction for a miner.

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  1. Unlike a full node a SPV is a node that does not have the full blockchain. This is a small node that trusts a full node to read the entire blockchain. So you wouldn’t have to have the entire blockchain downloaded but could query a full node with an SPV.

  2. When a transaction is broadcast it is sent from a wallet across the network to various bitcoin nodes to await confirmation.

  3. Miners spend a lot of money (on electricity) and time mining blocks, so they naturally pick transactions with the highest fees to yield the highest reward.

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  1. An SPV is an incomplete node generally stored in a wallet .

  2. This is when a full node accepts a transaction and it is is added to the mempool.

  3. A miner will pick transactions with the highest satoshis per byte ratio first.

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

A SPV doesn’t store the Blockchain (all the information with previously blocks and their transactions etcetera). A phone for example, that connect to a full node to get that information about the blockchain.

  1. What does it mean when a transaction is broadcasted?
    The wallet has used the private keys to create (and sign) an UTXO, this is put to the Mempool by the nodes by accepting the new transactions and propagate it through the network.

  2. How does a miner pick which transactions that gets added to the next block?
    They usually pick the transactions with highest TX fees because that the way they earn money.

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1: An SPV does not have a copy of the block chain where a full node does. SPV can be a mobile device like a cellphone.
2: It is sent out to the nodes so it can go into the mempool and wait to be mind and confirmed.

3:He picks based on transaction fees generally the highest fees get picked first.

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  1. The difference is that full nodes store the entire block chain, where SPV will store only relevant transactions which are related to the addresses.
  2. When a transaction has been broadcasted its result is a propagation to all the nodes.
    3.Miners are pragmatically picking the transaction with the highest prizes to bit ratio.
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  1. What is the difference between a SPV (simplified payment verification) and a full node? A full node has the complete blockchain, the SPV has a short version that has access to quarry the blockchain for confirmation of transactions.
  2. What does it mean when a transaction is broadcasted? it has been sent out to the nodes in the network for full confirmation
  3. How does a miner pick which transactions that gets added to the next block? They choose the ones to gain them the most return for their cost.
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  1. A full node contain the full blockchain whereas an SPV does not (smaller devices, ex mobile phone…). The SPV instead querries the fullnode regularly to check the blockchain and either send btc or check UTXOs for your balance.

  2. It means that your transaction has been validated and included in a valid block, that is then broadcasted to all the nodes on the network to be added to the blockchain.

  3. A miner picks from the mempool transactions with the highest fees since they are here to make money.

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1- Full nodes contain the whole blockchain and SPV contain some UTXO’s, but might need to access a full node to get some data if necessary

2-That the transaction has been spread through the nodes and accessible to anyone to verify

3- The transaction with the highest fee will be picked first

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  1. An SPV only contains part of the blockchain, but can query it all the time. It can generate transactions, a full node cannot.
  2. It is ready to be verified by the network of nodes.
  3. It picks unverified transactions with high fees.
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  1. SPV only communicates/verifies/ TX’s while a node keeps a record of the whole blockchain

  2. Any wallet can broadcast a a TX if it is valid by the nodes it will be accepted into the mempool to be confirmed by the miners.

  3. Miner is looking for highest transaction fees to include into the block

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

  • A full node stores the full version of the blockchain and can act directly based on that data, an SPV must query the blockchain to some node, so they require a full node to work

What does it mean when a transaction is broadcasted?

  • It means that a transaction it’s has been accepted by a node and the node it’s propagating it in the network

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

  • Miners picks transactions with the higher sat/B
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An SPV doesn’t have the entire blockchain data and must query the rest of the data from a full node.
A Full node has the entire blockchain (all the transactions ever been made)

Is the moment when a wallet given a valid input and output send the transaction to the the nodes that then start sharing each other (if is valid). The transaction will remain waiting in the mempool of the node waiting to get picked up from the miner to be confirmed.

The miner gets the transaction from the mempool of the nodes , he will choose first the transactions with the higher fees.

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