Homework on Bitcoin Ecosystem - Questions

Blockchain and Bitcoin 101
#764

What is the difference between an SPV (simplified payment verification) and a full node? A full node has a complete copy of the blockchain ledger and all the rules of bitcoin are followed within that node whereas SPV is a technique to verify that a transaction is included in the bitcoin blockchain. Instead of downloading the entire block, the nodes that use it will download only block header which is much smaller than full blocks.

What does it mean when a transaction is broadcasted? It means that all nodes in the network receive the same data about the transaction just created.

How does a miner pick which transactions that get added to the next block? Miners pick transactions based on the associated fees. Miners mostly choose the transactions with the highest fees to include in the next block. If thereā€™s no congestion on the network, miners will include all transactions that have been relayed to them.

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#765

[1] The difference between a SPV (simplified payment verification) and a full node is that the SPV services a light weight node which only contains the headers of all blocks on the blockchain. This type of node is therefore smaller and thus are usually utilized by limited memory devices like cell phones. The SPV talks to a full node with all the blockchain info in them to confirm transactions.

[2.] A transaction being broadcasted simply means one node forwarding an unconfirmed transaction to another.

[3.] A miner picks which transactions gets added to the next block based on two things:
(a) The fee he/she will earning, and
(b) The byte size of the transaction
Which is equivalent to the $$$/Byte

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#766
  1. SPV canā€™t have all the blockchain to verify transactions but will trust and catch informations from some quantity of nodes in order to get the right transactions infos.
  2. when a transaction is broadcasted, it means the nodes validate the transaction and send it to the ā€œmempoolā€.
  3. The miner picks the transaction with the highest fee first, in order to get fees rewards after solving the block nonce.
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#767
  1. SPV or simplified payment verification nodes are nodes that query the Full nodes which own a full versions of the blockchain (80 Gb) that SPV doesnā€™t need to store. SPV nodes will request UTXOā€™s from the user to be confirmed by a full node which will then (if everything is correct) accept your transaction to be added to the mempool.
  2. A transaction is said Broadcasted when a soft-wallet or a SPV node has validated the existence of output UTXOā€™s of previous blocks linked to your wallet address and unspent yet. Those transactions are spread to mempools around the world meaning your transactions are due to be mined in a block, in exchange for the mining fee set in the transaction itself.
  3. Due to limited available memory space (max block size, 1Mb in Bitcoin), miners will pick specific transactions, that are smallest in size and more rewarding in terms of transaction fees, to get the best reward for their job, if they guess the correct nonce at requested difficulty for the block, before other miners do.
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#768

  1. What is the difference between a SPV (simplified payment verification) and a full node? SPVā€™s are small nodes that donā€™t have the entire blockchain. SPVā€™s will trust a full node when it wants to read the blockchain. SPVā€™s can query the blockchain from a full node. Full nodes have the entire copy of the blockchain and propagate transactions through the network.

  2. What does it mean when a transaction is broadcasted? It means that the transaction is being propagated to all the nodes to make sure the transaction makes sense and if there are sufficient funds for this transaction.

  3. How does a miner pick which transactions that gets added to the next block? A miner picks transaction from the mempool and they usually choose the transactions the the highest transactions fees sat/B.

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#769

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    its a smaller nod that doesnt have the full ledger of the blockchain and it broadcast to a full node to search for confirmation.It also requires a full node to send the transaction.

  2. What does it mean when a transaction is broadcasted?
    It propagates the transaction to the network.

  3. How does a miner pick which transactions that gets added to the next block?
    It picks the transaction with the highest tx fee and sat/bit. Based on how many transactions they fit in one block.

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#770

  1. A Full Node contains a full copy of the bitcoin ledger & is able to receive, validate and broadcast transactions throughout the network. An SPV contains a partial copy of the bitcoin ledger, which enables it to receive transactions, but must communicate with a Full Node to confirm and verify transactions.

  2. A broadcasted transaction means that a node received a transaction, confirmed it, then re-broadcast it to other nodes, which is then placed in the mempool.

  3. A miner can pick and choose any transactions to add to / build their own block. They are usually incentivized to select those with the highest sats per byte to gain a higher reward.

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#771

1. What is the difference between a SPV (simplified payment verification) and a full node?
SPVā€™s donā€™t store a complete copy of the blockchain (as do full nodes) so they have to request some information from the full nodes.

2. What does it mean when a transaction is broadcasted?
It is propagated (send to) all the nodes in the network.

3. How does a miner pick which transactions that gets added to the next block?
Most likely a miner will pick the transactions with the highest transaction fee.

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#772

Homework on Bitcoin Ecosystem - Questions

  1. What is the difference between a SPV (simplified payment verification) and a full node?
  • SPV wallets donā€™t store all UTXO data and must get data from full node
  1. What does it mean when a transaction is broadcasted?
  • Full node shares transaction with other full nodes
  1. How does a miner pick which transactions that gets added to the next block?
  • transactions with highest fee per KB
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#773

  1. SPV does not contain a full blockchain, does not validate blocks, does not maintain a mempool. It is basically very light version of node with less hardware requirements.
    ā€¦ like software wallet of app on the phone

  2. that means that signed transaction is sent from the wallet (SPV) to the nearest full node. full node checks if the transaction makes sense and is correct and then adds the transaction to the mempool. That nodeĀ“s mempool is then synced (broadcasted ) to another full nodes in the network.

  3. miner has a free choice to pick which transactions he wants to work with. Usually he picks the transactions with the highest fees (in sat/B) asiigned to them - for obvious reasons, he wants to get as high reward as possible

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#774
  1. What is the difference between a SPV (simplified payment verification) and a full node?
    A SPV does not have a full copy of the blockchain and has to communicate with a full node to check the validity of the transaction
  2. What does it mean when a transaction is broadcasted?
    A transaction has been put out there and issued to the mempool
  3. How does a miner pick which transactions that gets added to the next block?
    They pick the transactions with the higher fees first
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#775

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    The difference between a SPV and a full node is that a SPV is a lightweight client to check if a transaction has been added to a block in the blockchain and a full node is a complete version of the blockchain. The SPV connects to a full node to query the information needed.

  2. What does it mean when a transaction is broadcasted?
    When a transaction is broadcasted it is sent from one node to all other nodes on the network.

  3. How does a miner pick which transactions that gets added to the next block?
    Miners pick transactions based on the fees associated with them. Highest fees are prioritized and verified first.

#776

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    An SPV is a node that does not have a full copy of the blockchain. They will query their
    data full nodes. The wallet apps on our phones are good examples.

  2. What does it mean when a transaction is broadcasted?
    Your wallet will broadcast a transaction to the nodes in the network. It lets the nodes
    know through a signature associated with a private key that one or more UTXOā€™s need
    to be confirmed.

  3. How does a miner pick which transactions that gets added to the next block?
    Miners are incentivized to pick up and confirm transactions from fees and block rewards.
    The transactions offering to pay the highest fees are typically the first to be added to the
    block.

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#777

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    A SPV does not store the blockchain, need to query transactions from a full node to validate transaction.

  2. What does it mean when a transaction is broadcasted?
    When transaction is broadcasted it is put into the mempool awaiting miners to put tx to a block

  3. How does a miner pick which transactions that gets added to the next block?
    A miner typically picks transactions with highest fees first, this is how miners get paid for the work.

#778
  1. What is the difference between a SPV (simplified payment verification) and a full node?

A full node wallet stores a private key and constantly scans the blockchain for changes made to its address balance. It also stores recent transactions broadcast from other wallets in its mempool. It will construct, sign and broadcast transactions and check that the address has enough UTXOs to spend on a given transaction.
An SPV wallet also stores a private key and constructs, signs and broadcasts transactions but is unable to scan the blockchain for balance updates and UTXOs. To accomplish this it will contact one or more full nodes on the network and gather the information it needs.

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

After a bitcoin wallet has constructed and signed a transaction it will broadcast it to the network. This means it will be transmitted via the internet to nodes on the network who will store it in their mempool and propagate it further. Sooner or later a miner will then add it to their block.

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

A miner will pick the transactions with the highest fees first to maximise their reward.

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#779

Full node has a copy of whole blockchain and SPV only part of it. In case that SPV needs more data from blockchain it asks full node to send data to it.

Wallet broadcast the transaction to other nodes and spread across the network.

He is incentivized to choose these transaction which have higher fee.

#780

  1. SPV doesnā€™t store the copy a the blockchain and request it from a node instead. Whereas a full node has the entire copy of the blockchain.

  2. The transaction is accepted by the nodes and propageted through the network

  3. He picks the transactions with the highest fees out of the mempool

#781
  1. What is the difference between a SPV (simplified payment verification) and a full node?
  • keeps up to date by pinging and validating from the full node but does not keep the edger itself, useful for personal wallets. A full node keeps all utxo data in a ledger type format merkel tree for bitcoin but does not itself make transactions it just validates the chain
  1. What does it mean when a transaction is broadcasted?
  • communicating across nodes coming from wallet or spv
  1. How does a miner pick which transactions that gets added to the next block?
  • miners will pick tx with the highest fees paid first from the mempool to process
#782

Homework on Bitcoin Ecosystem - Questions

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    An SPV doesnā€™t have the whole blockchain in its data, it will communicate with a full node to get relevant info for the transaction it is processing, whereas a full node contains the whole blockchain.

  2. What does it mean when a transaction is broadcasted?
    A transaction is broadcasted when it is shared with the rest of the networks nodes.

  3. How does a miner pick which transactions that gets added to the next block?
    The transactions with the highest fees will usually be added before other transactions

#783

A full node has the full blockchain and can verify the whole blockchain.
A SPV does not have this information and is therefore not able to verify a transaction.
A SPV solves this by asking several full nodes if the transaction is valid. If all nodes share the same oppinion it concludes that the transaction must be valid (or not).

The transaction is transmitted to all connected nodes. This way it is distributed through the whole network.

Basically we donā€™t know. Each miner decides by itā€™s own which ones to pick. But in generall we can assume that they will pick the transactions with the highest satoshi per kB rate.