Homework on Bitcoin Ecosystem - Questions

Blockchain and Bitcoin 101
#824
  1. Full nodes store the whole blockchain while SPVs mostly store transactions relevant to its addresses and requires a full node to send transactions.
  2. Full node shares transaction with other full nodes.
  3. Picks transactions offering the highest fees.
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#825

1)An SPV is normally used on a mobile device. Its purpose is to make requests to the nodes to query the blockchain. It does not store the blockchain locally, where as a node stores a full version of the blockchain locally and it can verify, reject or propagate transactions and blocks.

  1. It means that the transaction is spread throughout the network to be validated and accepted into the blockchain.

3)Miners will chose their transactions based on the amount of fees payed to carry out the process per transaction. They will also make sure they can fit the maximum amount on their block so size plays a part as well.

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#826

  1. SPV dont have utxo information i.e a copy of the blockchain, Node in the other hand has a copy of this information and can verify transactions.

  2. Broadcasted to the other nodes for all to see.

  3. Pick from the mempool, they will pick the txs with the highest transaction fees.

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#827

  1. A SPV is not a full copy of the blockchain. It must contact a full node to verify a TX.

  2. A TX is broadcasted when it is essentially announced to the network.

  3. Miner’s typically pick TX’s with the highest fees.

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#828

1- SPV is a smaller version of a node which does not have the local ledger on them and has to connect to a full node to access the ledger. A full node has a local ledger on their system.

2- This is when the transaction has been broadcasted by the wallet into the blockchain for confirmation.

3- Miners pick which transaction gets added to the next block based on the transaction fees which best help their profitability

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#829

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    SPV relies on the whole blockchain (full node) to query about its transactions. While a full node has all the copies of data/transactions stored in blockchain.

  2. What does it mean when a transaction is broadcasted?
    It means that a transaction is being put into the data structure of all nodes/computers in the network.

  3. How does a miner pick which transactions that gets added to the next block?
    Miners choose the transactions with the highest fees. This is an incentive for their work and thus will cover their electricity expense as well.

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#830

Thank you for the reply, got it now.

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#831

1 SPV it is a wallet which doesn’t store whole blockchain data, it only asks other nodes for this data
2 It means that transactionn was made from some wallet and it send information about it to other nodes
3. it will take them from the mempool, he will be incentivesed to take those with highest fee

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#832

— My answers —

  1. While full nodes store the whole blockchain, SPVs have only a small portion of it and need to communicate with full nodes in order to fetch the updated state of the database.

  2. A tansaction is broadcasted when is sent to other nodes and therefore propagated in the network. It will be initially stored in the mempool, then picked up and validated by miners.

  3. Miners fetch new transactions from the mempool. The priority is generally proportional to the amount of fees that the transaction grants.

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#833

Thanks @Mauro. It helped me a lot. Taking advantage of your comment… is there any consolidated mempool considering all the mempool’s node? How does the miners know which TX are the most feed?

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#834
  1. What is the difference between a SPV (simplified payment verification) and a full node?

A full node has the entire chain an spv does not.

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

A broadcasted transaction is a transaction that has been submitted to the chain and awaits validation and subsequent propagation.

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

The less data the cheaper and therefore better. Also the highest fees. (Miners keep those)

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#835

The SPV only has access to verify the blockchain and complete blockchain is large that it cannot be stored in a mobile device hence only stored relevant transaction data. The full node has a complete updated blockchain.

send/upload transaction data to the network.

Choosing to mine the transactions offering highest fees/reward.

#836

  1. An SPV wallet does not store a full version of the blockchain - it queries other nodes on the network to verify which UTXOs sets belong to the wallet’s private keys and updates the user’s balance accordingly. Full node wallets store a local copy of the blockchain - they can verify the wallet owner’s balance without querying other nodes…

  2. When a transaction is broadcasted, the user’s wallet propagates the sender’s request to transfer BTC to another address (along with a digital signature authorizing the transfer) to all the nodes on the network.

  3. A miner will select transactions from the mempool based on the transaction fee that the sender was willing pay. Transactions with higher fees will typically get mined first when the mempool is overloaded.

#837

  1. A full node listens to and propogates a transaction. While an SPV (simplified payment verification) is considered a node, it does not control an entire blockchain like a full node does. Basically, it is a small node trusting a full node.

  2. When a transaction is broadcasted, that means the money is sent to several people at one time; some can even be sent back to yourself.

  3. A miner picks which transactions that get added to the next block by mining in PoW (Proof of Work). He will always choose the longest chain to add transactions to a block.

#838

1.the difference between a spv and an full note is an spv do not store all utxo data and must get the data from an full not
2.an transaction is broadcasted when an full node send the trasaction too the full nodes
3.an miner perfers trasactions with the highest fee per kb

#839
  1. A SPV doesn’t record the full bitcoin ledger locally, but connects to full nodes to check validity of transactions. The full node instead holds the entire history of the ledger locally on its computer.
  2. As soon as someone decides to make a transaction the wallet of that user propagates that transaction to the entire network so all nodes can add this transaction to their mempool for miners to potentially include the transactions in their next block
  3. Miners choose transactions that pay the most fees
#840
  1. An SPV is not a full node because it uses for its payment verification not a full copy of the blockchain but only a copy of the chain of block headers.
  2. It means that the transaction is made available for inspection by the network’s nodes and for inclusion in the mempool in case that it passes the inspection.
  3. Miners pick the transactions with the highest attached transaction fees because the transaction fees are part of the miners’ financial rewards.
#841

  1. SPV only store some of the blockchain data while it depends of querying full nodes while a full node stores all of data.

  2. When nodes send transaction data to other nodes

  3. They base it mostly on fees.

#842

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

    An SPV can view the blockchain that a node has but nothing else. A node has a copy of the blockchain and puts unconfirmed transactions into the mempool.

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

It is a transaction that gets put out into the network to be picked up by a node and put into a mempool to be confirmed by a miner.

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

    A miner chooses a transaction with the highest fees.

#843

SPV’s are verifications that are made offline (not connected to the network [live blockchain]). They have the blockchain loaded but it may not be in sync with the online nodes. Basically it works with what it has onboard…

To broadcast the UTXO it is sent out ‘online’ into the various nodes on the network.

Gerry McGuire Algorithm…‘show me the money’, the UTXO with the highest TX fee