Homework on Bitcoin Ecosystem - Questions

Blockchain and Bitcoin 101
#1025
  1. A full node has a full copy of the block chain. An SPV does not. An SPV connects to a full node for various tasks that need the full blockchain.
  2. Its when a node propagates to the networks that its has transactions that need to be mined.
    3.It will picks the ones that will result in the highest rewards i.e. ones with biggest associated fees
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#1026

Homework on Bitcoin Ecosystem - Questions

What is the difference between a SPV (simplified payment verification) and a full node?
Full node has the complete copy of the blockchain.
SPV trusts on other nodes to check the blockchain, donā€™t have own copy.

What does it mean when a transaction is broadcasted?
A wallet sends a tx to nodes, the nodes check if tx makes sense, puts it in the mempool and sends it further to other nodes to do the same, until whole network checked tx.

How does a miner pick which transactions that gets added to the next block?
By picking tx w/ the highest transaction fees. The bigger the fees the more money the miner can make.

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#1027

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    Both SVP and a full node are computers on a bitcoin network. While a node holds a copy of all data in the entire block chain, an SPV only holds a portion of the blockchain. When an SPV needs more data of the blockchain for completing transactions, it communicates with a full node and look up the information needed.

  2. What does it mean when a transaction is broadcasted?
    After a transaction is created by a wallet, it will be put into the mempool of a node. The updated mempool will be copied by the mempool of another node, and eventually, the new transaction will be copied ā€“ broadcast ā€“ to all mempools on all nodes on the network.

  3. How does a miner pick which transactions that gets added to the next block?
    Miners are incentivized to first pick transactions which have more inputs and outputs because the transaction fees rewarded to miners are in proportion to the data size (in kilobytes) of individual transactions.

#1028
  1. What is the difference between a SPV (simplified payment verification) and a full node?
    An SPV does not contain the full block chain. Rather, it communicates with a full node, which does contain the full block chain to verify whether a transaction can occur.
  2. What does it mean when a transaction is broadcasted?
    When a transaction is broadcasted, it is sent to the nodes of the network.
  3. How does a miner pick which transactions that gets added to the next block?
    Miners select transactions from the mempool, generally ones with the highest transaction fees.
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#1029

  1. An SPV does not store a local copy of the blockchain, it fetches the data from other nodes in the network that do have a copy of the blockchain.

  2. It is propagated throughout the network between nodes

  3. They usually pick the tx with the highest fees because their incentive to mine and keep the security of the network lies in getting the block reward and fees from that block.

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#1030
  1. What is the difference between a SPV (simplified payment verification) and a full node? A SPV doesnā€™t have the full Blockchain and must refer to a node to receive full information. A mobile phone with a wallet could be an SPV.
  2. What does it mean when a transaction is broadcasted? Your wallet creates and signs a transaction and must send it out to the network so that the nodes can compare it to the Blockchain to make sure it makes sense, the nodes use consensus to validate the transaction after which it enters the mempool awaiting confirmation.
  3. How does a miner pick which transactions that gets added to the next block? He may choose those with highest transaction fees IE satochi per byte. Or he could choose a transaction with s very small byte to fit on his block?
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#1031
  1. A full node will have a complete copy of blockchain on it, as an SVP does not have a complete copy of the blockchain and will need to link to a node and sink to get the data. Usually a full node is used on stronger computers such as a home computer as the SVP is used in smaller units such as phones.
    2.That the tx will spread in between the nodes from the closest physically to the miner and in 10 min max the information will spread to all the nodes on the network.
    3.From the mempool and he will choose buy the biggest difference between the input of the tx to the output, which is his tx fee.
#1032

Hi there!! Maybe not only the private keys, but enough information to confirm your wallets balances and transactions, but it connect to other nodes to broadcast transactions and sync.

#1033

Hi there!

Maybe not only in a mobile phone, as you can also have it on your pc or a hardware wallet.

When you broadcast a tx, you send it to other nodes so they propagate it through the whole network, and add it to the mempool, so it will later be picked up by a miner and included in a block (confirmed)

Hope that helps!

Felipe.

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#1034

Hi There! Maybe not computers specifically, but participants, as it can be a mobile phoneā€¦

Its better to say that they pick the transaction comparing tx size and the fees, as a person can send a transaction with lots of inputs and outputs and low fees, or also one input and one output with high fees.

Hope that helps!!

Felipe

#1035

1- SPV are nodes that donā€™t have the full blockchain, so they have to query a full node to read the blockchain. A full node contains a lot of gigabytes, so a device like your phone, which canā€™t have a full node on it, will instead have an SPV.
2- This means that it goes out to the network of nodes.
3- Since miners are financially incentivized, they go for the Tx with the highest fees.

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#1036

Hi there! They may do that, but the idea first is to get the most transaction fees possible, and also donā€™t spend a lot of time doing this, as this is a race, and the most juicy reward is the block reward (6.25 BTC). Once a miner confirms a block, you need to start again!

Hope that helps!

#1037

Hi there! Actually, the broadcast is only to spread your transaction through all the nodes, including miners, so they pick it up and include it in a block. The 10 minutes is a different param, which is the average time that miners resolve new blocks and add them to the chain.

Felipe.

#1038

  1. An SPV is a node that doesnt have the a full copy/version of the blockchain and it must check with full nodes to get updated about transactions related to the wallet/address of the SPV.

  2. A transaction is contructed by a wallet and then broadcast to the network where a node will pick it up verify it and put it into the Mempool for a miner to use.

  3. A miner will search in the Mempool of the network and pick the transactions with the highest fees and will add them to the block that is being mined.

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#1039
  1. an SPV is a lite wallet that refers to another node to look up the blockchain instead of holding the blockchain itself.
  2. The transaction is sent across the network to all nodes for verification.
  3. The block with the highest transaction fee.
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#1040
  1. A simplified payment verification doesnā€™t have a copy of the blockchain, it queries a full node nearby.
  2. A transaction is broadcasted when it propagates all through mempools and nodes
  3. A miner picks transactions that have higher UTXOs
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#1041

1. What is the difference between a SPV (simplified payment verification) and a full node?
SPV Wallets do not have all the UTXOs and must get more data from a full node.

2. What does it mean when a transaction is broadcasted?
Means it been propagated to all the nodes or spread to all the nodes.

3. How does a miner pick which transactions that gets added to the next block?
Chooses the ones with the higher transactions fees

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#1042
  1. An SPV can be used in wallets or apps to stream the UTXO from the full nodes. Full nodes store the total UTXO data for the network.
  2. I f transaction has been broadcasted it means that it has been sent to the mem pool with other transactions, waiting to be verified.
  3. The miner will pick the transactions that are worth the most transaction fees for the next block.
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#1043

Hi Felipe,

Thanks for your feedback.
Iā€™m a bit confused about transaction size and fees. I got the impression from the lecture that transaction fees are correlated with size (that is the amount of inputs and outputs), so I donā€™t quite get the scenario where a big transaction can have lower transaction fees compared with a smaller transaction ā€¦
Much appreciated if you could shed some light on this.

Best,

Eric

#1044
  • What is the difference between a SPV (simplified payment verification) and a full node?
    SPV stores transactions relevant to its addresses on the other hand full node has the whole blockchain stored in it and continuously updating it
  • What does it mean when a transaction is broadcasted?
    When a transaction is completed it gets confirmed to form a block which gets appended to the previous block and tit gets broadcasted to the whole network.
  • How does a miner pick which transactions that gets added to the next block?
    Miners pick transactions with the higher transaction fee.
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