Homework on Bitcoin Ecosystem - Questions

Blockchain and Bitcoin 101
#1045

What is the difference between a SPV (simplified payment verification) and a full node?
A SPV does not have the blockchain. It only interacts with a node that does to broadcast transactions.

What does it mean when a transaction is broadcasted?
The transaction becomes valid, then goes into the mempool, and a miner will add the transaction to the block that is getting mined.

How does a miner pick which transactions that gets added to the next block?
A miner picks the transactions with the highest transaction fees.

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#1046

QNS 1. What is the difference between a SPV (simplified payment verification) and a full node?
A SPV does not have the full copy of the blockchain and refer to the nearest node nearby for verification.

QNS 2. What does it mean when a transaction is broadcasted?
A transaction is broadcasted when a block has been successfully added to the blockchain network with all nodes verified.

QNS 3. How does a miner pick which transactions that gets added to the next block?
A miner pick the transaction where the fees is the highest.

#1047
  1. Unlike Full Node, SPV does not store the copy of the full blockchain, and it simply just relies on other nodes UTXO data to verify the transaction.
  2. Broadcasted transaction means that it has been added to a list of the transactions in the mempool, ready to be verified and mined after.
  3. Verified transactions and highest fees are privileged.
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#1049
  1. What is the difference between a SPV (simplified payment verification)and a full node?
  2. What does it mean when a transaction is broadcasted?
  3. How does a miner pick which transactions that gets added to the next block?

A1. The difference between a SPV and a full node is that the full node contains info of the entire blockchain, whereas the SPV has only a part of the blockchain, for example on mobile devices it is not possible to run a full node as you wouldn’t have enough resources or bandwidth to participate on the network or to validate every transaction, but you would have enough to do a simple buy/sell transaction, hence this would be called an SPV. An SPV is still a node, but a small one when it needs to read the blockchain it will query a larger node (full node) to do so.

A2. A transaction is broadcasted via your wallet through the use of your private key which signs the transaction.

A3. A miner decides which transactions gets added to the next block by using the PoW consensus algorithm and solving a cryptographic puzzle, they chose the transactions with the highest fees.

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#1050

  1. What is the difference between a SPV (simplified payment verification) and a full node? SPV relies on a full node in order to view the network. A full node reads the network on its own.

  2. What does it mean when a transaction is broadcasted? It’s broadcast to nearby nodes, which verify it is a valid transaction and then gets placed in the mempool for a miner to put in a new block.

  3. How does a miner pick which transactions that gets added to the next block? Based on the highest tx fees in the mempool

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#1051
  1. What is the difference between a SPV (simplified payment verification) and a full node?
    Full nodes store the hole blockchain while SPVs mostly store transactions relevant to its addresses and an app that calls full nodes which contains entire blockchain database when needed.
  2. What does it mean when a transaction is broadcasted?
    The transaction is sent to the network, validated and added to the mempool, ready for a miner to add to the chain.
  3. How does a miner pick which transactions that gets added to the next block?
    The miner reads transactions from the mempool, choses the highest fees transactions and adds them to the block which later could be added to the chain depeding on the nonce chosen and target reached.
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#1052

Hey there Felipe and thank you so much for taking the time and going through my homework it means a lot!
I actually meant to write block instead of tx, my mistake.
thanks again!
Roni

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#1053
  1. What is the difference between a SPV (simplified payment verification) and a full node?
    A full node works with a complete copy of the blockchain and all rules of bitcoin are followed within that node whereas SPV relies on full nodes to verify that a transaction is included in the bitcoin blockchain. For example, an SPV wallet also stores a private key and constructs, signs and broadcasts transactions by connecting to full nodes on the network to scan the blockchain for balance updates and UTXOs.
  2. What does it mean when a transaction is broadcasted?
    When a signed transaction is broadcasted it is propagated through the network and added to the mempool by each node that receives it to be picked up to be mined (validated) for inclusion in the blockchain.
  3. How does a miner pick which transactions get added to the next block?
    Miners pick up unconfirmed transactions from the mempool and typically choose transactions that have the highest fees as incentive for mining.
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#1054

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    A full node has a full local version of the blockchain.
    An SPV doesn’t have a local version of the blockchain. It only has the block headers of the longest chain instead of full blocks. It gets the headers from nodes. It verifies that a transaction is in the blockchain by using the Merkle branch to link the transaction back to the its block.

  2. What does it mean when a transaction is broadcasted?
    The transaction is sent from a wallet to the nodes who add it to their mempool.

  3. How does a miner pick which transactions that gets added to the next block?
    Miners will generally pick the transactions with the highest fees.

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#1055

Hi there!! Actually, a miner is also a node, and each node has a mempool. So, when you broadcast a transaction, you are sending your intention to spend funds, and each node that receives it will also broadcast it to other nodes, until it arrives to the miner node.

Felipe.

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#1056

Hi there!! Actually, miner will choose the transaction with higher fees related to size, and size is related to the inputs and outputs that built up the transaction.

Hope it helps!

Felipe.

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#1057

Hi Eric!! You are right. What I meant is that the every user in the network is free to specify the fee he/she wants to pay the miner. So, a person can use a lot of inputs and outputs, specifying a very low fee. A miner can see that this transaction is big, but the sender don’t want to pay a lot to process it, so the miner may not want to process it.

Hope that answers your question!

Felipe.

#1058

1- What is the difference between a SPV (simplified payment verification) and a full node?
A full node is node that store a full copy of the Blockchain, while the SPV is a node that dosen`t store a copy, instead it trust the neighbors nodes to verify and validate transactions.

2- What does it mean when a transaction is broadcasted?
Mean that the transaction has been signed with the private key, verified for double spend and sent for nodes

3- How does a miner pick which transactions that gets added to the next block?
The miner is incentive to pick the transaction with higher transaction fee.

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#1059

Homework on Bitcoin Ecosystem - Questions

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    SPV has only part of the whole blockchain saved, whereas a full node has the full copy of the blockchain saved.

  2. What does it mean when a transaction is broadcasted?
    That the transaction has been send to the network and awaits verification to be added to the blockchain.

  3. How does a miner pick which transactions that gets added to the next block?
    The one with the highes fees. They are all money driven…

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#1060

1, An SPV doesn’t store a full copy of the blockchain ledger with full UTXO data, so must access a full node to interact and validate with the full blockchain.
2, A transaction is broadcast and propagated across all nodes.
3, A miner will prioritize transactions according to the reward, being the highest transaction fee.

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#1061

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

A full node contains a complete copy of the blockchain, whereas a SPV is a node that does not. As a result, an SPV is smaller and requires less storage space, making it possible to reside on mobile devices. An SPV relies on/trusts a full node and will query the full node when it requires information it does not have.

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

To broadcast a transaction means that the transaction is sent by a wallet to the network, where the transaction will be added to the mempool. The transaction will remain in the mempool until selected by a miner for inclusion in a block.

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

Miners will generally pick transactions having the highest transaction fees because it is most profitable for them.

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#1062

  1. A SPV is a client that, unlike a full node, stores just a fraction of the blockchain and relies on a trusted third party node for full querying.

  2. Nodes will propagate this and store it in their mempool until it gets included on the blockchain.

  3. Miners will naturally pick transactions that have highest fees.

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#1063

  1. a full node contains a copy of the entire block chain. A SPV stores and generates transactions relevant to its addresses and requires the full node to send

  2. shared across all nodes. a valid transaction is then placed in the mempool to wait for miners to mine into a block.

  3. those offering the highest fees are generally picked first

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#1064
  1. An SPV does not have a full copy of the blockchain. The SPV ( wallet) must query a node that contains a full copy of the blockchain to see what available UTXOS there are for a specific private key.
  2. The transaction has passed initial protocol and added as a UTXO to the mempol. This is broadcasted to the other nodes as available to be confirmed by a miner.
    3.Those that derive the highest transaction fee.
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#1065
  1. What is the difference between a SPV (simplified payment verification) and a full node?
    SPV are nodes that don’t have entire blockchain while full nodes have.
  2. What does it mean when a transaction is broadcasted?
    That means a tx is accepted and propagated across the network.
  3. How does a miner pick which transactions that gets added to the next block?
    Tx with higher fee.
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