Homework on Bitcoin Ecosystem - Questions

Blockchain and Bitcoin 101
#1086

Hey Mauro,

Ohh thank you, that’s a better explanation, Thanks for the clarification! :+1:t4:

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#1087

  1. SPV only carries a smaller copy of the blockchain needed for relevant transactions whilst a full node carries a complete one. The SPV will thus need data from a full node to make transactions.

  2. The transaction propagates through the network

  3. The miner goes in general by the highest transaction fees to maximize its profits.

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#1088

  1. SPV can verify if a transaction has been included into a block without having to download the entire blockchain.

  2. A transaction is created, complete with input(s) and output(s), and broadcasted to the network remaining in mempool until confirmed by a miner.

  3. Transactions with the highest fees are usually prioritized highest

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#1089

The miner typically picks the transactions that are paying the highest tx fees.

#1090
  1. A SPV only carries a partial version of the block chain whereas a node has the complete block chain on it. SPV also contacts other nodes for verification.
  2. When a transaction is broadcasted it means that the wallet sends it to each node and it is then put in their mempools.
  3. A miner typically chooses transactions with the highest transaction fees.
#1091

  1. An SPV is a node that doesn’t have the entire blockchain. It’s a small node that trusts a full node when it wants to read the blockchain.

  2. When a transaction is initiated with a wallet, the wallet sends it out to the nodes on the network. It gets propagated further through the network until a miner picks it up.

  3. Miners choose/prioritize the transactions with the highest fees. When they succeed in solving the puzzle and finding a hash that comes in below the target threshold, they get all the transaction fees along with the block reward.

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#1092
  1. SPV node queries a full node for TXs which affect them and basically trusts the version of the blockchain which the full node has
  2. Transaction is broadcasted when it is sent to the mempool to be picked by miner
  3. There is no predefined rule, but as miners normally want to maximise profits, they pick up the transactions with highest fees.
#1093

  1. SPV is connected to the full node and doesn’t store the copy of blockchain.

  2. TX will be transferred around the network and saved by another nodes also.

  3. Miners always take unconfirmed TX from mempool with higher fees (sat/B).

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#1094

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

From my notes, an SPV is a wallet checking in the nodes to make sure it has the right information since an SPV doesn’t have an entire history of the blockchain saved on to it, an SPV will check on up to several nodes give or take to make sure it has the right information. A node has the entire blockchain saved on to it and propagates/broadcast transactions along with managing the mempool that miners pull from. a node doesnt create transactions.

What does it mean when a transaction is broadcasted?

I assume when a transaction is broadcasted, it becomes visible for the network to see and to hand that transaction to miners that update the blockchain.

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

From what I’ve gathered a miner picks up a transaction from the mempool that the btc node manages/houses. the miner priortizes the transaction in the mempool that have the highest fees attached to them.

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#1095
  1. SPV does not contain the entire blockchain so they need to connect to a node to perform
    transactions.
  2. When a confirmed transaction is spread across the network.
  3. They choose the transactions with the highest fees.
#1096

1 SPV node has private key but not the entire blockchain with all transaction output and needs to query as many nodes as possible (or reads blockchain from other full nodes) until it’s confident it has the right, same info.
Full node has private key and entire copy of blockchain.

2 A transaction being broadcasted means it has been sent out to entire network: from one computer aka node to other nodes throughout the world.

3 Miners prioritize and handle transactions with highest transaction fees first. Since they want to maximize their profit and are concerned by how much satoshis they make for each block and how much space & byte the transaction will take from their Block, they will take TXs from mempool that gives more satoshis for the space it takes in the block.

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#1097

  • What is the difference between a SPV (simplified payment verification) and a full node?
    SPV’s do not maintain a full copy of the blockchain. They will query the nodes next to them instead.

  • What does it mean when a transaction is broadcasted?
    Broadcasting the transaction means sending it to the mempool and then spreading it through the network so that it can be included into one of the next blocks being added to the blockchain by the miners.

  • How does a miner pick which transactions that gets added to the next block?
    Miners pick the transactions with the highest fees in satoshis/byte so that they can make more money for their work (spending electricity).

#1098

Hi Duff!! Correct! How about the other questions?

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#1099

Hi there!! The wallet actually broadcast it to some nodes, and then those nodes broadcast it again. This is also called propagation of the tx.

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#1100

Almost there! We say that the wallet broadcast the transaction to other nodes, and then these nodes add the valid transaction to their own mempool, as there is no a central mempool, they are all independant and specific to each node.

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#1101

Better if we say that it connects to another node to gather data about a certain wallet

The transaction is confirmed when a miner includes it in a block. When we broadcast a transaction, we are just sending the signed data to other nodes, and we need to wait around 10 min for confirmation.

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#1102

Hi there! It’s better if we say that the transaction is spread or propagated through the network. Nodes that receive this transaction will confirm its validity and add it to their mempool (which is different for every node).

Hope this helps!

Felipe.

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#1103

Right, thanks for the clarification!

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#1104

Homework on Bitcoin Ecosystem - Questions

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    Svp does not store the full blockchain locally, it refers to a node for the information (where the full blockchain is stored).
  2. What does it mean when a transaction is broadcasted?
    It means a wallet created a transaction and it is sent out to the nodes to be validated and eventually confirmed by miners.
  3. How does a miner pick which transactions that gets added to the next block?
    They base it on the sats/B ratio. They want to pack as many high fee transactions into the block as possible.
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#1105

Homework on Bitcoin Ecosystem - Questions

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    The SPV is a technique to verify that transaction is included in the bitcoin transaction blockchain,
    instead of downloading entire block they will download only block header which is much smaller
    full blocks. The full nodes have to store complete Blockchain ledger locally , means they need to
    download every block and transaction that ever happened on the Blockchain . ( edureka!
    Community )
  2. What does it mean when a transaction is broadcasted?
    It means that the transaction is sent from the wallet to other nodes, and then propagated
    through all the network.
  3. How does a miner pick which transactions that gets added to the next block?
    The transactions with higher fees.