Homework on Bitcoin Ecosystem - Questions

Blockchain and Bitcoin 101
#1186
  • What is the difference between a SPV (simplified payment verification) and a full node?

I node it is a computer on the network, but it does not produce new blocks. All nodes have the same copy of the blockchain. An SPV is a node that does not have access to the entire block chain, but inquires with a node to access the blockchain.

  • What does it mean when a transaction is broadcasted?

Broadcasting a transaction is the last step a wallet does after it constructs, and signs a transaction. A transaction that has been broadcasted has been sent to its recipient’s public key.

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

Keeping in mind that a miner is incentivized to make money, he or she will choose the transaction with the highest fees to put on the block.

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#1187
  1. SVP does not have the full information of the blockchain. It is connected to a full node to query blockchain information.
  2. transaction is propagated to nodes and their mempools
  3. the miners prefer the transactions which provide the highest fees.
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#1188

Exactly. Since it does not have the whole history of the blockchain it would have to be checked by a full node. But it will generate the correct one since it will be fetching the most important data it needs.

Yes, miners will first add the highest satoshi per byte transactions. But I am still not sure what do you mean. Block rewards go alongside with the transaction fees. There is no point in choosing between the block reward and the transaction fees. Or am I missing your question again?

#1189

Before it gets added to the block it arrives at each nodes mempool. Then it becomes added into the new block by one of the miners. :slight_smile:

#1190

This is somewhat true. A full node can be a miner but it does not have to be. This means that a full node may or may not produce new blocks, this all depends if they are mining or not. :slight_smile:

#1191

Yes, but not immediately. It first needs to be checked by other full nodes, to make sure the transaction is a valid one. After that each nodes recieves it in to their mempool. And lastly, one of the miners will eventually include it into a block. After a couple of more confirmations the reciever can be sure that the funds he recieved can’t be reversed. :slight_smile:

#1192
  1. SPV does not have a full copy of the blockchain and will need to refer to a full node to confirm the most up to date blockchain
  2. When a tx is propagated or spreads through the nodes on the network
  3. Miners usually pick the tx’s with the highest fee per kb, smaller tx’s so they can fit more into a single block meaning they can earn more fees.
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#1193

Thank you for clarifying it for me.

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#1194

Exactly. This is why a wallet will set a fee in satoshi per byte. By doing this, miners don’t care how large the transaction is. (large as in more inputs and outputs) They want to get the most money per byte of information that gets stored in the block. However, as a user, if you do send a larger transaction, you will pay more in total fees. :slight_smile:

#1195

No problem. I am here to hell. Keep up the great work. :slight_smile:

#1196

Hi Mauro

I apologize on the confusement of my answer. I understood block rewards go alongside with transaction fees. And what I meant was since both go alongside each other. The Miner will look at the satoshi/byte first instead of the block reward to choose which block to mine.

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#1197
  1. SPV is the smaller version kept for instance on your mobile - show the entire BC is too big for a small device.
    A full node you get while working with enough storage to show the whole BC, on laptop or computer.
  2. TX is sent out from your wallet using private key, out to the open BC, your private key is encrypted to your public-key signature, keeping all safe.
  3. miners want to make profit on fees, therefore the TX with highest fees to be earned get picked up first from the mempool to add to the next block generated.
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#1198

Thanks, I understand

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#1199

No worries, so I misinterpreted your answer :v:

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#1200

1 the spv would be a device that has limited memory i.e. cell phone and has to rely on a computer for the full block chain info
2 a transaction is broadcast when a wallet puts out the transaction info into the network then the nodes around it can either accept it if it makes sense or reject it if it does not till a miner picks it up and adds it to blockchain
3 the higher fees that are associated with the transaction are the primary reason a miner will pick a transaction to ad to blockchain because this is how they get paid

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#1201

Correct. Miners will looķ at the highest paying transactions and include them in a block. Miners are the ones that construct the actual block contents. :slight_smile:

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#1202

I am glad I could help you understand better. :smiley:

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#1203

The difference between an SPV and a full node is that an SPV is a smaller device that cannot hold the full blockchain while node can. An SPV usually relies on a full node when making transactions.

When a transaction is broadcast, it means the wallet has communicated to a node.

A miner picks transactions that have the highest fee.

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#1204

  1. While a full node contains the entire blockchain, an SPV does not. Instead, SPVs query full nodes in order to verify transactions.

  2. When a transaction is broadcasted it means it has been shared across the network.

  3. Miners pick the transactions with the highest fees to place into the next block.

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#1205

Thanks, I understand

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