Homework on Bitcoin Ecosystem - Questions

Blockchain and Bitcoin 101
#1266
  • What is the difference between a SPV (simplified payment verification) and a full node?

An SPV does not have a copy of the blockchain locally stored, so it needs to communicate with full nodes in order to obtain information on unspent transactions.

  • What does it mean when a transaction is broadcasted?

It means that a wallet sends the transaction information to the nearest nodes, so that the transaction can be included in one of the next blocks. The nodes in proximity of the given wallet then re-broadcast the transaction and so on.

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

Miners pick transactions with the highest fees for inclusion into the next block.

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#1267
  1. SPVs do not store the full blockchain and cannot send TXs. 2. Broadcasting a TX is when a full node shares TX information with other full nodes. 3. A miner will pick the TXs with the highest fees.
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#1268

SPV’s does not store data and need to access the info from a full node in order to verify what transactions he is able to do.
A transaction is broadcasted means it is valid , send to the network and put into the Mempool until a miner picks it up. If the Mempool is too full the transactions with the lowest fees will be returned.
The miner will choose the transaction that has the highest fee

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#1269
  1. SPV does not have a copy of the entire blockchain and needs to connect to the node to get the information. The node has the entire copy of the blockchain, verify it is correct and verify transactions.
  2. A transaction being broadcasted means it is propagated to all of the nodes or spread to all of the nodes like gossip.
  3. A miner picks transactions from a mempool and chooses the ones with the higher transaction fees.
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#1270
  1. An SPV refers to a Wallet transaction where it queries the network for your UTXOs and combines them to fit the required send amount. It does not have access to the full blockchain network like a node does.
  2. A transaction that your wallet considers valid is sent to a node and then propagated through the network, becoming a part of the mempool.
  3. A miner checks a node for the mempool and picks out the transactions that have the best sat/b or Satoshis per byte ratio.
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#1271

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    The difference between an SPV and a Full Node is that, the SPV does not host a copy of the blockchain. It actually refer to another source/node for the information on the blockchain. The Full Node hosts a copy on the blockchain.

  2. What does it mean when a transaction is broadcasted?
    When a transaction is broadcasted it is transited by the wallet to the network of nodes which will allocate the transaction to the Mempool so the Miners can now have the option to add to a block.

  3. How does a miner pick which transactions that gets added to the next block?
    Miners pick new transactions from the Mempool when searching from transaction to add to a block. Usually miners will choose transactions with the highest fees to maximize profitability when choosing transactions.

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#1272

It does also contain some parts of the blockchain, mostly related to the keys it stores.

Actually each full node contains a pool, which is a data structure in the memory. Nodes gossip to each other what transactions they have in their mempool and that is how txs propagate through the network. Eventually a transaction will get to the miners mempool which will then be picked up and put into the block. :slight_smile:

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#1273

SPVs do contain some small parts of the blockchain related to their keys :slight_smile:

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#1274

Homework on Bitcoin Ecosystem - Questions

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    A. A SPV does not contain a complete copy of the blockchain whereas a full node does.
  2. What does it mean when a transaction is broadcasted?
    A. It is broadcasted when a TX is propagated to the network.
  3. How does a miner pick which transactions that gets added to the next block?
    A. A miner will select the TX with the highest fee first.
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#1275

  1. An SPV is a wallet that does not contain the entire blockchain. The SPV must query a full node or nodes for blockchain data. A full node is a wallet that keeps a copy of the total blockchain.

  2. When a wallet completes building a transaction it signs the transaction with its private key and places it in the mempool where it can picked up by miners and mined into the blockchain.

  3. Miners typically choose transactions to include into a block based on the highest fee but I suppose they could make this decision on any criteria they want.

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#1276

  1. SPV allows you to verify a transaction on blockchain without having the entire blockchain downloaded

  2. transaction data is spread among the nodes until a miner picks up to end confirmation process

  3. miners choose highest fees first and longest chain gets added once confirmed by 6

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#1277
  1. an SPV does not have a copy of all the block transactions and must check in with a full node that does contain all the information in order to authorize and send a transaction
  2. all the nodes are given your transaction in the mempool in order to see if it makes sense, and if it checks out, it will continue to be passed on until it is picked up by a miner.
  3. miners favor transactions with the highest transaction fee
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#1278

  1. SPVs only hold transactional info relevant to themselves, and must rely on full nodes to connect to the whole blockchain.

  2. A broadcast is when a full nodes receives and accepts a block, and then sends it out to other nodes.

  3. A miner will want to pick a transaction with a nice transaction fee, or more specifically a good Sat/B rate

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#1279 
SPV wallets ask full node for proof of  UTXO data but dont store it (example, mobile phone SPV node).

Full node shares txs to otherfull nodes

Miner select to max profits by choosing higest sat/byte
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#1280
  1. Full nodes have whole blockchain while SPVs gets information from full node.
  2. It’s been sent to the network and into the mempool.
    3.The ones with the highest transaction fees
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#1281

The difference between SPV and a full node is that a full node has the full ledger of transactions. SPV only accesses what is necessary for a transaction.

When a transaction is broadcast it is sent out to all full nodes and miners and propagated throughout the network.

A miner chooses the transactions with the highest fee to add to the next block.

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#1282
  1. a SPV does not contain the complete blockchain so must query the full node (which has the complete blockchain, mempool, etc); the SPV is used for validating own transactions/tx history
  2. it means it is ‘posted’ into the mempool of a node, which is then sent from one node to the other, creating a list of unprocessed transactions. onced processed and put into a block on the blockchain it is then again broadcasted across the network as part of the valid blockchain
  3. usually by taking the transactions from the mempool that have the highest transaction fees as he is incentivized to get more for his work
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#1283
  1. What is the difference between a SPV (simplified payment verification) and a full node?

A full node has his own copy of the blockchain. An SPV uses another fullnode to have access to all the informations in the blockchain.

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

The transaction is distributed in the Peer to Peer network (mempool)

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

They get the transactions with the highest fees to build the new block.

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#1284

  1. What is the difference between a SPV (simplified payment verification) and a full node? Full node contains the entire blockchain whereas an SPV stores transactions relevant to its addresses and must go to a node to send transactions.

  2. What does it mean when a transaction is broadcasted? Propagates a transaction to the network.

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

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#1285

  1. A full node stores the entire blockchain but an SPV only stores relevant information and needs to connect to a full node to send transactions.

  2. It is sent out to propagate through the entire network.

  3. Miners pick transactions, higher transaction fees are processed faster.

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