Homework on Bitcoin Ecosystem - Questions

Blockchain and Bitcoin 101
#1447

  1. SVP is an app that doesnt have the full version of the ledger and has to connect to the full node in order to create transaction, it will need additional info from full node like UTXO for specific public address

  2. Transaction is being broadcasted means in it being constructed by the wallet, then put to the mempool, from where it will be picked up by the miner, included in the block, then that block will be linked to the previous block, and if successful (no stale), will become part of the ledger, stored on all nodes, immutable and distributed

  3. Miner picks transactions that have higher fee (sat/byte)

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#1448

  1. SVP stores only the parts of the information for transactions initiated onto the blockchain, Nodes store complete records of all transactions initiated on each block.

  2. You have used your private key for a transaction to be processed, (eg. from your Wallet) from which is broadcasted to the network to be validated.

  3. Primarily the highest reward that can be obtained.

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#1449

1). A SPV does not contain the entire chain so it is reliant on full nodes.
2). When it is broadcast it means it is put out onto the network to be picked up in different nodes’ mempools in order for them to include the transaction in a block they hash.
3). The miners are incentivized to pick the transactions with the highest fees associated.

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#1450

1.)SPV lack a copy of the blockchain and reaches out to a node to get that data.

  1. It is where the nodes decentralize the the blockchain to all of the other servers.

  2. They look for the lowest electrical cost therefore the highest sat/b ratio.

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#1451

The miner will usually select the transactions from the mempool that offer the highest transaction fees per kilobyte,

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#1452

The difference between a SPV and a full node is that an SPV does not have the full blockchain . It will have to query a full node. It may be on a cell phone rather than a desk top computer and so space and memory are limited.

A transaction is broadcast when it it is sent to the network and propagated to each node.

The miner pick transaction based on the amount of fees he will receive. So priority is given to the transaction that required the most memory or space due to its difficulty caused by multiple inputs or outputs.

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#1453

1.SPV nodes, smaller app infact, download the block headers only and exclude the transactions of each block- Full nodes keep a complete copy of all the bitcoin blockchain with all the transactions.For higher amount bitcoin, plans to keep long time, important use a dedicated full node with TOR network connection to benefit security and privacy of funds.
2.transaction-Miners are nodes which also create blocks. So after above broadcasting your transaction must have made to a node that is also mining and that selects your transaction into a candidate block.
3. Mines secure network hash rate how strong computers faster they mine ,plays by rules,get paidcollextively ensure Txs can be secured, upend to block, propagate to nodes,mining ensure no censorship non double spendcannot alter Txs - Incentives PoW h0nest - consensus, spend alot electricity, take mempool construct block

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#1454
  1. What is the difference between a SPV and a full node?

SPV does not hold a copy of the full blockchain, it must connect to one or more nodes to query the blockchain from there. Used on devices that do not have the storage capacity to hold the full blockchain, such as a mobile phone.

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

The wallet that has created the transaction sends it out to the network and it is placed in the mempool of the nodes that it connects to. It will continue to be added to the mempool of other nodes as it propagates through the network.

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

They will interrogate the mempool on their node or another node. They choose the transactions that have the highest sat/B ratio first as these are the most efficient to get into the block.

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#1455

You mean when a transaction has been sent through the network? :slight_smile:

#1456

A full node holds the entire blockchain, whereas an SPV does not, but obtains the parts it needs from a full node.

A transaction being broadcast means a UTXO being propagated through the network of nodes. The UTXO remains in the mempool until it is selected by a miner to be added to a block.

Usually the miner picks the transactions from the mempool which are offering the highest fees.

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#1457

  1. An SPV checks with full nodes to get an update on the current blockchain, where as a full node holds a complete version of the entire blockchain.

  2. When a transaction is broadcast, it is sent out to all the nodes for them to update their version of the blockchain.

  3. A miner will select transactions with the highest fees

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#1458
  1. A SPV is only a portion of the complete blockchain data that is relevant to its address. It relies on a full node to send transactions. A full node contains all the data of the blockchain.
  2. When a transaction is broadcasted it is being sent to the network of nodes.
  3. A miner picks the highest transaction fees when attempting to add a new block.
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#1459

1.What is the difference between a SPV (simplified payment verification) and a full node?
An SPV does not have the full copy of the blockchain, unlike a full node. It is a smaller node, eg using your phone. They need to query full nodes for data.

2.What does it mean when a transaction is broadcasted?
It is sent/propagated to all the nodes in the network to await verification from nodes and later confirmation from miners.

3. How does a miner pick which transactions that gets added to the next block?
Typically miners will pick the transactions with the highest fees so they can derive the most value. Fees are in satoshi/byte.

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#1460

Its a full transaction that also contains UTXOs :slight_smile: UTXOs are part of a transaction not a transaction itself.

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#1461

When the transaction is broadcasted, is it already part of a block? :slight_smile:

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#1462
  1. An SPV only holds part of the blockchain. Its a small node that trusts the full node to read the blockchain. e.g. your mobile wallet
    2.It means that your wallet sends an input to the transaction, that generates a UTXO, that gets propagated through the network.
  2. They get picked by the highest rewards.
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#1463

  1. A full node contains the full blockchain. An SPV is a divide such as a smartphone that does NOT contain the full blockchain, but relies on full nodes to make transactions.

  2. it means that the information has been spread throughout the network.

  3. Miners make more money if they pick the transactions with the highest fees.

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#1464
  1. An SPV would be used on a device like a mobile phone or anything that isn’t a desktop it is a version of the blockchain that you essentially borrow from a node nearby so that you can do crypto transactions, The SPV is used so you don’t have to download the entire 10+ year history of the blockchain onto your mobile device just to make one transaction, it only takes the top few weeks or months of transactions from a full node to make its transaction
  2. When a transactions is broadcasted it is propagated around all nodes, they hear of a transaction being made and then after they would add it to the mempool
  3. A miner would pick the transaction with the highest transaction fees to add to the next block so they get more reward for mining
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#1465

  1. a SPV only has part of the blockchain and has to trust and go to a full node to be able to read the blockchain.

  2. once the wallet software signs a transaction, then the software send that transaction to the mempool which spreads to all nodes which await to be entered into the next block.

  3. the miner wants to profit the most, so they select the transactions that have. the best sats/bytes ratio or cost/ size so that they make the most money for the least amount of space so they can fit more transactions with higher fees into the block and win that reward.

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#1466

  1. An SPV does not hold the full blockchain the way a node does, it is able to reference a full node to see the blockchain.

  2. A transaction is broadcast when it is sent from your wallet to the mempool to await confirmation.

  3. Generally by choosing the transactions with the higher transaction fees from the mempool.

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