Homework on Bitcoin Ecosystem - Questions

Blockchain and Bitcoin 101
#142

What is the difference between a SPV (simplified payment verification) and a full node?
A SPV only store transaction information relevant to specific addresses, it doesn’t store the entire blockchain and needs to connect to a full node to receive that information
What does it mean when a transaction is broadcasted?
A node propagate it to the network of full nodes and gets added to their mempool
How does a miner pick which transactions that gets added to the next block?
Miners pick the highest transaction fee based on satoshi per byte ratio

#143

succinctly++;
I like your homework :grin:

#144
  1. SPV has to query the get access to full blockchain, Full node has access to full blockchain.
  2. Transactions are shared with all nodes in the network
  3. Miner picks the transaction with highest sat/B ratio from mempool
#145
  • SPV wallets don’t store all UTXO data and must get data from full node.
  • Full node shares transaction with other full nodes
  • Miner perfers transactions with highest fee per KB
#146
  1. A full node has a copy of the whole blockchain while SPVs mostly store transactions relevant to its addresses and requires a full node to send transactions.
  2. It means a transaction has been propagated through the network, validated and put in a block.
  3. The miner picks the transaction with the highest fee.
#147

Question 1

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

  1. SPV
    1. Is a small node that trusts a full node
    2. Generates transactions
    3. Do not have a complete version of the blockchain
    4. Keeps your private key
    5. Queries many full nodes
  2. Full Node
    1. Keeps a full copy of the blockchain
    2. Does not create transactions
    3. Communicates with user wallets when necessary
    4. Has a mempool which miners take data from
    5. Communicates with other nodes

Question 2

What does it mean when a transaction is broadcasted?

A broadcasted transaction means that a wallet or SPV has communicated a transaction to a node. A transaction can also be communicated node to node.

Question 3

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

When adding transactions to the next block the miner will query a nodes mempool. Typically a miner will pick the transactions with the largest transaction fees although this is not absolutely necessary but financially speaking it would be better to get best price for the work.

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#148
  1. What is the difference between a SPV (simplified payment verification) and a full node?
    The SPV does not hold the full blockchain, but is trusting other nodes to be able to retrieve the blockchain
  2. What does it mean when a transaction is broadcasted?
    transaction is set to valid by the nodes and put to mempool to enable them to be used by the miners
  3. How does a miner pick which transactions that gets added to the next block?
    normally the transactions with the highest fees would be used by the miners
#149

1-A full node contains complete blockchain while SPV only needs a copy of the block headers of the longest chain. This is available by querying network nodes until the longest chain has been obtained.Wallets using SPV client get the Merkle branch linking transations to an active block on the chain.
2-when a transaction is broadcast it is propogated to all nodes
3-Miners usually choose the transaction with higher fees

#150
  1. SPV’s allow a Node to verify if a transaction has been included in a block without having to download the entire block chain.
  2. When a wallet checks the block chain for UTXO’s that you can spend, it the completes the transaction with inputs and outputs, then digitally signs your name and broadcasts your transaction to the Network.
  3. Because Miners are financially incentivised, they choose the transactions with the highest fee’s.
#151

  1. the difference between a full node and an SPV, it that the full node will have the entire copy of the blockchain. The SPV wallet will have to get the data from a full node.

  2. When a Tx has been broadcasted it means that full nodes have shared with other full nodes in the network.

3.The miner will pick the tx with the highest fee

#152

1 SPV only stores info pertinent to itself and needs a node to do transactions. A node stores the whole blockchain of info.
2 A broadcasted transaction means that the transaction is sent to all the other nodes via the internet.
3 The miner goes for the best paying transaction to be added to the block.

#153

  1. An SPV only holds a partial copy of the blockchain network (what’s relevant to its transactions), but can be used to broadcast personal transactions to other nodes. It is less power and memory invasive, and subsequently is good for mobile devices. A Node on the other hand locally holds a full copy of the blockchain, they add new tx to the mempool (from other nodes and SPVs), propagate this list, and then add new blocks when they’re mined. Nodes are more private and safs than SPVs but use more power and memory to keep running.

  2. A transaction is broadcast when it is sent out to other nodes and added to the mempool, to be propagated across the network and be picked up by miners.

  3. In most cases a miner will choose those tx with the highest fees to add to the next block it is trying to create.

#154
  1. A method for verifying if particular transactions are included in block without downloading the entire
    block. A full node has the a copy of the entire block.
  2. It means that you made a transaction. your wallet will broadcast this transaction to the node in the
    network.
  3. A miner miner picks the transaction with the highest fees from the mempool on a node.
#155

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    A full node stores the whole blockchain and needs a lot of memory resources. An SPV is a “small node” that only holds a partial information and sends queries to a full nodes in order to get the needed information. This is useful for less capable devices such as smartphones.

  2. What does it mean when a transaction is broadcasted?
    It means the node is broadcasting to the other node/mempool that some UTXO being spent.

  3. How does a miner pick which transactions that gets added to the next block?
    Transactions are picked by the miner from the mempool. Miner pick in priority the transactions that offer the most insensitive ( higher transaction fee).

#156

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

An SPV is a wallet which does not hold a full version of the Blockchain. The SPV wallet has to connect to a Node for information. Also an SPV cannot verify transactions only full nodes can do this function.

What does it mean when a transaction is broadcasted?

Broadcasting a transaction means that it is being propagated through the network for validation to then be put into the mempool for miners to put them into their blocks.

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

Miners will pick transactions with the highest fees attached because the fees are part of their revenue earnings on top of the block reward.

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#157

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

    • An SPV does not contain the complete blockchain and must query and send a transaction to a node.

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

    • It means the transaction has been submitted to the network and added to the mempool for processing…

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

    • It picks transactions with the largest fee per byte to hash.
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#158

  1. SPV is a smaller node that does not have a copy of the blockchain and needs to connect to a full node to get information.

  2. It is ran through the network of nodes, communicates to them.

  3. It picks up the unconfirmed transactions from the mempool, one with the highest rate of transaction fee.

#159
  1. What is the difference between a SPV (simplified payment verification) and a full node?
  • SPV does not store a full copy of the blockchain as the full node. The SPV (can be called cold wallets) validates its own TX and will connect to a node when it needs to propagate the TX.
  1. What does it mean when a transaction is broadcasted?
  • The TX is propagated in the network by the nodes, they send the TX to the mempool awaiting a miner to pick them up to add them in the next block.
  1. How does a miner pick which transactions that gets added to the next block?
  • It will pick the TX based on the highest fees first.
#160

1.With SPV such as an exchange wallet, your “wallet” is held by the exchange, (probably as a mass wallet along with many other customers)in their name (in effect) . the transaction may not be a blockchain transaction but their accounting only. An SPV would not have a full node of the blockchain but just a small portion.

  1. A transaction is broadcasted as a request to the mempool to wait for a miner to choose to add it to a block.

  2. transactions are chosen according to the fee offered. Higher fees are taken first.

#161

Hello folks

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    Full node is a computer on the network and have the full copy of the blockchain. Full nodes verify TX is valid so the miner can add them to blockchain. SPV is a small node(this can be your smartphone) and this does not have the whole blockchain on them but they can query it from full node.
  2. What does it mean when a transaction is broadcasted?
    TX broadcast is letting all nodes on the network know that wallet has generated TX, so all nodes could verify the transaction.
  3. How does a miner pick which transactions that gets added to the next block?
    By highest fee so miner could get maximum profit.