Homework on Bitcoin Ecosystem - Questions

Blockchain and Bitcoin 101
#1587
  1. An SPV does not store all data. But they can connect to a full node to receive all information. A full node has the entire copy of the blockchain.
  2. This means that the transaction is propagated to nodes and they spread to all other nodes on the network.
  3. A miner can pick whichever transaction he wants from the mempool. Usually he picks the ones with the higher transaction fees.
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#1588

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

Simplified payment verification (SPV) does not have a copy of the blockchain and needs to connect to the full node (a computer) to get the information. For example can a cell phone be used as a SPV to store transactions.

What does it mean when a transaction is broadcasted?

The node accepts a new transaction and propagates it through the network. ItĀ“s now been broadcasted and is sent to the mempool via a miner await being mined into a block.

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

A miner picks transactions from a mempool and usually chooses the ones with the higher transaction fees in order to maximize their gains.

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#1589

Response:

  1. SPVā€™s have to communicate with the nodes in order to get the info it needs since it does not store the whole blockchain.
  2. Broadcasting a tx means that it is sent to the network and is waiting to get picked up by a miner.
  3. Minerā€™s will tend to go with the txs that are willing to pay a higher fee (paid in sats/b)
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#1590

  1. SPV are nodes who do not have a full copy of the blockchain. A SPV trusts a full node

  2. Broadcasting a transaction means it is spread out to all the nodes in the network

  3. A miner picks a transaction with the highest fee from the mempool and then guesses the nonce by hashing it, when the nonce is lower than the target this transaction gets put onto the block

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#1591

  1. A SPV is not a full node, it means there is only a little of the blockchain on it. Because of the the SPV must be connected to a full node.

  2. Before a transaction is broadcasted, the UTXO is done. That means, we know the transaction makes sense. The transaction goes into the network, it is broadcasted, where the full nodes is the network give the information from one node till the next node. A miner at least has to confirm the transaction.

  3. The miner is checking the mempool. He wants to earn and is choosing the transaction where the expected fee is higher.

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#1592
  1. SPV only has the previous block hash, the nonce, and the merkle root. A full node can create the full block chain.
  2. It originates from a wallet or SPV and talks or gossips to the other nodes.
  3. Typically it will pick the transactions that give the best fees.
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#1593

  1. A full node can reference and ā€˜seeā€™ the whole blockchain and can broadcast to the whole blockchain. A SPV only stores data that pertains to its own actions and has to access another full node to reference the blockchain.

  2. When a transaction is broadcasted this means that it is being relayed and sent to other full nodes in the blockchain network. And when others pick up on this it is added to the mempool.

  3. A miner picks which transactions get added to the next block by seeing the highest fees in the mempool and adding those transactions to its next added block.

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#1594
  1. What is the difference between a SPV (simplified payment verification) and a full node?
  • An SPV is a small device that can not house the blockchain while a full node is a computer with the blockchain and SPV refer to the nodes for updated made to the blockchain.
  1. What does it mean when a transaction is broadcasted?
  • This means one node shares the transaction with other nodes.
  1. How does a miner pick which transactions that gets added to the next block?
  • Miners pick transactions from the mempool with high transaction fees, combine them in a block, hash them with the Nonce and link the block to the previous block.
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#1595

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    SPV canā€™t connect the whole blockchain and usually queries a full node

  2. What does it mean when a transaction is broadcasted?
    Itā€™s propagated through the network through nodes, and they are added to the mempool as unconfirmed transactions.

  3. How does a miner pick which transactions that gets added to the next block?
    Usually they pick the high transaction fees (although it doesnā€™t mean that all miners pick the same transactions).

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#1596

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    Node has full copy of Blockchain with all verified transactions, and a SPV donā€™t, just the most relevant transactions, and SPV requires a full node to send transactions.

  2. What does it mean when a transaction is broadcasted?
    A propagated transaction through all the nodes

  3. How does a miner pick which transactions that gets added to the next block?
    He picks the transactions with higher fee.

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#1597

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    An SPV is truncated or ā€œprunedā€ version of the blockchain, whereas a full node contains all transactions ever confirmed on the blockchain.

  2. What does it mean when a transaction is broadcasted?
    A wallet has sent your transaction to the Bitcoin network, where it sits in the Mempool, awaiting confirmation from miners.

  3. How does a miner pick which transactions that gets added to the next block?
    Usually miners choose valid transactions with the highest fees first to be included in the next block.

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#1598

1- The full node has a copy of the full block chain, Whereas the SPV has to connect to a node that has the full block chain copy.
2- Broadcasting a transaction is sending it to all nodes
3- The miner chooses the highest value fee transactions from the mempool to mine

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#1599

What is the difference between a SPV (simplified payment verification) and a full node?
Answer: an SPV does not have a full copy of the blockchain (i.e. a Ledger / hard wallet) and must connect to a full node to get that information. An SPV mostly store transactions relevant to itā€™s own addresses. A full node has a copy of the blockchain.

What does it mean when a transaction is broadcasted?
Answer: A UTXO has been sent to the mempool and is awaiting being mined into a block.

How does a miner pick which transactions that gets added to the next block?
Answer: They usually select the block with the highest fees because the of the incentive to earn more. This is not always the case, but usually is.

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#1600

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

Full nodes keep a complete copy of all the bitcoin blockchain with all the transactions and offer the strongest security model which SPV doesnā€™t. SPVs download only blockheaders, request transactions matching particular patterns from the remote node (payments to your addresses), which provides copies of those transactions.

Additionally Bitcoin Wiki

What does it mean when a transaction is broadcasted?

Transaction is validated and ready to be taken by miner to block.

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

Miner is incentivised to pick the txs with the highest transaction fee.

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#1601

Homework on Bitcoin Ecosystem - Questions

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    ā€¢ An SPV does not hold a full node with all history and transactions of the blockchain. An SPV has to check with the blockchain with every transaction. A full node has the entire history of the blockchain and only has to update from time to time to keep up to date.

  2. What does it mean when a transaction is broadcasted?
    ā€¢ A transaction is sent as a UTXO to the mempool where is awaits to be picked up by a node/miner be solved and attached to the next block in the chain.

  3. How does a miner pick which transactions that gets added to the next block?
    ā€¢ A miner picks the transaction with the highest fees, thereby gaining the most profit. Higher fee transactions are picked up faster and are more efficiently processed.

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#1602

What is the difference between a SPV (simplified payment verification) and a full node?
An SPV only validates your own transactions and connects to a full nodes when it needs to interact with the blockchain.

What does it mean when a transaction is broadcasted?
A transaction has been sent to the network and into the mempool.

How does a miner pick which transactions that gets added to the next block?
Miners tend to pick transactions with higher fees first in order to earn more.

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#1603

  1. An SPV does not have enough memory to hold the entire blockchain.

  2. It is sent out to all the other nodes.

  3. The generally pick transactions with the highest fees.

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#1604
  1. What is the difference between a SPV (simplified payment verification) and a full node?
    A SPV does not contain the full version of the blockchain. For that reason SPV need to be connected to a full node to request reliable/full data. A SPV could be running on a smartphone while a full node requires a desktop computer to be operational.
  2. What does it mean when a transaction is broadcasted?
    A wallet will combine the input of transactions (UTXO) to make transactions out of the wallet possible (output). The wallet send out the transactions to the nodes. The nodes places the transactions into the mempool so it can be picked up by the miners worldwide.
  3. How does a miner pick which transactions that gets added to the next block?
    The miners can find the transactions in the mempool. Most of the miners picks up the transactions with the highest fees. That makes it more profitable to mine (blockreward + miningfees = total reward). That does not necessarily mean that all blocks contains the same data of transactions.
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#1605

1 Smaller version of the blockchain
2 copy of mined block is sent to everybody in network
3 typically they look for ones that pays the most fees

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#1606

This is when a block gets broadcasted. Transaction must be first broadcasted to the network on its own so miners can pick it up and put it in a block :slight_smile:

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