Homework on Bitcoin Ecosystem - Questions

Blockchain and Bitcoin 101
#1647

  1. A SPV doesn’t have the entire blockchain, but instead queries a full node for specific information.

  2. When a transaction is broadcasted, it is simply sent to the Bitcoin network.

  3. The miners pick the transactions first which have the highest ratio of satoshi/byte as they pay the most.

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#1648

Technically the wallet part generates transactions and can be either part of a full node or an SPV :slight_smile:

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#1649
  1. And SPV does not hold the entire blockchain and must request info from full nodes which do hold a copy of the entire blockchain. This is a system of disseminating transactions to miners for possible block creation.
  2. Broadcasting a transaction requires passing along these transactions through SPV’s and full nodes for possible acceptance into a block compilation.
  3. Miners always pick the transactions that pay the most per the amount of space it will take up on the blockchain.
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#1650

spvs get data from nodes nodes have access to blockchain

when a transaction is broadcasted it means that data is being sent around to all the nodes

depending on the higher fees

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#1651
  1. SPV only store a portion of blockchain network and pool more data from the closed node if needed.
  2. When a wallet broadcast a transaction to the network, this transaction will be put into the mempool of nodes to wait for being mined.
  3. Normally it is based on the tx fee to maximize miners’ profit.
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#1652
  1. an SPV is a simple node which will check that any new block sent by miners is valid, which means that all the transactions it contains are valid, and the nonce does indeed answer the cryptographic puzzle. A full node by contrast stores the entire blockchain and will add the new blocks it receives to its copy of the blockchain after validation
  2. When a transaction is broadcasted it is added to the mempool, i.e. added to the list of unconfirmed transactions stored by all nodes
  3. A miner picks the transactions which are the most profitable, i.e. the ones offering the highest fees per byte
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#1653

  1. The difference between a SPV and a full nodes, is that the SPV does not store the whole blockchain locally on the machine you are using. It only stores your private keys, it then contacts other nodes to get a copy of the blockchain. A full node has a local copy of the entire blockchain.

  2. What it means when a transaction is broadcasted is that it is being send from the wallet, to all the nodes on the network, it will then be added into the mempool and wait for a miners to include it in a block.

3.Miners usually pick the transactions with the highest fees to add to the network next, although this is not required, this is what is done, because there are incentives to do this.

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#1654
  1. SPV does not store a version of blockchain locally. It has to query nearest node to read blockchain record
  2. Broadcasting tx means that the created tx has been sent to the network and sits in mempool
  3. As miner are rewarded through the tx fee - they usually choose tx’s with the highest fee.
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#1655

SPVs are also called light nodes and don’t download the entire blockchain, they also don’t verify blocks but trust the full nodes they connect to. They only download some parts of the block (merkle proofs) to verify the transactions relevant to the keys they store. :slight_smile:

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#1656

Homework on Bitcoin Ecosystem - Questions

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

A full node maintains a copy of all the bitcoin blockchain of all the transactions. The copy is made by the full node from the first block. The full node is independently and confirms the transactions without the need of outside help. The full node acquires new information from new blocks and transactions independently. The full node allows the operator to work without external servers. Regular computers don’t allow enough storage space to run a full node. It would take a long time. The SPV payment verification creates a chain of blocks without transactions. The amount of data on a smaller device is much smaller in size.

  1. What does it mean when a transaction is broadcasted? Client creates a new transaction, adds it to its memory pool
    Information is hashed in the mempool about the transaction to the connected nodes. This information is confirmed and information is checked by other nodes and hashed. It is broadcasted to all nodes connected to the network.

  2. How does a miner pick which transactions that gets added to the next block?
    Miners pick transactions with the highest fees. Miners also chose information from nodes closest to them. The miner should confirm at least 6 blocks to prevent orphaned blockchain and mine on the true blockchain. This prevents remining, wasting energy, and losing the opportunity to profit.

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#1657

What is the difference between a SPV (simplified payment verification) and a full node?
An SPV is not the full copy of the blockchain, but connects to a full node to get the latest information.

What does it mean when a transaction is broadcasted?
It is sent to the mempool and is waiting to be mined.

How does a miner pick which transactions that gets added to the next block?
They usually pick the transactions paying the highest fees first.

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#1658

Thanks for the clarification!

#1659

Miners don’t mind about this rule, when they find a block they immediately start mining a new one, even if it eventually becomes stale.
The 6 confirmations rule is a rule of thumb important to the user that is sending or receiving a transaction. :slight_smile:

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#1660

1.spv doesnt store/hve all utxo data n get data from fully set nodes
2. Info is being store and communicated across the net work, usually after a transaction is being completed
3. By nonce

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#1661
  1. The difference is that the SPV needs to be connected to a node in order to receive the blockchain information.
  2. When a transaction is broadcasted the node that received the information send it to the rest of the nodes on the network.
  3. Miners are paid with transaction fees, therefore miners have an incentive to mine transactions with the higest fees to the next block first.
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#1662

A nonce is used by miners to find the correct hash of a block, it doesn’t have anything to do with how transactions get selected into a said block.

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#1663
  1. A full node has the complete blockchain locally stored, an SPV not
  2. A wallet sends a tx to the network
  3. the ones with the highest fees
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#1664

  1. An SPV does not contain the blockchain. It simply gets data from a node (which contains all of the information in the blockchain).

  2. When a transaction is broadcasted, it means the transaction has been sent to all of the nodes on the network.

  3. Miners choose transactions from the mempool. The transactions with the highest fees get top priority.

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#1665

  1. a spv is isolated and only has a portion of the blockchain on it. The spv has to connect to a full node to get a full copy of the blockchain.

  2. A transaction is broacasted when it is mined and sent to other nodes.

  3. They typically add transactions with the highest fees so they can make the most money,

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#1666
  1. What is the difference between a SPV (simplified payment verification) and a full node? An spv can not access the full blockchain while a full node can. An spv also generates transactions while nodes don’t
  2. What does it mean when a transaction is broadcasted? It means that the transaction has been through all the other nodes in the network
  3. How does a miner pick which transactions that gets added to the next block? Picks transactions from the mempool with the highest fees
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