Homework on Bitcoin Ecosystem - Questions

Blockchain and Bitcoin 101
#1807
  • What is the difference between a SPV (simplified payment verification) and a full node?
    Full node have a complete blockchain copy, SPV needs to rely on a full node to consult the blockchain
  • What does it mean when a transaction is broadcasted?
    send the transaction to the neighbors (nodes)
  • How does a miner pick which transactions that gets added to the next block?
    Thanks to the mempool and the transactions with highest fees
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#1808

1 What is the difference between a SPV (simplified payment verification) and a full node?
The SPV don’t have the ledger, the blockchain data. The SPV is a small node and trust in a full node when it wants to read the blockchain.

2 What does it mean when a transaction is broadcasted?
That it is transmit to the node on the network. To propagate the TX

3 How does a miner pick which transactions that gets added to the next block?
They pick the TX from the mempool. More TX are in the block higher the TX rewards. Because the TX fees aren’t correlated with the TX value.

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#1809

what happens if two minor create two different blocks so the chain is forked and each of the blocks have some transaction in common some different. later when one of the chains continues and the other shorter chain is dropped. the transactions in the stale block are returned to the mempool. but what about those transaction that were common to both stale block and the block on the long chain?

dont we only want to return transaction from the stale block that are not already in the new chain?

#1810
  1. an SPV only validates transactios and does not store a copy of the entire blockchain.
  2. It is send to other nodes (thus entering the mempool)
  3. By choosing the one with highest fee (satoshi per byte).
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#1811

  1. SPVs perform the tasks of the node by verifying transactions without the need to download the whole blockchain. Nodes on the other hand have to have a copy of the entire blockchain each in order to verify and pass on a transaction.

  2. When a person want to send a bitcoin from their address to another address the transaction is recorded on the blockchain. It starts with the wallet confirming it and sending it to the blockchain via the Nodes that confirm the activity. When the Nodes confirm and update the transaction on the blockchain they share the ledger with each other, hence broadcasting it. This way everyone has the same copy.

  3. A Miner will pick the transaction with the most proof of work and that is seen by how many blocks are produced for a transaction, in cases where there are deviant chains and a choice need to be made between them, the chain with the most blocks, (confirmations) wins out.

#1812

  1. An SPV is a node that does not contain the entire blockchain, such as a mobile phone trying to make transactions. They rely on a full node to consult the status of the blockchain.

  2. It means the transaction is propagated to the whole network. It sits in the mempool until it is added to a block appended to the blockchain.

  3. Usually they will pick the transactions with the higher transaction fees.

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#1813
  1. What is the difference between a SPV (simplified payment verification) and a full node?
    SPVs are small nodes that doesnt contain the full chain on themselves but rather request a query from a full node whenever its needed.
  2. What does it mean when a transaction is broadcasted?
    it means that the tx has been propagated through the network as valid, the its put into the node mempool waiting for a miner to pick it up.
  3. How does a miner pick which transactions that gets added to the next block?
    miners will most likely pick those Tx with higher fees.
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#1814
  • What is the difference between a SPV (simplified payment verification) and a full node?

= An SPV need to “dial” and fetch the blockchain from a node, it does not contain a copy itself. The node has a copy of the entire blockchain.

  • What does it mean when a transaction is broadcasted?

= When a transaction is broadcasted it means it has been validated and is sent from a wallet to a node added to the mempool and then forwarded from that to the next node until a miner picks it up.

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

= Miners selects transactions from the nodes mempool, usually the ones who has the highest transaction fee, sat/B.

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#1816

1.- A node store the full copy of the blockchain while SPV store part of the Blockchain which is relevant for him/her TXs.

2.- The node has verify the TX and has send to the rest of nodes in the network so can accept an other TX to be verify.

3.- The miner will pick first the higher fee TX.

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#1817

Yes, the transactions that were in both blocks don’t get returned to the mempool. :slight_smile:

#1818

Transactions get broadcasted before they become part of the block, they must be shared between nodes so the eventually get into the miners mempool that will put it in a block.

Transactions don’t have PoW. Depending on their size and fee ratio some transaction would be more profitable for a miner to put in a block than others and so they will prioritize transactions with a higher sat/byte ratio. :slight_smile:

#1819

Transactions is broadcasted to the nodes and gets put in the mempool, once a transaction is mined in a block, the block gets broadcasted and put on a blockchain. :slight_smile:

I’m not sure I understand what you mean by that. Miners usually prefer transactions that have a higher sat/byte ratio. :slight_smile:

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#1820

The SPV can query the blockchain, but does not have the full copy.

It means it is propagated to the other nodes in the blockchain.

Typically depending on the satoshi per byte.

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#1821
  1. What is the difference between a SPV (simplified payment verification) and a full node?

A full node can listen and propagate transactions when it talks to the blockchain. A full node also puts transactions into the mempool for the miners to go in and pick their transactions to put into their block. Where a SPV is just one of 4 or 5 versions of a wallet which has your private key, but doesn’t have a blockchain attached. A SPV can communicate and signal with the blockchain to fulfill transactions.

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

It means that at first a transaction is put out there to the nodes to see and insert into the mempool. Once it is mined by one of the miners, it is broadcasted again so that it can be put onto the blockchain. And usually will have to wait for 6 confirmations for the transaction to be securely accepted on the blockchain through the network.

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

A miner picks which transactions get added to the next block from the mempool. And usually, the miner will pick the transactions with the higher satoshi/byte ratio and higher fees because it’s part of their incentive of getting paid from spending on electricity to mine.

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#1822
  • What is the difference between a SPV (simplified payment verification) and a full node?

SPVs store relevant transactions, while Full Nodes store the entire blockchain.

  • What does it mean when a transaction is broadcasted?

A transaction is distributed throughout the other network of nodes.

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

A miner chooses an unconfirmed transaction with a desired transaction fee and hash rate.

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#1823

  1. What is the difference between a SPV (simplified payment verification) and a full node?
    A: An SPV does not contain a copy of the blockchain, whereas a node does carry a complete version of the blockchain.

  2. What does it mean when a transaction is broadcasted?
    It means that your wallet has send a transaction to a node to be verified as valid. Nodes then send it to other nodes in the system.

  3. How does a miner pick which transactions that gets added to the next block?
    A miner will pick transactions that have the highest fees attached.

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#1824
  1. Full node has a copy of entire blockchain whereas SPV query information from other nodes.
  2. When a transaction is broadcasted it is propagated to all full nodes and verified.
  3. Usually miners picks those transactions from mempool with highest fees.
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#1825

Once the tx is mined, the block gets broadcasted, containing the tx. :slight_smile:

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#1826

Transactions don’t have hashrate. Blocks get mined with a specific target difficulty based on the network hashrate. Miners usually prefer transactions with higher sat/byte ratio. :slight_smile:

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#1827

1.SPV Doesn’t have full copy of blockchain needs to connect to full node.
2.A transaction is sent to all nodes on the network.
3.Normally the ones with the the highest transaction fees

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