Assessment 1

1. What are the traits of a node?

   1. The ability to check for invalid transactions, generate proof-of-work, and earn transaction fees.

   2. The ability to monitor and store all events that are occurring on the network in real-time.

   3. The ability to collect transactions and propagate them to other nodes.

   4. The ability to produce and distribute valid blocks, and validate blocks they receive.

2. What does a node do with valid transactions?

   1. Enter them into the block header to create a hash puzzle for proof of work.

   2. Collect and store them.

   3. Assemble them into a block for addition to the chain.

   4. Distribute the funds to the transaction’s recipient.

3. What does Proof of Work incentivize?

   1. The submission of honest blocks to the network

   2. Open, honest yet competitive co-operation between nodes

   3. Investment in network infrastructure

   4. All of the above

4. What are the correct steps to running the network?

   1. 1. Each node collects new transactions into a block.

      2. Any new transactions are broadcast to other nodes.

      3. Nodes work together to find a difficult proof-of-work for the next block.

      4. When one node finds a proof-of-work, it broadcasts it to all nodes for acceptance.

      5. Nodes accept the block only if all rewards are equitably shared.

      6. Nodes express their acceptance of the block by hashing their reward into the next block in the chain, using the acceptance hash as the previous block.

   2. 1. New transactions are broadcast to all peers on the network.

      2. Each peer validates the transactions before determining which ones the nodes may put in a block.

      3. Nodes accept the list from peers before they begin difficult proof-of-work for the block.

      4. When a node finds a proof-of-work, it broadcasts the block to all peers.

      5. Nodes accept the block only if all peers accept its validity.

      6. Nodes express peer acceptance of the block by working on creating the next block in the chain, using the hash of the accepted block as the previous hash.

   3. 1. New transactions are validated by all nodes that receive them.

      2. These new transactions are put into a block.

      3. Node work on finding a difficult proof-of-work for the transactions they’ve seen.

      4. When a node finds a proof-of-work, it broadcasts the transactions to all nodes.

      5. Nodes accept the transactions if the block they are in is valid and its reward is not already spent.

      6. Nodes express their acceptance of the transactions by publishing them as the next block in the chain, and begin using new transactions to make a new block.

   4. 1. New transactions are broadcast to all nodes.

      2. Each node collects new transactions into a block.

      3. Each node works on finding a difficult proof-of-work for its block.

      4. When a node finds a proof-of-work, it broadcasts the block to all nodes.

      5. Nodes accept the block only if all transactions in it are valid and not already spent.

      6. Nodes express their acceptance of the block by working on creating the next block in the chain, using the hash of the accepted block as the previous hash.

5. Which participants are the most rewarded by following these instructions.

   1. The participants with the most hash power.

   2. The participants with the most mining hardware.

   3. The most honest, open and capable participants.

   4. The most profit focused and determined participants.