SPV - Assessment 3

1. A proposed solution to the vulnerability to SPV from a theoretical but possible attack, in which users wallets that use SPV to track valid transactions can be tricked into __________ i) for a short period of time, is by using a system to alert user wallets that there is a possibility that the ____________ ii). This system could then provide details of the ______________ iii), details of the ____________ iv) and the details of the longest valid chain, including the valid versions of any double spends inserted into the malicious chain.

   1. i) accepting double spends, ii) transaction is a double spend attack, iii) transaction ID, iv) block,

   2. i) following an invalid chain of proof-of-work, ii) longest chain they are downloading could be in-fact a rejected dishonest attack chain, iii) earliest block in the invalid chain, iv) detected invalid transactions

   3. i) forking the chain, ii) the transaction is invalid, iii) transaction’s sender, iv) transaction’s recipient

   4. i) following an attacker’s chain, ii) attacker may be trying to double spend, iii) attackers wallet, iv) transaction ID

2. What is advisable to businesses that are making or receiving very large numbers of transactions?

   1. They should operate using Simplified Payment Verification to minimize their cost and effort in accepting bitcoins as payment.

   2. They should consider operating their own node to participate in the network by validating transactions and building blocks.

   3. They should operate a lightweight node client to retain a full copy of the blockchain.

   4. None of the above.

3. What is/are the main benefit/s of operating a node for businesses that are making or receiving very large numbers of transactions?

   1. Doing so allows a business to pay less in transaction fees and hide their transaction activity from competitors.

   2. Operating a node secures the business from any potential theft of bitcoins from wallets under their control and maintains payment privacy for their customers.

   3. Doing so allows a business to follow the valid chain closely, providing visibility to any attempted double spends directed at them.

   4. All of the above.

4. What additional benefits are there for a certain type of business to operate nodes?

   1. Operating a node provides new business opportunities for major online payment processors to enhance their own operational security.

   2. Operating a node provides banks the ability to create their own currencies along with better management of their clients security.

   3. Operating a node provides benefits to online retail platforms looking to decrease the costs associated with managing sales and taxes..

   4. None of the above.

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