Some wallets scan each transaction, different wallets use completely different mechanisms to find out about funds. Bitcoin is a peer-to-peer gossip community. Nodes on the Bitcoin community announce new blocks instantly to all their friends, so in case your pockets software program interacts with the Bitcoin community, it’s going to know to scan for updates every time a brand new block is introduced. Pockets software program that doesn’t immediately take part within the Bitcoin community usually polls a server to request updates or may register for push notification, however normally doesn’t course of the whole blockchain itself. In case your pockets is just on-line intermittently, it’s going to study concerning the transactions as quickly because it comes on-line and catches as much as the chaintip.
- Full node
Should you run a full node, it’s going to find out about new blocks from peer bulletins and course of the blocks itself. The Bitcoin Core pockets will scan every transaction because it enters the mempool and scan each transaction on every block because it is available in. It should determine any transactions that include identified output scripts, and any transactions that spend any of its personal UTXOs. - Mild consumer
Should you run a light-weight consumer (that doesn’t maintain a full copy of the blockchain), it could use bloom filters, the Electrum protocol, or compact block filters to find out about funds. Every time a brand new block is introduced on the community, the sunshine consumer makes an attempt to find out about new confirmed transactions that pay it. Some mechanisms additionally let it find out about unconfirmed transactions paying it.- Compact block filters
Since about 2020, many full nodes provide compact block filters (BIP 157, BIP 158). You’ll be able to consider them as a register for trying up “addresses” in blocks. Some gentle shoppers obtain this compact block filter every time a brand new block is discovered, after which client-side examine whether or not any of their output scripts or UTXOs produce hits on the filter. In the event that they get a success, they obtain the entire block and parse every transaction to search out those related to them. This has fairly first rate privateness, because the pockets may even obtain the compact block filter and the block from completely different friends, in order that the friends truly study subsequent to nothing about what the pockets was . It trades this privateness off with the next bandwidth utilization and extra implementation work, because the node truly wants to have the ability to parse blocks and implement BIP 157 and BIP 158. Additionally, the compact block filter protocol can’t inform about unconfirmed transactions, so a light-weight consumer that solely will depend on it’s going to solely find out about transactions as soon as they’re confirmed. - Bloom filters
Transaction bloom filtering was launched by BIP 37 in 2012. The consumer would craft a bloom filter from its addresses, hand this filter to the server, the server would scan its mempool and up to date blocks with the filter and return any transactions that produced a success. The bloom filter had a configurable false-positive price, which was supposed to supply some believable deniability. This scheme has since fallen out of use, because it had a number of points. Firstly, the false constructive price needed to be set so excessive to really obtain any privateness, that it could have dramatically elevated bandwidth use. Subsequently most wallets set the false constructive price low and basically leaked their whole handle listing to any peer they requested the bloom filter service from. Secondly, the nodes providing this service would wish to run a separate filter for every consumer which may trigger quite a lot of computation, particularly on a rescan of an previous pockets. Providing the bloom filter community service opened a node as much as a number of DOS vectors. Bitcoin Core 0.19 disabled this service by default. - Electrum protocol
Most gentle shoppers use the Electrum protocol. The sunshine consumer connects to a pre-defined or random Electrum server on the community and tells the server precisely what output scripts it’s fascinated by. The server checks whether or not it has any hits in its database and serves the corresponding information. That is easy to implement and makes use of minimal bandwidth, however the gentle consumer leaks its whole physique of addresses to the Electrum server together with even addresses that by no means received paid.
- Compact block filters
- Account with custodian
In case you have an account with a custodian, your “pockets” software program
connects to the service supplier’s backend to search for its account data. The service supplier pushes notifications when a brand new fee is noticed or a fee is confirmed.
