Overview
Simple Payment Verification (SPV) is a method for verifying if particular transactions are included in a block by only having to download the block headers of each block, instead of the entire block, which includes all of the transactions. These SPV/lightweight clients are especially useful for clients who have limited memory space and simply want bitcoin wallets without downloading the entire blockchain.
There is also lightweight mining software, which differs from lightweight wallet software. Instead of using SPV, users can mine using other methods without downloading any data from the blockchain. One way users with these lightweight clients are able to mine is by joining a mining pool. These miners work outside the network and only need to mine the transactions the pool operator gives them, trusting that the operators have the entire blockchain and the transactions given to them are valid. It is up to the pool operator to listen for new blocks and validate the transactions. To do this, the operator sends the miner a template of the block to be working on. If a block is found, it is bound to this template, which includes the coinbase transaction that gives the reward to the pool operator. This way, a user cannot steal the reward for themself if they find a block.
getwork, getblocktemplate, and Stratum
getwork is a remote procedure call method that a client can call to get a block header from a mining pool operator. However, a caller of this method does not receive any information about the block or the transactions within it. A malicious server could easily send this user a block header hash that contains invalid transactions, and the user would mine on this invalid block.
getwork has been replaced by getblocktemplate, which allows miners to create their own blocks instead of having to trust somebody else (e.g. a pool operator) to provide them a valid block to mine on. Only a block template is provided with specific configuration parameters, with block data that the client can modify if needed. This way, the control is given back to the miner, because they can now choose the transactions to be included in the block they are mining on. However, miners are incentivized to include pool specific data, such as a coinbase transaction to the pool operator in order to make valid shares and get rewards from the mining pool.
Although getblocktemplate does provide good functionality, it requires a lot of bandwidth due to the transferring of the entire block. Because of this scalability issue, some pools now use Stratum, which is another protocol for mining. Similar to getblocktemplate, the server sends the client a block template. However, in Stratum only the block header and first transaction are included, instead of the entire block.
Validationless Mining
In order to mine, a client needs to have the block header hash of the previous block, which comes from the block header of the previous block, which in turn is generated from previous block. One piece of information our new block needs to have is the block header hash, as we must reference the previous block in the chain. They can simply receive this value from an external source and mine on that block. This comes with one caveat, however, as the miner cannot validate the block header hash and must place trust in whatever source such as a pool operator they are getting the block header hash from.
Spy Mining
In mining pools, once a block is found, the block header hash is sent immediately to the miners so they can all start mining on the new block as soon as possible. Competing miners that are outside of this mining pool can take advantage of this by connecting to the mining pool, listen for the block header hash, and mine on it for themselves.