Homework on Mining and Proof of Work - Questions
Why is it important to make sure that miners spend money (on electricity) while mining?
Why would it be very difficult for someone to go back change a previously added block?
How does the network regulate mining difficulty?
So they lose money if dishonest
They have to mine 2 blocks faster then everyone else mines 1.
The protocol lowers and raises the difficultly to keep blocks as close to 10 mins apart as possible.
Why is it important to make sure that miners spend money (on electricity) while mining?
Otherwise everyone could setup a blockchain or is able to change the whole blockchain. There must be an investment to be able to secure the blockchain.
Why would it be very difficult for someone to go back change a previously added block?
Because all the blocks are cryptographic related with each other. When you change something in a block you have to change all the blocks.
How does the network regulate mining difficulty?
By checking the time asolution is found. When it take longer dan 10 minutes puzzle will be easier.
This is how the Incentive works. The costs ensure the miner follow the rules of mining. If they don’t spend money, they don’t have any restrict, this equals they could break the rules without any punishment, they could do anything they want.
Because when man go back change the previously block, every following block has to change too, meanwhile other miners are adding new blocks. It demands super hashpower which is almost impossible.
By using target, only the hash number is less than the target, that block is accepted by the network. The more miners, the lower target, the more difficult to guess the nonce.
It is important to ensure miners spend money on electricity while mining so as to ensure a negative consequence to having a block rejected by the network
It would be nearly impossible to go back and changed a previously mined block because one of the things the hash of the current block is based on is the hash of the previous block, so you would need then to re-mine every block between the block you were changing and the current one, which is always being added to, which when you add the difficulty of using the nonce right to keep the hash number low enough makes it pretty much impossible.
The network regulates mining difficulty by setting a number the hash of the block including the nonce random number has to be lower than to be accepted. The more people mining the more difficult the problem is and the lower the number of the hash has to be to be accepted.
It’s part of the game theory in Bitcoin’s design. There’s a lot of upfront cost in the form of electricity and there are more incentives to play by the rules in order to receive a block reward and transaction fees.
The chain that links blocks is created by solving a mathematical equation (puzzle) that requires more computational power as its difficulty increases. The difficulty is proportional to the hash rate, which is determined by the processing power spent on it. The network always chooses the longest chain, so you would need to waste money and resources to first change an old block. Then you’d need to mine faster than the original chain, for which you would need at least 51% of the network’s hash rate, to eventually outpace the original chain all while losing a lot of money and resources. Theoretically possible, practically masochistic.
Mining difficulty is proportional to the network’s hash rate, which is a measure of users spending electricity, money, and processing power actively mining.
When it costs money, they need the reward to get out of costs and even make profit. This way they make sure they do a good job. If they want to do bad things to the network they will loose the reward and loose money.
You will need to re-mine all new blocks and create a longer change, this is just not doable.
The nonce will regulate the difficulty of the hashing ex: so the blocktime stays on ± 10mins for bitcoin. When there are more minders diffculty goes up, and visa versa
1. Why is it important to make sure that miners spend money (on electricity) while mining?
If it was free, everybody would try to mine. So there has to be an incentive to mine.
If you spend a lot of energy mining, the probability of receiving the reward (by finding a block) is getting higher.
2. Why would it be very difficult for someone to go back change a previously added block?
Because every block is hashed by the data inside the block combined with the hash of the previous block. So if something would change in a previous block, all hashes would become invalid and should be hashed again. That means that all the blocks should be mined again.
3. How does the network regulate mining difficulty?
If a lot of miners trying to mine, the difficulty is growing higher, if miners leave the opposite will happen and difficulty is going down.
Making them spend electricity on mining will set up the incentive. It becomes very costly to remine the whole blockchain if electicity is used.
If we change a previously added block, then the connection to the next block will break as the hash will change. So this will require re-calculating hash of all the subsequent blocks along with the new upcoming blocks. Which is infeasible to perform.
With increase in miners the hashing power will increase. So the difficulty to guess the nonce is increased by lowering the target, such that guessing of the nounce is aprox 10 min apart.
It is important to make sure that miners spend money while mining so that they have incentives to follow the rules and mine for bitcoin.
It would be very difficult for someone to go back and change a previously added block because it would change all hashes from existing blocks, and therefore change the block before it and destroy the links between those blocks.
The network regulates mining difficulty by it being of a higher difficulty when there are more miners and less difficult with less miners.
It´s an investment for them - therefore they have to play by the rules. Otherwise everyone would try to cheat the system or change it, because you don´t have an investment in it.
Because than he have to change this block, have to hash it and all following ones. And this have to be done faster, than all computers, which are connected to the blockchain, which is only possible, if you have 51% of the hashing power.
Every 10minutes a new block is mined. If more computers are trying to solve the problem, the hashing power will increase so as the difficulty. Less computers = less hashing rate = lower difficulty.
Before they get incentives they are already spending money on electricity which now leads the miners to want the incentives so they pay the electricity they just wasted by mining and the only way to get incentives is by playing by the rules.
Because every block is formed by the previous hash of the previous block so if you change anything in a previous block you would have to re-mine every block.
The higher the difficulty the lower the target and the lower the target the higher the amount of miners.
Why is it important to make sure that miners spend money (on electricity) while mining?
So that miners will have incentive to “play the rules”
Why would it be very difficult for someone to go back change a previously added block?
The price of electricity and hash power needed to mine such changes is not practical.
How does the network regulate mining difficulty?
By changing the difficulty of the target number.
Why is it important to make sure that miners spend money (on electricity) while mining?
So that the miners are incentivised to play by the rules and adhere to the protocol, failure to do so will nullify . their mining and in turn they will have spent funds ( on electricity) without reward
Why would it be very difficult for someone to go back change a previously added block?
The structure of the hash rate would mean that (1) a considerable amount of computing power is required (2) the subsequent blocks will be negated
How does the network regulate mining difficulty?
It regulates it through reducing the target Nonce needed to create the new Blocks accepted Hash
Homework on Mining and Proof of Work - Questions
Because it motivates them to make money and the only way to make money it to play by rules.
Because it will collapse the network through changing the hashes of the every block that subsequenting the changed block. To be able to overwrite the network someone will need to have 51% hashrate to change and catch up the original network, in the end overtake it and create longer chain to convience the network about the truth of the change. It would cost a lot of money so probably it would be more porfitable for that person to become miner in the original network and earn money by consensus.
By adjusting the mining target, the more miners are in the network, the lower this number is, the more difficult it is to guess the nonce.
