Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#223

  1. It is the mechanism in the real world to proof of the virtual world that there is no sibyl attack being done.

  2. Every block is linked in a cryptographic hash to the previous block thus it will change and cant be undone by not undoing everything else.

  3. The network sets a target by the the amount of hash rate being committed to the network.

#224
  1. They are incentivized to secure the network. The more energy is spent on securing the network, the more expensive it is to attack the network and do a double spend. Thus miners are incentivized with block rewards (money) to secure the network by spending energy.
  2. Because the hash of previous blocks is included in the new block. Making change in an older block requires to remine all blocks thereafter because the hash has changed for every block (links between blocks are effectively broken). Not only do you have to remine the blocks, you need to catch up with the rest of the network and overtake them even to obtain the longest chain and be accepted as truth.
  3. The more computing power in the network, the more the difficulty is increased (by the protocol), the lower the target number for the block hash becomes (which is more difficult to guess and costs more energy).
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#225

Mining uses electricity, and electricity costs money. Miners lose bitcoin/satoshis if their block is rejected and don’t follow the rules of the blockchain.

In order to change a previous block, all postceding blocks would have to be rehashed, but because a new block is formed every 10 minutes, it is nearly impossible to be able to rehash all future blocks fast enough.

When there are a lot of miners, the difficulty is increased with a lower target level.

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#226
  1. They are invested in the game and therefore encouraged to stick to the rules.
    2.It would changethe hash of all following blocks.
  2. By lowering the target of the nonce.
#227

The nonce is not the target. It is a random number that the miner needs to add to the block to make sure that if you hash the block with this nonce init, the hash is below the difficulty target (blockhash needs to have a certain amount of leading zero’s to be a valid block)

#228
  1. Because they need to pay for that electricity and if they want the rewards that come with the mined block they will need to stay truthful, otherwise others on the network will reject the block and the electricity costs will be for nothing.
  2. Because it changes all the next hashes (“puzzle results”) in the chain so one would have to catch up to the other miners (be much quicker then everybody else) while in the meantime new blocks would have already been added to the blockchain.
  3. The network regulates the mining difficulty by number of miners. More participants will mean a much lower target hash will be needed for the next block which in turn means fewer possible solutions & harder to find the right result. And vice versa.
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#229
  1. Its important that miners spend money on electricity primarily to make it extremely expensive to even attempt to cheat the network.
  2. Its difficult to change an open Blockchain, because the record of prior transactions are on all the nodes within the network therefor to change a prior block all the previous blocks have to be changed so the hash will correspond creating the longest change, all while the network is still creating blocks. But in order to do this it would take an extreme amount of computing power and money without any real guaranty for success.
  3. Mining difficulty increases as more miners come into the network (higher hash rate) and the target number will be lower, and decreases as less miners are on the network and the target number will be higher.
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#230

  • Why is it important to make sure that miners spend money (on electricity) while mining?
    the high cost of the electricity expenditure ensures that the miners follow the rules. if the rules are broken miners don’t stand a chanche to get block reward and fees since the network is gonna verify the validity of the block, and discard it in case of fraud.

  • Why would it be very difficult for someone to go back change a previously added block?
    because of the structure that links together the blocks if there is any change in the preexisting chain all the links between blocks are going to brake. this because every hash is based on the content of the block, on a random NONCE and finally to the ash of the previus block that was also based on this data.

  • How does the network regulate mining difficulty?
    the mining difficulty is regulated with a target.
    the target is set in base of the hashrate of the entire network.
    the rule so is that the value of the hash of the block need to be lower than the defined target to be valid.
    the lower the target,the lesser the the more difficult is to find the correct solution to the puzzle.
    at high hashrate will have a lower target.
    hence the network regulate mining difficulty raising or lowering the target.

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#231

  1. to make sure that they follow all the rules. if don’t don’t follow the rules of the protocol their new mined block will not be accepted by the nodes, and because they have to pay the electricity up front, they will lose money on that electricity without getting any rewards for it because their block will be denied.

  2. if you would change a previously added block all the hashes change and the entire chain from their on will be broken. you would have to mine every block after it again on your own while all the miners with their combined hashrate are adding new blocks. you would have to have more than 51% of the total hashrate to even start chasing the longest chain to eventualy pass them.

  3. by making the hash target for the new block higher if hashrate is low and making the hash target lower when hashrate is high.

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#232

Homework on Mining and Proof of Work - Questions

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
  • Btc is hard money so the miners are incentivised to keep mining blocks to pay for electricity. This proof of work is what gives BTC value
  1. Why would it be very difficult for someone to go back change a previously added block?
  • the amount of time and energy needed to attempt this successfully is astronomical. Due to the proof of work code you would have to change not only every block ever produced but also the new blocks which are being created whilst doing so. With this much power you would be better off being honest and mining for rewards instead
  1. How does the network regulate mining difficulty?
    The network adjusts the target for guessing the nonce depending on the speed of the network (approx every 10 mins for BTC) The power the target the more difficult it is. This ensures that hash rate is controlled and the system remains as secure as possible
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#233

  1. If they weren’t spend money they could cheat. This cost force people (who want to earn money) follow the mining rules.

  2. Because all the next blocks will change too, and in order to solve the puzzle a person will need an endless amount of money to make all those changes.

  3. The more the miners the lowest the hashed number.

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#234

Homework on Mining and Proof of Work - Questions

  1. Why is it important to make sure that miners spend money (on electricity) while mining?

So they have skin the game and to be incentivized to be honest electricity is basically a monetary insensitive to perform by the rules or they lose that investment .

  1. Why would it be very difficult for someone to go back change a previously added block?

It is very time consuming to do so because you would have to go back and rehash all previous blocks and while you’re doing that recovering data and rehashing the previous blocks the other miners blocks are in increasing in size and will be completing new blocks. Not very practical or financially feasible.

  1. How does the network regulate mining difficulty?

The network regulates the mining difficulty by setting the target low when the difficulty is high as so the miners can find the nonce more efficiently.

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#235
  1. It is important to make sure that miners spend money on electricity while mining because that will prove that processing time was spent to solve the cryptographic puzzle, and that constitutes Proof of Work. Proof of Work is important because it will detain miners from trying to change previous blocks, keeping the blockchain untampered.
  2. It is very difficult for someone to go back and change a previously added block because all the links to that block would be broken (because the cryptographic puzzle is based on the content of the previous block), making it necessary to remine all blocks after the altered one. Since many miners continue to produce proof of work and add blocks to the blockchain, it would be practically impossible for a single miner to alter a previous block, remine all subsequent blocks, catch up with the added blocks and append new ones making it the longest chain and be chosen by the network instead of the one created by all other miners.
  3. The network regulates mining difficulty through a direct relation between mining difficulty and the hash rate. Because it is intended that a new block is added every 10 minutes, the mining difficulty rises the more people are mining and vice-versa.
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#236
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

It is important to make miners responsible, if they are serious in their work, they are compensated. If not, they are not rewarded by the network and still lose money from electricity.

  1. Why would it be very difficult for someone to go back change a previously added block?

Yes, it almost impossible because the hashes of previous blocks are connected, and change something will change all the blocks forward, making two possible chains. So if that happens, the invaders have to re-mine the blocks after, and the network, in consensus, accepts the longest chain (more PoW) as the true chain. So it is a big problem tray to change something because it will be very expensive and the chances of being successful are infinity low.

  1. How does the network regulate mining difficulty?

The networks regulates mining difficulty with Target. Low target high difficulty, and high target easy difficulty. This target is a measure to find a Nonce, in order to validate the blocks, miners have to solve that puzzle (includes prev. block hash and nonce) to connect cryptographically the chain.

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#237
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    So they lose money if they are dishonest.
  2. Why would it be very difficult for someone to go back change a previously added block?
    Every block is chained together on the blockchain. In order for someone to change a previously added block, he has to solve the puzzles associated with all the previous blocks on the blockchain.
  3. How does the network regulate mining difficulty?
    The bitcoin blockchain network will make sure new blocks will be produced every 10 minutes by adjusting the mining difficulties based on the mining hash rate.
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#238
  1. Because otherwise everybody would try submit a block to the blockchain all the time. Every second or maybe even milisecond. That would make it impossible to find a consensus about which block is the right one to be added. Plus checking if the blocks follow the protocol rules would be very hard if thousands of blocks are sugested every second.

Because it makes all the later blocks invalid when you change data in an earlier block. The hash becomes too high in all later blocks.

It changes the number that the hash has to be below to a number where one block is aproximately mined every 10 minutes.

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#239

  1. It will then become very expensive to be dishonest with the blockchain so they are incentivised to play by the rules.

  2. Because it would break all the links between the blocks and would be practically impossible to solve all the puzzles to create the new links before everyone else on the network to catch up.

  3. With more miners the difficulty increases by the target of the puzzle being lower.

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#240

Ok what I meant was lowering the target for the nonce to be smaller than the target.

#241

the hash of the entire block has to be smaller, (not the nonce)

#242

1.To insure that miners be honest and play by the rules POW is needed to ensure miners lose money if dishonest,
2.By changing a previous block it would change all blocks breaking the chain so the manipulator would have to mine all blocks over again to the current block.
3.The Network regulates mining difficulty by the nonce- target low when the difficulty is high as there are more miners.

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