Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#3938
  1. To incentivize them to do the work because they are paying for the power.
  2. Because all subsequent blocks would become invalidated.
  3. The more miners there are, the harder it becomes to solve the nonce and thus the harder it is to obtain the proof of work.
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#3939
  1. 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.
  2. The chain that links blocks is created by solving a mathematical equation 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.
  3. Mining difficulty is proportional to the network’s hash rate, which is a measure of users spending electricity, money, and processing power actively mining.
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#3940
  1. in order to keep the incentives high, in order make sure they go about things the most efficient en correct way possible, in order to insure that no corruptions is done, this make corruption more expensive than the reward itself.
  2. Since that node/miner would have to redo all the work them selves, and all the new work being done on the blockchain up to real time. This would take too much time and money/power in order to compleet.
  3. the target number of the nonce is raised or lowered, in order to speed up or slow down the hashrate.
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#3941

  1. To ensure they play by the rules, by being upright and do the right thing , so that they can recoup their investment.

  2. All the blocks are cryptographically linked by a
    Chain. And the hash of each transaction depends on the input and output of the block and the previous block hash.
    Changing any block will alter the hash of all the dependant blocks in the chain.

3… The network regulate mining difficulty by adjusting the difficulty level in relation to the number of miners to maintain 10 minutes time to add new block to the blockchain.

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#3942
  • Why is it important to make sure that miners spend money (on electricity) while mining?
    To solve puzzle efficiently and quickly in order to have their block accepted.
  • Why would it be very difficult for someone to go back change a previously added block?
    As it will affect hash function, links between previous blocks and to catch up newly added blocks by miners in network.
  • How does the network regulate mining difficulty?
    Network regulate mining difficult by setting target to lower if more miners are trying to solve the puzzle.
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#3943

  1. It is important that miners spend money while mining because it incentivizes them to play by the rules. Miners receive money when their block is confirmed through transaction fees and block rewards. This reward will make up for the money that they spend in electricity. However, if they do not get any rewards, they would be losing money. Therefore, it doesn’t make any sense to make an invalid block with the chance of it getting thrown away since they wouldn’t be getting rewarded. In fact, they would just be losing money. If they didn’t have to pay any electricity they could simply continue to try to confirm invalid blocks hoping they would slip a bad transaction through without anyone noticing.

  2. It would be very difficult for someone to go back and change a previously added block due to hashing. Every blocks hash is dependent on the previous hash. This would mean that in order to change a previous transaction, the person would have to redo all the connections between blocks until they got to the present. On top of that, they would have to catch up for the time missed mining the present blocks. Doing this would be nearly impossible unless they had 51% or more of the hashing rate.

  3. The network regulates mining difficulty by changing the target. The more miners there are, the lower the target, which makes the difficulty higher.

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#3944

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    Because it incentivizes an accurate proof of work to ensure a return on their investment.

  2. Why would it be very difficult for someone to go back and change a previously added block?
    Because every block which proceeds the hash of an altered block would be nullified - unless they were somehow able to alter every proceeding block faster than the market was able to mine them and become the dominant block.

  3. How does the network regulate mining difficulty?
    More miners in competition with one another in the blockchain means a higher level of mining difficulty due to a lower level target to reach.

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#3945

  1. Because by having mines spend money upfront, miners will follow the rules to get block reward and transaction fees to stay profitable. That ensures integrity of blockchain.

  2. Because once you make changes to TXs in a previous block, that previous hash and a hash of a current block will change and links between blocks will be broken. To mine again all the blocks by solving all new puzzles once again will cost extreme time and money.

  3. Hashrate determines difficulty. More people are mining on the network, more difficult it is to solve puzzles.

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#3946
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    Secure the network
    2.Why would it be very difficult for someone to go back change a previously added block?
    If you change something in the block, all of the connections from that block and forward block would be blocked. All notes should be able to see this block is invalid. You should change all the blocks, but it is impossible. The longest chain is PoW.
    3.How does the network regulate mining difficulty?
    More miners, the lower target, the more difficult to guess the nonce.
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#3947
  1. Spending money on electricity ensure following rules by miners so they can be rewarded.
  2. Changing previously added block demands spending more electricity and time to change that block and following blocks while new ones are created and they have to be changed also.
  3. When more miners mining, hash rate increasing so difficulty is increased then target is lower.
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#3948

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    It represents the investment they are making in the process and therefore the proof of work for which they get rewarded in the form of coins (inflation) and transaction fees.

  2. Why would it be very difficult for someone to go back change a previously added block?
    They would need to additionally change all subsequent blocks after the one they changed and have it corrected by 51% of the nodes. This is impossible.

  3. How does the network regulate mining difficulty?
    By adjusting the target below which the newly generated hash must reach. A low target defines a high difficulty as the range within which the newly generated hash should fall is a lot narrower.

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#3949
  1. Miner spent money on electricity upfront to show their proof of work . This is how they are incentivised.They get rewarded wih block rewards + transanaction fees if they play by the rules of the network.
  2. Because of BTC decentralized protocol nature - changing any of the data in the block even the slightest changes the hash value of that block. The nonce will have have to guessed again for that block and also all subsequent and prevoious blocks which would take incredible amount of time, thus not worth it for the miners (unless they cooparate and try to do the 51% attack, which is theoreticaly possible, but mostly impossible to execute)
  3. Mining difficulty is regulated by he hashrate. More miners means the total hashrate is higher. As the hashrate is higher this would lead o the target being lower and he lower the target the harder it is to guess by the miners.
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#3950

  1. To keep miners honest to create gains to cover expenses and get profits.

  2. It would disrupt the blockchain and create a loss.

3.by target and nonce

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#3951
  1. Miners will lose the money they have spent on electricity if the block is not accepted, Miners are incentivized to keep to the rules to avoid losing money and keep the network secure.
  2. All links of subsequent blocks would be broken and they would have to be re-mined and catch up with the network which is nearly impossible because the network will continue to have new blocks added to it.
  3. The target figure is lowered if there are more Miners which increases the difficulty of guessing the random number - the nonce .
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#3952

Miners are incentives to secure the network, they spend money on electrity to make the process transparent.

Because if someone wants to change a block then he would need to change all the previous and forward blocks which is impossible since every block has its unique fingerprint.

The network regulate the difficulty by lowering the target.

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#3953

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

Because it functions as an incentive for the miners to play by the book and do things right. If they perform malicious acts or try to modify something in within the blockchain for their own personal earning (e.g. invent a UTXO for themselves), simply the transaction gets rejected and they spent money on the electricity for nothing.

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

Because every block is hashed, and that hash is a result of the TXs included in the block, the nonce (random number) and the hash of the previous block. By simply making the slightest modification on previous block, the hash changes, making invalid the following hash. To achieve that modification, the miner should mine again all the following blocks, and do it faster than the rest of the miners, which is virtually impossible.

How does the network regulate mining difficulty?

It uses the target to regulate the level of difficulty on the mining process. The higher (lower) the target, the lower (higher) the mining difficulty.

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#3954
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

Due to the incentive based structure, if a miner is dishonest they will lose money.

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

If someone changed something in a previous block, that block and the connections forward will be broken. Meaning that they’d have to re-mine all the blocks with the longest chain, as new blocks are constantly being added. Makes me stressed just thinking about it. lol

  1. How does the network regulate mining difficulty?

The network regulates mining difficulty through the hash rate and changing the target for the nonce. The higher the hash rate the more challenging the puzzle, and the lower the target the more challenging the nonce.

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#3955

1- By encouraging them not to mislead the system but rather to be efficient and honest, otherwise they would lose money because they have already invested in electricity.

2- Because all the blocks are linked together by the their hash, their previous hash, the transactions and the nonce. As soon as they change one of those, even a single item, it changed everything.

3- By increasing the number of miners which lower the target and increase difficulty of reaching it.

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#3956

1.To form a pow, so miners get incentives for playing by the rules.
2. Because it will invalidate the blocks create after the changed block, which ruins the how pow chain.
3.By making sure that the target is always high, so that its easier to find the nonce.

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#3957

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    So they truly want to secure the blockchain network and to get rewards (fees and minted coins) so they can compensate for used electricity. As they only get rewards if they play by the book.

  2. Why would it be very difficult for someone to go back change a previously added block?
    As he would have to change/compute also all blocks after the one he altered while blockchain is still adding new blocks so his computing power needs to be larger then computing power of whole network which is extremely expensive and hard to archive on the other hand if such computing power is used to strengthen the network then they will be rewarded by doing so via mining fees and rewards.

  3. How does the network regulate mining difficulty?
    By lessening the target hash number so it is very difficult to get one so small

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