Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#3958

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    Spending money on mining incentivizes miners to follow the rules so they have a chance to win the block reward.

  2. Why would it be very difficult for someone to go back change a previously added block?
    If anything is changed or removed from a block on the blockchain, it changes the hash of the hash which then will invalidate every block that follows because each block on the blockchain has a unique hash that is based on the hash of the previous block. It would be almost impossible to achieve because each block would have to be re-mined.

  3. How does the network regulate mining difficulty?
    More miners equals higher mining difficulty.

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#3959

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    To motivate them to play by the rules and get the block rewards for a newly mined block. The lose money if the cheat.

  2. Why would it be very difficult for someone to go back change a previously added block?
    They would than have to change all the hashes in the following connected blocks, since everything depends on the hash of the block that is changed. In the meantime, hundreds of new blocks are added to the chain, so you would also have to rehash all those blocks too. Practically impossible.

  3. How does the network regulate mining difficulty?
    The more miners are working the lower the target of the nonce will be and the less options there are tho guess the right numbers. It will take more energy to find the nonce.

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#3960
  1. To incentivize them to recuperate their money and to make more money through rewards and and tx fees by keeping the network running and secure.
  2. Changing anything on a previous block will have a chain reaction in terms of hash values resulting in a breakdown of all the blocks following the modified one. The amount of time and energy spent on trying to find new hash values for all the affected blocks would be more expensive than simply focusing on mining new blocks.
  3. A target threshold rate of difficulty is established based on the amount of miners. If there are a lot of miners the threshold will be lower causing high difficulty, and with a low number of miners, the threshold will be higher causing less difficulty.
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#3961
  1. This incentivises the miners to do right and mine following the rules, expecting to get the block reward.
  2. It exponencially gets more difficult, as soon as you mine that block, an expect delay of several blocks will happen, this making impossible to make up the lost time and getting rejected because of the broken link between blocks.
  3. The more miners, the nounce is more difficult to guess, this by lowering the target.
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#3962
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    That is the pow needed to make sure transactions and new blocks are created.
  2. Why would it be very difficult for someone to go back change a previously added block?
    due to the complex hash made up of previous hash plus transaction and nonce. Redoing it would be almost impossible and worthless.
  3. How does the network regulate mining difficulty?
    The higher the miners the lower the target and difficulty and vice versa.
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#3963

  1. By spending money on electricity and solving cryptographic puzzles, Miners deliver proof of work. In order to get the monetary reward, they have to play by the rules, so their Block is beeing accepted and they get the tx fees and block rewards.

  2. Because the miner would have to mine the changed block and all the subsequent blocks all over again up to the current ones in order to get the changed block accepted into the blockchain. Wich is theoreticall possible but practically impossible.

3.If for example, many miners are currently mining, the network lowers the target, hence making guessing the correct nonce harder and vice versa. Regulating the time each block is mined to about 10 minutes.

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#3964

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    By spending money, miners are incentived to follow the rules, otherwise they will lose money.

  2. Why would it be very difficult for someone to go back change a previously added block?
    If that happens, this modified block will have to be mined again and all the following blocks after. This will cost so much money to do it that no one could ever think of trying.

  3. How does the network regulate mining difficulty?
    Mining difficulty will increase by lowering the target, which will make more difficult to guess the nonce of the block. The more miners the more the network will lower this target.

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#3965

  1. It gives financial incentive to be correct and honest. This keeps miners from going back to previous blocks and changing transactions or being able to double spend.

  2. If someone was to go back and change previous blocks the output hash would change and they would need to remine every block after the one they changed.

  3. The network adjusts the difficulty so that the more people mining the more difficult it is to produce a block.

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#3966
  1. Electricity is the cost that they stay honest and follow the rules or else they wasted their money on electricity.
    2.They would have to use a lot of computing power to change the block and every one after it until the present block.
    3.It regulates by increasing difficulty or lowering it so that blocks are mined every 10 minutes.
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#3967
  1. the upfront spending makes sure that the miners have an incentive to stay honest and follow the rules in order to receive a block reward and transaction fees.
    2.Its not just one block which has to be changed, its every subsequent block and new added block in order to make sure that the link between the block still works.
  2. by increasing / decreasing the difficulty of finding the target number. Target number is low when the number of miners is too high.
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#3968

  1. Its important that miners spend money on electricity while mining, so that they have an inherent cost to mining, it is against their best interests to be dishonest as it will cost them lots of money in electricity to be dishonest.

  2. Every block is based on the information in the block before it, so when a block needs to be changed, ever block after it in the chain needs to be changed as well. This is all very time consuming and costly, all the while other miners are continuing to mine new blocks and earn rewards.

  3. The network regulates mining difficulty through the proof of work. The difficulty of discovering the nonce is relative to how many miners there are trying to mine new blocks. The more miners the higher the difficulty, the less miners the lower the difficulty.

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#3969
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    A: So they have an incentive to mine as efficiently as possible and to incentivise for a reward after spending money.
  2. Why would it be very difficult for someone to go back change a previously added block?
    A: because it would have a cascading effect invalidating every block after it.
  3. How does the network regulate mining difficulty?
    A: It adjusts the difficulty higher or lower depending on the number of miners.
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#3970

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    Its important to have minors spend money so that they follow the rules in order to win the block so that they can recoup their expenses and make a profit. With the expense, they might not have the incentive to be honest.

  2. Why would it be very difficult for someone to go back change a previously added block?
    It would take a lot of electricity, money and many many many years to be able to guess the nonce on each block that has to get altered because of a change made on a single block. All new blocks added after the change would have to be changed as well while minors would be adding new blocks every 10 minutes.

  3. How does the network regulate mining difficulty?
    The difficulty is based on how many minors are in the network. The greater the number of minors the higher the difficulty will be. If there are a lower amount of minors then the difficulty level will also be lower.

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#3971
  1. Becuase if not, chances are high that they play against the rules and only mine for their own fortune
  2. Because as soon as he changes the block, he would have to change every other block afterward, which takes a lot of time and energy/Money. While he tries to change every other block , there are already new ones created probably at the same speed… so its nearly impossible to keep up.
  3. With the help of an set target. The more miners -> the lower the target -> and the harder it gets to find the nonce.
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#3972

  1. Miners become more incentivised to mine more efficiently when they have to cover electricity costs… it is also in their best interests to potentially make a profit once they’ve mitigated their electric costs.

  2. Once you go back and change a previously added block, it changes the whole hash, meaning the following blocks become invalid, and the puzzle solving starts again.

  3. The network increases the target number when there is less mining, making the difficulty level low. When the network is loaded with miners, the network reduces the target number, making the difficulty harder.

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#3973

  1. It is important because if miners do not spend money on electricity while mining, they will not be able to secure data about transactions which in turn will not let them get rewarded to add a block which in turn will not make them get rewarded with incentives.

  2. It is very diificult because to change previously added blocks, you will also have to change newly added blocks in turn which makes the whole transactions invalid. It will need a humungous amount of energy which can costhundreds of billions if not triliions of dollars to succeed in such which makes no sense because miners would rather be incentivized by agreeing in consensus and making a new block with valid transactions.

  3. The network regulates mining diificulty depending on the amount of nodes competing in adding a block at a time.

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#3974
  1. It is important that miners spend electricity because by doing so , they keep themselves incentivized to be honest , to keep the network secure.
  2. Trying to go back for changing a previous block is not worthy because you need a lot of computing power and time and in you loose the chance to create the next block and to be rewarded for it .
    3.The more miners are competing the lower is the target and more difficult to solve .
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#3975
  1. It is important to make sure miners spend money on electricity while mining because that is their incentive to solve the puzzle and make their money back and earn more money with the traction fee
  2. It would be very difficult to go back and change a previously added block because all the links between the blocks going forward would be broken and have to be re-mined which would take a long time and a lot of money. So it is not in their interest to do this.
  3. The network regulates mining difficulty by adjusting the target. If their a lot of miners, then the target is lower making it more difficult versus if their are less miners mining the target is set higher and easier to accomplish.
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#3976
  1. Why is it important to make sure that miners spend money (on electricity) while mining?Incentive them
  2. Why would it be very difficult for someone to go back change a previously added block?
    Cause whatever he changes will have repurcussions for the future.
  3. How does the network regulate mining difficulty?
    Higher the difficulty
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#3977
  1. it is important miners spend money while mining due to the incentives structured in P.O.W, miners have invested in form of electricity and they would be at a loss if they do not stick to the rules.
  2. it is difficult to alter an added block as all traction’s are based on content in current and previous blocks as all blocks are linked, once a block is altered all links between blocks will be broken as the hash (digital fingerprint) differs this will make a block invalid, re-mining is nearly mathematically impossible as the mining process would have to start again and other miners would have carried on mining (POW) creating more links in the blockchain.
  3. The network regulates mining difficulty by changing the hash target level depending on how many miners are on the network.
    e.g low targets levels creates higher difficulty probability as it is harder/ time consuming to work out nonce and hash with low targets levels.
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