Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#3978

  1. So that they are committed to earning money, acting according to the rules of the game, recovering their expenses.

  2. Because this would imply the need to re-mine the block and all subsequent ones, as an information that serves as input to a hash function has been changed.

  3. Stipulating higher or lower values ​​as a target to be reached in hash functions. This will change according to the greater or lesser computational power of the network.

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#3979

1.The miners should expend money on electricity as an investment from their side to discourage them from malicious use of the network.
2.To go back and change a previous block or to try to brake the integrity of the network, would take a lot of time and electricity to redefine all the interconnected blocks with is very difficult.
3. The higher the hash rate (calculations performed per second) the lower the Target (a random number that the network creates based on previous stablished blocks). The more Bitcoin is mined the more difficult it becomes to continue mining.

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#3980

1/ gotta work for a buck
2/ changing a tx in a previous block will change that blocks hash, breaking the chain since consecutive hash blocks are dependent on it. So these hashes would require calculation in addition to blocks currently being appended…TDH
3/ Calculation of hash based on previous hash block, current tx’s and guessing the nonce such that this hash is lower than a target, the height of which is determined by the level of competition.

I have a question in addition then: Is the nonce really an actual pre-existing number prior solution of the low-enough hash or is it simply arbitrarily assigned once a certain nonce enables a low enough hash to be calculated? I’m presuming the latter because the former would imply an exception to the one-way expectation of hash calculation would it not? Cheers!

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#3981
  1. So that they have to play by the rules or else they get a net loss. They get a net loss because they don’t get any fee money or inflation money (BR), but they still spend money on electricity and the computer resources to mine.
  2. Because they’d have to remine every other block after it which is physically impossible.
  3. The more people mine, the less the target, which means that the range in which a hash would be valid for a block is lower.
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#3982

My Answers:

  1. It shows miners are more willing to play by the rules set in the POW algorithm and help contribute to the blockchain. By doing that they will be incentivised with block rewards and transaction fees, if they don’t play by the rules their block will be rejected from the network and all the money spent (electricity), used to guess the nonce, will be wasted.

  2. The data in the block they would want to change is based on the cryptographic puzzle miners need to solve in order to amend the block to the blockchain. If the data is changed they would have to re-mine all subsequent blocks, including the block they have changed. This will take too much time and computing power, not to forget the current ledger will continue to grow and the network always chooses the longest POW (chain).

  3. Each node will look at the last 2016 blocks in the blockchain and calculate the average time spent mining a block. BTC sticks to 10 minutes per block and if the average time is below 10 minutes the difficulty will increase and vice versa. This allows the network to self regulate the mining target.

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#3983

  1. Nothing worthwhile is free. This expense of electricity incentivizes miners to work as productively, honestly and as efficiently as possible to create acceptable blocks.

  2. Changing a previously added block breaks the chain of subsequent blocks, requiring more mining and hashing to re-create an acceptable chain. More work and expense through mining is required anytime data in a previously added/accepted block is changed.

  3. The more miners there are in the network, the lower the target number becomes by a narrowing of the range of random numbers that would be accepted into the network. The lower that target becomes, the more difficult it is to isolate an acceptable number. It is like trying to find a tiny range somewhere on a line that starts from zero and extends to infinity!

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#3984
  1. If miners have to spend money to utilise electricity, then they are more likely to play by the rules because in order to be financially rewarded.
  2. If any alterations are made to previous blocks, the All harshes on the block change and break the link between the blocks.
  3. Network regulations is made difficult by lowering the target for the nonce.
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#3985

a nonce is just an arbitrary number that number is guessed by miners. So definitely this number is not a pre-existing number. It just should meet the requirements that mean the hash should be lower than the target.

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#3986

  1. To make sure that they play by the rules. If they don’t, they are spending electricity without result and thus they are losing money.

  2. The hacker would have to remine all the other blocks coming after that one + the blocks being mined while he’s doing that, all by himself. This would take thousands of years. Only with 51% of the hashrate, he would be able to accomplish this.

  3. When there are more miners, the target is lower. So to find a nonce that gives a hash smaller than this target is more difficult, thus mining is more difficult.

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#3987
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    It’s important because it ensures that the miners follow the PoW algorithm and obey the rules.
  2. Why would it be very difficult for someone to go back change a previously added block?
    If data in previous blocks would be changed it would force miners to re-mine every next block therefore making the whole process worthless.
  3. How does the network regulate mining difficulty?
    The higher the hash rate the lower the target.
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#3988
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    To discourage them from breaking the rules.
  2. Why would it be very difficult for someone to go back change a previously added block?
    Because they’ll have to resolve the puzzle, re-hash, all broken blocks starting from current edited block and on.
  3. How does the network regulate mining difficulty?
    Through target threshold.
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#3989
  1. To incetivize that they’re following the rules by them losing money if they don’t
  2. Because the blocks are all related to each other and if you change one you have to change them all.
  3. It regulates so that if a block takes longer than 10 minutes to be mined it makes the puzzle easier and vice versa.
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#3990
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    That is how they are incentivized to make back the money they spend on electricity through transaction fees and block rewards.
  2. Why would it be very difficult for someone to go back change a previously added block?
    They would break all the links in the current chain, and would have to resolve each puzzle to create new hashes based on the new data, which would take thousands of years.
  3. How does the network regulate mining difficulty?
    As the hash rate goes up, the target number goes lower, making it more difficult to solve the cryptographic puzzle.
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#3991

First there are costs and that gives the start of a competition te get back money by incentives; tx fees and the blockreward.You need this competition to create a decentralized system where you don’t trust persons/organisations but math/physics

If you change some text in a block, everything changes; the hash/the previous hash/links. the repair of these broken links needs you to solve very difficult puzzles which will take thousands of year and after that solution you have to overtake the new created block. Impossible in practice

the more miners, the more difficult to solve the puzzle

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#3992
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

So that the cost of using the electricity to change a block and remine will serve as a punishment for not following the rules, thereby, making it more cost effective to follow the rules.

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

Changing a previous block will change the hash of the proceeding blocks, causing the need for all proceeding blocks to be remined. By the time someone would be able to remine all of the blocks, the legit miners will have added many more blocks to the legit chain. It will be practically impossible for the fraudulent miner to catch up.

  1. How does the network regulate mining difficulty?

The target range decreases the more miners in the network, causing the puzzle to become more difficult to solve. If miners leave the network, the target range increases making it easier to solve the puzzle, which incentivizes more miners to join the network.

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#3993
  1. To incentivize them to verify a block within the rules so their efforts will be appended to the blockchain and they can recoup their expenses along with some profit.
  2. Once a block is appended to the chain, if the information in that block is every changed than the parameters of the hash that verified that specific block will change. Which then changes all subsequent connections to other blocks because each connection is based of the hashes of the current and previous blocks with their state at the time. Forcing the offender to re hash all old blockchains connected to the block in question and also any current blocks verified within the time frame of fixing the previous blocks.
  3. The goals is for block verification every 10 minutes, so depending on how quickly minors are able to verify blocks, the puzzle to guess the nounce difficulty will be increased or decreased
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#3994

it1. Why is it important to make sure that miners spend money (on electricity) while mining?

This guarantees bitcoin creation is rare. It simulates the time and energy mining for gold.

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

Because hash codes are chained with each block including the hash of the previous block.

  1. How does the network regulate mining difficulty?

Based on the overall hash rate of the entire system, it increases the difficulty of the puzzle that needs to be solved.

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#3995
  1. Its a kind of upfront payement to incentive them to mine correct block to get rewards.
  2. Because he/she would have to re-mine all the chain and even if theorically its doable, pratically its impossible regarding the amount of time AND computational power (hash power) required.
  3. By setting a target. As much miners there is as low the target is.
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#3996

-to secure the network, since they are incentivized by getting the transactions fees and block rewards.
-would need a lot of computer power (51% hash power). Any change would change the other hashes.
-the more people participating in the network the difficulty increases, since there is more competition trying to guess the nonce. the diffculty increases by lowering the target of the nonce

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#3997

  1. It is important to make miners spend money on mining so that it incentivizes them to play by the rules. It disincentives them from cheating or changing information in the block retroactively.

  2. It would be difficult to change a block retroactively because they would break the links between that block and the next blocks and force them to re-mine all of the new blocks before any others could be added. It is impossible to do in a practical sense.

  3. The network increases mining difficulty by lowering the target number a miner needs to guess in order to add the next block. Lower number, means it has a lower probability of being guessed as quickly and thus forces more energy to solve.

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