Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#4199
  1. To incentivize honest mining to get rewards to cover costs + profit.
  2. It would take enormous amount of energy compared to mining new blocks because they would need to re-mine all blocks from the change.
  3. It sets a target based on number of miners and blockchain status/length.
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#4200

1.) Itā€™s important miners follow the rules to recieve compensation
2.) Once you chagne anything on a block, you would also have to go back and change previous blocks. Takes too long to do
3.) More miners on the network, the more difficult it will be to Hash and find the target

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#4201

  1. Basically it ensures that miners have a strong financial incentive to recoup the amount of electrical power that they have consumed and paid for (i.e. invested in) as part of solving the cryptographic puzzle that will lead to them being eligible to claim block rewards and associated fees in the shortest possible time. As part of claiming the prize for a given block, miners are thereby incentivised to assure the integrity of the block chain network and the immutability of the transaction records therein.

  2. The cost of re-solving cryptographic puzzles from the first broken block link forwards to the current block would be enormous (increasing exponentially the further back the modified block is) involving massive amount of hashing power and extraordinary time periods. It would be highly unlikely that anyone could catch up to the current block after having to rebuild the chain of blocks.

  3. A target hash number is set such that a block hash (i.e. block fingerprint) must not exceed it. The target number is low when the the difficulty is high.

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#4202

1 To show Proof of Work, secure the network, Insure the integrity of the miners
2 If one block is modifies or deleted, it changes the hash of that block and all blocks forward in the chain
3 The more connected nodes and miners, the greater the hashing power thus increasing the difficulty in solving the nonces.

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#4203
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

It is a way for the miners to show proof of work. Miners need to be incentivized and so they have to show proof of work.

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

Because if one block is changed all the other blocks will have to change too. Every new block is created with the content of the current block and the previous blocks. So changing one block would mean changing all the remaining blocks.

  1. How does the network regulate mining difficulty?

The target is lowered, and many miners guessing the nonce difficult.

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#4204

1.BItcoin work on POW which means They have used electricity to verify transection and solve the Puzzle .since many minners are working so whoever having more computer power can solve fast

2.Because of has function,if Previous has being chage all new will also need to change which is not possible,
3.if minners are less target will be high while if more minners are working taget will be less and gussing the nonce

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#4205

  1. Bitcoin mining works on incentives, where miners who play by the rules are incentivized to do so. Bitcoin works in a way where itā€™s more profitable to play by the rules and secure the network. Those who donā€™t play by the rules actually lose money, as they have to pay high electricity costs. They have skin in the game so it will be in their best interest to play by the rules and be incentivized to do so.

  2. The hash of a new block is created using the transactions within the block, as well as the hash of the previous block. If a rogue miner tries to change a previous block, the hash changes, therefore breaking the links of any transactions that came after. The rogue miner will then have the near impossible task to create new blocks in a bid to catch up to the miners who play by the rules.

  3. The more miners there are, the harder the difficulty to mine bitcoin. This difficulty is adjusted by lowering the target number a minerā€™s hash must be. Miners must guess a nonce that will create a hash. This hash must be below the target value. The lower this target value is, the harder the difficulty.

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#4206

1 In order to solve cryprograf. puzzle and they have to play by the rules in order to make money if the thy donā€™t they lose money.

2 because if one link will be broken all the links will be broken eventually and blocks need to be remine again its practically impossible

3 by lowering the target

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#4207
  1. Why is it important to make sure that miners spend money (on electricity) while mining? This is to keep all miners honest and follow the rules. and makes a fair playing field for all to collect the rewards.
  2. Why would it be very difficult for someone to go back change a previously added block? So if one hash get changed by modifying any blocks all the blocks following will need to be remined, this would be almost impossible to get all blocks up to date.
  3. How does the network regulate mining difficulty? the more miners that join the mempool the difficulty increases and lowers the target for guessing the nonce.
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#4208

  1. Thatā€™s the concept of proof of work, spending energy to find the next block

  2. Because he needs a lot of hashing power to change the blocks which means changing all the next blocks, meanwhile miners would have placed new blocks and the network chooses the longest chain

  3. The network regulates mining difficulty according to how many miners are competing with each other, more miners means a higher hashing power meaning a higher difficulty so a lower target

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#4209
  1. Making sure miners spend money gives them incentive to follow the rules.
  2. If someone changed a previously added block, all subsequent links would be broken. In order to get the changed block included in the blockchain, the miner would have to solve all the puzzles of the subsequent blocks, which is impossible to with one computer.
  3. The difficulty of the puzzle is proportional to hash rate. The more people who are mining, the more difficult it is to solve the puzzle.
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#4210

Q.1.Why is it important to make sure that miners spend money (on electricity) while mining?
A.2. It is an incentive for miners to recover their cost, then miners are paid
transactions fees + block rewards

Q.2.Why would it be very difficult for someone to go back change a previously added block?
A.2. All links would be broken upstream between hashes in the block chain,
since {current hash = (previous hash(es) + current transactions + current nonce)}

Q.3.How does the network regulate mining difficulty?
A.3. By miners guessing the nonce below the target:
lower target = higher mining difficulty
higher target = lower mining diff1culty

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#4211
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

The more money miners spend on electricity the more invested they are in the network and to follow the rules. If they break the rules, then they will lose money already invested (for electricity used).

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

Because the altered block and all the blocks that come after would have to be re-mined which would take an enormous amount of processing power (money).

  1. How does the network regulate mining difficulty?

The network makes the hash algorithm harder by adjusting the target lower. The ideal is 1 block every 10 minutes. If it is less than 10 minutes, then the algorithm is made harder (target is made lower) and vice versa.

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#4212
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

Because it incentivizes the miners to be honest and work towards achieving the block reward and transaction fee incentives in order to recoup their electricity expenses and make some profit.

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

Because with each block not only relying on its individual hash including its transaction list and the nonce guessed correctly. The current hashed block also relies on the previous block hash and also the link of the previous hashed block is included as well.

By changing anything on a previous block the hashes will change and the links would be broken resulting in you having to not only correctly rehash the changed block, you would have to mine the flowing blocks in order to catch up resulting in needing excessive computation power which would make more sense to progress the blockchain forward rather than try and change previous data.

  1. How does the network regulate mining difficulty?

By having the mining network set in a way whereby the miner has to guess the nonce constantly against a lower target which is a set target (hash) that is based on the difficulty of the network, meaning the more miners on the network the lower the target resulting in it being more difficult to guess the nonce which causes the miners having to expend more electricity to solve the complex cryptographic puzzle which in turn incentivizes the miner to achieve the rewards. Keeping the block intervals at 10 minutes per block mined.

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#4213

1.Because it incentivizes miners to solve the cryptographic puzzle by paying upfront for the electricity spent mining and getting paid in block rewards and TXN fees.

  1. Making a change to any block earlier in the chain requires re-mining not just the block with the change, but all of the blocks that come after. This is why itā€™s extremely difficult to manipulate blockchain technology.

  2. More miners = speed increase at which blocks are mined on the network therefore difficulty going up.

Fewer miners = less computing power contribution to solving blocks on the network therefore mining difficulty going down.

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#4214
  1. By having to pay for electricity it incentivizes miners to follow the rules and be honest so they can receive block rewards and transaction fees.
  2. It is difficult for someone to change previously added blocks because the links between the blocks are a puzzle that require more computing as difficulty increases. The network chooses the longest chain so you would need to first change the previous block and mine faster than the original chain.
  3. Mining difficulty is regulated by guessing the nonce and comparing their hash to the target. The more miners on the network the lower the target and more difficult to guess the nonce.
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#4215

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 that miners are incentivised to solve the block right and keep the integrity right.
  1. Why would it be very difficult for someone to go back change a previously added block?
  • It would require extreme amount of computerpower/electricity. More than 50% of all Hash rate. And if so, you would earn more, by just mining by the rules.
  1. How does the network regulate mining difficulty?
    the more miners on the network. The less the number of the resulting hash, have to be. and it is always regulated equal to total miners on the network.
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#4216

The miners are the ones responsible of securing the network, and a way to motivate miners to act Ethically while appending blocks is by making an investment in advance (In this scenario, by spending electricity), so they will want to get even at least. In the blockchain all the blocks are based on the previous Hash and Tx, if you want to change a Tx you will have to redo that block, and to re-mine all the coming blocks with the new Hash. And assuming that no new Tx are been sent in ALL the blockchain. Another thing to consider is the Mining difficulty, If there are a lot of miners, Mining, the difficulty will go up and so the Nonce will have to go down. And if there are little miners difficulty will go down which will lead to the increase in the Nonce. Although I donĀ“t yet understand how is the Nonce defined.

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#4217

1. Why is it important to make sure that miners spend money (on electricity) while mining?
It is important that miners spend money via using electricity on mining so that it becomes difficult and counterproductive to reverse transactions. If theoretically speaking miners had to spend no electricity/money to mine a block then they could just go back and reverse a transaction and mine all blocks from that block on forward at no cost to them. This would actually create an incentive structure to cheat in my opinion, because there is no cost to you as a miner to do so.

2. Why would it be very difficult for someone to go back change a previously added block?
It would be difficult to reverse a transaction or multiple transactions in previously mined block because it would mean the bad actors would need to re-mine all blocks from that block on forward including new ones constantly entering the network.
This is because each blocks generated hash is based upon not only the transaction data contained within it but also on the hash of the preceding mined block. Thus, altering a block of transactions would mean that its hash would change and the hash of the next block block would change and so on and so forth.

3. How does the network regulate mining difficulty?
The network regulates mining difficulty by counting the numbers of mining nodes currently on the network. The goal is to add one block every ten minutes . Therefore, if the numbers of miners decreases and blocks are being added slowly the mining difficulty decreases and if the numbers of miners increases such that more blocks are being added quickly the mining difficulty increases.

The difficulty of mining is adjusted via the target number that is set for miners to calculate a hash that is less than or equal to.

The lower the target number means less numbers that are less than or equal to this target (increased difficulty) and the higher the target number means the more numbers are captured thatā€™re less than or equal to it (decreased difficulty).

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#4218

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    -Because they are incentivized to follow the rules

  2. Why would it be very difficult for someone to go back change a previously added block?
    -Because any changes will break the blockchain and they would have to mine faster than the other blocks.

  3. How does the network regulate mining difficulty?
    -The more miners there are, the lower the target which means higher difficulty.

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