Homework on Mining and Proof of Work - Questions

[tonylombardo13]

1). It is important to make sure that miners spend money on electricity while mining to give them incentive. This incentive for them to play by the rules keeps the network secure as well as supporting BTC and the blockchain’s integrity.

Having them spend money on electricity makes sure that they will play by the rules and not go back and change a few transactions for their benefit. This would actually be a detriment to them as then they would have to spend an enormous amount of money and electricity to change all the blocks that have been upended and propagated to the network making it nearly impossible to cheat.

2). As previously stated, it would be very very hard for someone to go back and change a previously added block as that would void all of the blocks that came after that block. This in turn would cause the miner to continue mining new blocks as the hash would change between the blocks.

This would take FOREVER and you alone could not do it against the army of nodes and miners all over the world that are mining and propagating new blocks to the network.

3). Mining difficulty is regulated by the target # for the block. If the target is high, the difficulty is low. If the target is low, the difficulty is high.

[bennytuesday]

Homework on Mining and Proof of Work - Answers

1. Miners powering the network are incentivized to follow consensus.

2. All other blocks will have to be changed as well because each hash block is based on the previous one.

3. The more miners, the lower the target. This makes it difficult to mine.

[Shelby_Ilochonwu]

1. they use it as an incentive to follow the rules. when a miner has spent a lot of money (on electricity), they will want to make up for all the money they lost when they mined that specific block. they want their block to be accepted. and when their block is accepted and they have followed all the rules they get paid by inflation and the transaction fees… so they end up paying for all the electricity they used while still making a profit.
2. because they would have to remine a whole bunch of blocks while other people are at the same time added more block so i would basically be impossible to remine that many blocks and still make a profit, because they would spend so much money (on electricity) that it wouldn’t be worth it to try and change a previous transaction.
3. with a “target” for each specific block. if the “target” is low its much more difficult to hash the block you are trying to mine. when the “target” is high it’s much easier to hash the block you are trying to mine

[stefansimonsson]

1. If the miners spend money mining they have to get it back somehow. In the case of the bitcoin blockchain they will potentially get the block reward and transaction fees of the new block added to the chain. They spend money to earn money.
2. Because that change will change the hash of the block. This will change the next block and so on breaking the chain.
3. If there are many miners mining the target will be low meaning that it is harder to “make” a new block. If there are few miners mining the target will be high meaning it is easier to produce the next block. The hash of the new block must be lower then the target.

[MoonBoy]

1. Why is it important to make sure that miners spend money (on electricity) while mining?
   Answer: In order to secure the underlining network. Hence miners are paying a lot for electricity upfront to solve the cryptographic puzzle trying to guess the correct nonce in order to validate the hash (which is based on previous hash + list of Tx + nonce) with the goal to be financially incentivised once the block has been added to the chain.
2. Why would it be very difficult for someone to go back change a previously added block?
   Answer: If someone would go back in time and make any changes to a previous block it would make all blocks afterwards being invalid and each hash would need to be validated once again while new blocks would constantly also being added. It would be physically just impossible to keep up and financially unprofitable.
3. How does the network regulate mining difficulty?
   Answer: The difficulty of hashing new blocks depends on the number of miners. The more miners hash blocks means the target will be very low and nonce would need be lower than that i.e. difficulty will be very high. The same counts vice versa if there a less miners the difficulty will be lower - hence the target zone bill be bigger.

[Cazuum]

Homework - Mining and PoW

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

Miners use a heap of electricity to mine therefore spending a lot of money paying bills to solve the cryptographic puzzle for block reward plus tx fees, its all about incentives - any dishonesty results in the miner losing money and their block being rejected

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

To amend a previously added block would break the links to all the proceeding blocks - so the amended block needs to be re-hashed as well as all the ones after it …. in theory, do-able - in reality practically impossible

3. How does the network regulate mining difficulty?

The higher the difficulty the lower the target which means the higher amount of miner and visa versa

Cheers

[iequere]

1. It is important so that miners can be made to play by the rules and collectively secure the network. Pending money upfront before they get their rewards ensures that they will always do the right thing that is good for the network.

2. This is because the math behind how a block is mined or created. A new block is a function of of a guessed nonce, the data contained in the block being mined and the hash of the previous linking block on the network. Going back in time to alter an already added block will break the linkage between blocks and would require spending a ton of money on electricity and a lot of time(years) to repair the broken linkages which is not a profitable thing to do. Added to that, the network always choses the longest chain in the network. So, a miner with a broken link in the network will be invalidated.

3. The network mining difficulty is a function of the hash rate at a particular time on the network. The more the hash rate or the more mining activity on the network, the higher the cryptographic difficulty miners must solve to mine a block on the network. This simply means that when there are a lot of people on the network mining, the target below which a guessed nonce is supposed to lie becomes really smaller and hence the difficulty.

[pappas_kellyn]

1. it raises the bar for miners with skin in the game, which disincentivizes fraud
2. all blocks contain the hash from the previous block, which is part of the data entered to generate the hash for that particular block, therefore changing one would have the domino effect of changing every one before and after
3. increase in miners lowers the target number of which the random number generated from inputing a nonce needs to be lower than, thus increasing difficulty

[takeshiCovac]

1. It’s important that miners spend money on electricity to secure the network. Miners have the upfront cost of power needed to try to find the target hash. The miners wont be able to profit unless proper protocol is observed.
2. Since all block hashes are based on previous blocks they will have broken the link. Their representation of their blockchain would be invalid compared to other nodes. It would be cost inefficient to mine all previous nodes.
3. Mining difficulty is based on the amount of miners trying to validate blocks and the amount of time needed to validate blocks.

[JonPag]

1. It is important to spend money in electricity to solve the algorithm or puzzle. When this puzzle is solved their block will be appended to the blockchain. This means block rewards as well as transaction fees can be received.

2. How PoW works is by miners creating new blocks. In order to change a block you would have to 51% of the hashrate to remine the changed block along with all the blocks that this block is connected to. This is very difficult to do as the hashrate is at an insane computational power that one person would not get 51% or if they did it would take years upon years to complete.

3. It will regulate by making a target threshold for the miners to hit in in-order to create the blocks. The more miners the higher the difficulty. The higher the difficulty the lower the threshold target will be. If the puzzle takes longer than 10 minutes the the difficulty will change in order for a new block to be created.

[mperlingeiro]

1. When miners spend money on energy they will have an incentive to recover that money and in addition make a profit.

2. If someone changes a previously mined block they will need computer power to remind the block and the following block which would need impossible computer power and time.

3. The more miners in the network the more difficult it gets to guess the target number. The more difficult the lower the target number.

[jcon84]

1. If miners are spending money they are incentivized to play by the rules and gain rewards!

2. It’s difficult(nearly impossible) to do so based on decrypting the previous transaction, all the while new blocks are forming. Thus making it impossible to catch up.

3. Mining difficulty is based on how many miners are active on the network. The more miners the lower the target, the lower the target the more difficult it is.

[Sergio_LGD]

1. By spending money in energy the miners have incentives to get the block reward and transactions fees since they are invested in the mining process, if they cheat they are penalized by losing the rewards and gets losing money in energy and expenses.

2. If anything is changed in the previous block it would break the link & the hash to the next and the following blocks of the chain furthermore if this chain has already been validated by the network (PoW)

3. As there are more miners the difficulty to guess & hash the nonce is increased by lowering/tightening the target threshold.

[skawal22]

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

During mining, miners has to solve cryptographic puzzle to win the bitcoin as reward. It takes a lot of
hashing power which consume a lot of electricity to solve that puzzle. It is important that the miner
use a lot of electricity so that then sell their bitcoin to foot the bill as well.

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

It will take an impossible amount of hashing power for a particular computer to change a previous block. if someone try to change something in a previous block then it would change the link to the next block and eventually the following block and so on. its pretty much impossible to do that.

How does the network regulate mining difficulty?

If there are more nodes/miners participate in the network then the hashpower increases and the difficulty of the puzzle increases and when the participants are less in number then the difficulty decreases a little bit. More miners means more difficulty of guessing the nonce.

[alp257]

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

• It encourages miners to follow the rules and get rewarded after spending money upfront, otherwise they lose the spent money (on electricity) if they try to alter the chain maliciously.

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

• One needs to remine every succeeding block from where the change was made and also have to catch up with the newly mined blocks which requires a lot of hash power (one needs to provide the majority of hash power of the whole network).

3. How does the network regulate mining difficulty?

• The network accordingly lowers the target number if there are more miners making the probability to guess the right nonce during mining lower.

[mrodiek]

1. Why is it important to make sure that miners spend money (on electricity) while mining?
   By requiring miners to spend money on electricity you are forcing them to have skin in the game, in the form of an upfront financial investment, if they break the rules or attempt to manipulate the blockchain the other miners/nodes will reject their block & they will lose their investment (money spent on electricity) with no reward.

2. Why would it be very difficult for someone to go back change a previously added block?
   Changing an already accepted block would be difficult because the miner would have to redo all of the proof of work from the adjusted block & forward, costing them time and money, all while every other miner is working on blocks ahead, the bad actor would have to play catch up mining blocks, costing them more money in electricty.

3. How does the network regulate mining difficulty?
   Mining difficulty is regulated by the network through network activity & fees. The busier the network (more transactions requesting to be added to the blockchain) the more difficult mining becomes via hashrate, the greater the fees, incentivizing more miners to join the network.

[Sarcasshole]

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

creates “skin in the game” to align incentives with the BTC network.

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

it would require doing the POW for the doctored block and each block thereafter.

3. How does the network regulate mining difficulty?

target nonce which is numerically-inverse correlated to computation on the network. more power > lower target (difficulty increases).

[dnicng]

1. This is to make sure miners follow & play by the rules since they need to get rewards to cover the spent expenses.

2. if anything changed in the previous block the previous hash will changed then it will affect the whole chain since to complete the new hash miners require previous hash in their block.

3. If there are more miners in the network the target will be lowered to increase the difficulty.

[Brad_Burwash]

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

It is important because it incentivizes miners be honest so that they can recoup cost and be rewarded by solving the cryptographic puzzle.

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

It is very difficult because you would need to go back and resolve the changed data which is practically impossible.

3. How does the network regulate mining difficulty?

It regulates mining difficulty by setting the target lower.

[BenF]

1.by making miners spend money on electricity it makes them invested in solving the puzzle for the next block which is their proof of work to be rewarded for their efforts.
2.because changing any TX in any previous blocks it would cause that blocks hash to change therefore breaking the link in all following blocks as they were created using the previous blocks hash.
3.the more miners that are competing in the network causes the hasrate to be higher causing the target hash number to be lower and much more difficult to solve burning more electricity in the process for proof of work.