Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#4359

1- Cost ensures the integrity of the network by making it to costly for a bad player to try and corrupt the blockchain.
2- It would be difficult to change a previous block due to the fact it would then be necessary to the re-mine the following blocks and on top of that catch up with newly mined blocks becoming exponentially difficult as well as costly
3- the network regulates mining difficulty by increasing difficulty thus lowering the target when the number of miner increases. In turn this decreases the probability of finding the correct nonce.

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#4360
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
  • This is important as it provides incentive to mine the next block. Miners ony get paid once the correct Hash / nonce is found so this provides incentive.
  1. Why would it be very difficult for someone to go back change a previously added block?
  • In order to change a previous block all subsequent blocks must be remined to determine a new hash that is lower than the target
  1. How does the network regulate mining difficulty?
  • Mining difficulty is regulated by the target for the next block. The target is expressed in the number zeros in the beginning of the hash
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#4361

1.- Because that makes them willing to mine the reward plus txn fees, and so they need to be good actors
2.- Because then that individual will need to re-mine every block till where the others are mining, and they will continue to do so probably that individual will never catch rest of miners.
3.- The more miners operating will increase the hashing power on the network. When it increases, nonce decreases, making it more difficult to find for the miners. Same when its reversed, the less hashing power, the high the nonce thus will be easier to find it.

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#4362

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    Spending money on electricity during mining helps keep the integrity of the network. If you are spending money, then you are incentivized to do it correctly so that you actually earn the block reward & Tx fees. If you are trying to double spend, then you will most likely not get your block appended AND lose out on the money spent for electricity.

  2. Why would it be very difficult for someone to go back change a previously added block?
    It would be very difficult, because if you change a previously added block, you will also have to re-mine every block afterwards AND catch up to produce the longest chain available.

  3. How does the network regulate mining difficulty?
    The network regulates mining difficulty by the amount of time it takes to find a solution. The network aims to keep it at around 10 minutes to solve the puzzle.

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#4363
  1. The incentive of miners is to make money. By spending a lot of electricity they spend a lot of money. They only get the reward for txs and mining when they play by the rules. Otherwise their block gets rejected and they sitting on their electricity-costs.
  2. To connect a new block to the chain, the miner has to solve a puzzle. The result of the puzzle is the hash of the new block. The hash consists of the txs of the new block and also on the previous hash. So, if something in a previous block is changed, its hash changes and all the chain from that point on falls apart.
  3. The more miners are mining, the more dificult it gets to resolve the puzzle. For that, the miner has to find a number lower than the target. The more diffcult, the lower the target.
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#4364
  1. It is important so That they will have incentive to follow the rules to earn the reward and earn that money back and then some. The miner with the longest PoW receives the reward.
  2. It would be difficult because then the current block would also have to change and the miner would have to solve a new set of algorithms and have consensus which would be impossible.
  3. The lower the target number the higher then difficulty. The difficulty level is based on the number of miners. The more miners the higher the difficulty.
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#4365

  1. This is what we call Proof of Work. It shows they are working on solving the “puzzle”. They also are incentivised to work honestly and follow the rules of the network.

  2. To change a previous transaction in a past block, will change the hash for that block + the hash of all future links between blocks, which would become invalidated. To change all of those, and still catch up with the new blocks being created faster than other miners that didn’t go back in time would be impossible. It would take too long.

  3. The more miners there are, the lower the target of the hash becomes, i.e. the more difficult the puzzle to solve is. Miners need to repeat again and again their guess of a hash that is under the target, by changing the nonce (guessing randomly).

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#4366

Why is it important to make sure that miners spend money (on electricity) while mining?
Gives them an incentive to follow the rules and be rewarded.
Why would it be very difficult for someone to go back change a previously added block?
It would change all blocks and you could never catch up.
How does the network regulate mining difficulty?
The more people who mine the more difficult it is to mine, or is more costly at least.

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#4367

  1. In order to make sure that the miners are being honest and follow the rules spending money on electricity assures that process or else if they are not being honest and following rules then $$ is being lost!

  2. Once a previous block is changed, it changes the hash for that block and creates a snowball effect with all the other blocks. Thus, making it impossible to catch up fixing the solutions.

  3. As there are many miners competing, utilizing the target will make it that much difficult to guess the nonce of a block.

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#4368

  1. to ensure that the miners play by the rules as if they tried to cheat, they are excluded from the blockchain and lose a lot of money on electricity too… not money efficient at all

  2. the hash would change in each block and none of the transactions would not make any sense

  3. the more miners mine, the harder it is to find the nonce as the target value would get very low hence harder to guess the number

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#4369
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

This is important to sustain the network, since finding the nonce will give them ownership if the block

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

Because it would change the hash result from the function and give up a new nonce from a previous block, hence the computer wont be with the most updated version of the blockchain.

  1. How does the network regulate mining difficulty?

The higher the amount of computers the highest the amount of hash and would become more difficult to get the block.

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#4370

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

For proof of work, if they are dishonest they will lose money, if they are honest they will get incentives

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

Because it will alter the hash of the block which will impact all future blocks

How does the network regulate mining difficulty?

When more people mine the Difficulty will be high which means the target is lower

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#4371

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    Miners are incentivized to respect the bitcoin protocol rules and keep the network safe.
    The incentive is constructed in such a way that a miner must use electricity to solve the cryptographic puzzle (guess the nonce) and see if the hash of the block that was mined (the result of hashing the block’s transactions, the previous block hash, and the nonce) is lower than the target so that they get the reward (the block reward and the transaction fees from all the block’s transactions)

  2. Why would it be very difficult for someone to go back change a previously added block?
    If someone changes a previously added block, all the links after this block will break and the network nodes will see that the blockchain is invalid.
    In order for the blockchain to make sense again, the miner must, by him/herself solve the NEW puzzles (they have to guess all the nonces) and recreate the broken links.
    The miner must remine the block that was changed, all blocks after that, and catch up and remine the blocks that the network mined in the meantime.
    Depending on the network’s has rate (difficulty), that could take thousands of years.

  3. How does the network regulate mining difficulty?
    The mining difficulty is directly linked to how many miners are mining in the network.
    When there are a lot of miners mining, the difficulty is high and the target low (the network is very safe).
    When a few miners are mining, the difficulty is low and the target high (the network is vulnerable).
    At the same time, blocks need to be produced every ~ 10 minutes. This block time is set to this value because it is the calculated time needed for the network to be synced (everyone to receive the new block, everyone to validate it, and everyone to be ready for the next block).
    So the mining difficulty is adjusted so that the blocks can be produced every 10 minutes taking into account the network conditions (how many miners are mining)

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#4372

Homework on Mining and Proof of Work - Questions

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    Concept based on Proof of Work to solve a cryptographic “puzzle”. Once its solved then the “winner” get new BTC + Tx fees.

  2. Why would it be very difficult for someone to go back change a previously added block?
    To do any change in previous block means that it has to be mined again but not only the current one but all the next new blocks (because of changes in hashes). This is practically impossible to do.

  3. How does the network regulate mining difficulty?
    The difficulty is adjusted every 2 weeks to keep average mined block in approx. 10min. interval.

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#4373
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

It encourages them to follow the “rules” aka the proof of work protocol correctly to get the fees and block reward, instead of breaking the rules (which would result in no rewards and electricity wasted)

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

Because all other blocks succeeding it would be invalidated (due to changed hash) and the one changing a previous block would need to solve the cryptographic puzzles in the succeeding blocks (and any other blocks added in that time by other miners). Would be practically impossible.

  1. How does the network regulate mining difficulty?

It regulates it by lowering or elevating the target depending on how many miners are mining.

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#4374
  1. to make it not worthwhile to try & trick the system since it will take xtreme amounts of hash to do so equallying mASSive loss in money
  2. since all hashes are based on the previous block hash it means he will have to remine all of the blocks to incorporate his=very expensive &not worthwhile to do so
  3. by elevating mining target when noone mines and the opposite when it gets common causing a supply demand ratio that is always sustainable
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#4375
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
  • It incentivices the Miners to stay honest. If there was no cost to mining, there would be little downside in trying to corrupt the blockchain. Because the mining costs money, the Miners need to recoup their expenses by getting the block reward + fees. Also, it makes the blockchain grounded in physical reality.
  1. Why would it be very difficult for someone to go back change a previously added block?
  • You would have to remine all the subsequent blocks and on top of that outpace the rest of the network since the “longest chain” is truth in a Proof of Work blockchain.
  1. How does the network regulate mining difficulty?
  • The difficulty is adjusted by lowering the acceptable max hash number, in other words increasing the number of leading zeros required on the hash. This is adjusted to keep the mining time to an average of 10 mins.
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#4376
  1. So that they have to follow the rules in order to be rewarded accordingly.
  2. Any changes will have a domino effect on all other blocks so it can be seen that change was done.
  3. Makes it so that not too many blocks are solved in a short time or too few blocks are solved. Around 10 minutes per a block is where it’s regulated.
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#4377
  1. Since Bitcoin is a PoW so miners need to spend money in order to get block rewards. This is important as it secures the blockchain.
    2.Since they will have to remine previous and new block before someone else mines only new block. Longest chain always wins.
  2. More miner nodes, difficulty increases (lower target) and vice versa.
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#4378
  1. by spending money, the miners have incentives to follow the rules.
  2. any change will change the hash output of that block which will affect other blocks.
  3. increase in miners will increase the hashing power. so the difficulty to guess the nine is increased by lowering the target.
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