Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#425

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

To make sure miners play the honest game card…In this configuration, miners loose money if they try to cheat the network but on the other side, if they spend accordingly, they will gain money as a reward for their good work .

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

It would take too much time, too much energy and money trying to change a single block meaning miner would need to change all ashing calculations because every link that connects block between them would be broken too…too complicated, impossible … plus, miners would keep adding new blocks, so it is unfeasible for the bad guys…

How does the network regulate mining difficulty?

The aim of the game is for the miners to solve a PUZZLE called “NONCE” which represents the target number limit to reach (this nonce have to be a lower value than the target itself) . The target is LOW when the difficulty is high (when more miners are in the game for the reward) …The lower the target number is, the more difficult it gets to solve the NONCE on a minimum time

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#426

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    Because of the incentives. They wanna earn that money back with some profit if you follow protocol. If you don’t it wil cost you money(electricity) because your block won’t be accepted and therefore dropped. All resources spend for nothing

  2. Why would it be very difficult for someone to go back change a previously added block?
    Because the hashoutput would be different and he will have to change every copy in the
    ledger and that is almost not possible.

  3. How does the network regulate mining difficulty?
    By lowering the target of the nonce if there are a lot of miners

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#427

1. Why is it important to make sure that miners spend money (on electricity) while mining?
Its important to make them pay before hand because they are then incentivised
to abide by the rules of the network. Becouse they wont get their block accepted in the network if it contains any faulty information.

2. Why would it be very difficult for someone to go back change a previously added block?
It will be difficult because all the block are linked together. The hash of one block is based on the hash the previous block. If any information is changed in any block the link will be broken as the hash of the block will change.

3. How does the network regulate mining difficulty?
The mining difficulty is regulated based on much hashrate there is the network and not but the number of computers, but by the power of those computers.

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#428

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    A. It incentivizes miners to follow the rules of mining.

  2. Why would it be very difficult for someone to go back change a previously added block?
    A. Any change to a previous block would break the link between all of the following blocks. It would take thousands of years and an enormous amount of money to re-mind all of the following blocks plus the new blocks that other Miners have created.

  3. How does the network regulate mining difficulty?
    A. Difficulty is determined by the number of miners on the network. The lower the Target the harder it is to guess the nonce and hash the block.

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#429
  1. if miners are not investing any of their own money in the process then this gives no incentive. By forcing iners to spend money they then have money in the game and will be aiming for the rewards.
  2. the block contains the transactions, reference and a hash to the previous block which is important for the security. so if any changes were made then this would break the link to the next block
  3. By lowering the target hash would most likely increase the difficulty and visa versa
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#430
  1. The block reward is only granted if there is proof that the miner spent $ mining, hence proof of work. The fact that miners must spend a lot in electricity secures the network. It becomes infeasible to falsify a prior transactions, because the blocks would all have to be re-mined which would be cost prohibitive.
  2. All the mining for previous blocks would have to be re-mined back to where the change is made, including new blocks that are being created while old blocks are being re-mined. It would be cost prohibitive.
  3. Mining difficulty is regulated by raising or lowering the target hash value. The lower the target, the more difficult it is to find a nonce value that will result in a low enough hash value and vice versa.
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#431
  1. it keeps the miners honest.
  2. you would need to do a 51% attack (control more than 50% of miners)…At present if several mining pools in China decided or were forced to act in unison, they could achieve this.
  3. Difficulty is a function of the number of miners. The higher the worldwide hashrate, the more difficult the mining.
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#432
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    Because it incentivizes them to work for the network, and disincentivizes them from attacking the networking.
  2. Why would it be very difficult for someone to go back to change a previously added block?
    Because they would have to rehash every block from that point moving forward.
  3. How does the network regulate mining difficulty?
    It adjusts so it should take about ten minutes per block.
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#433

The miners are incentivized to follow the rules of the mining process since they are already invested in the blockchain.

Because the hash’s would change in every block after that and would have to be re-mined to catch up to the nodes to notify of the changes made.

The difficulty to guess the nonce is increased by lowering the target as more miners are added to the network.

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#434

Why is it important to make sure that miners spend money (on electricity) while mining?
A: It is important because this incentivises miners to play by the rules. If they do not play by the rules they lose the money they invested (in electricity)

Why would it be very difficult for someone to go back change a previously added block?
A: Because you have to remine that block and all the blocks that follow (until the last one). This is extremely expensive and time consuming.

How does the network regulate mining difficulty?
A: The more miners there are the higher the difficulty to solve the puzzle (nonce) of a block

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#435
  1. In order to lose money if they don’t follow the rules and the protocol while trying to append the blockchain with a new block.
  2. Because if something is changed in a previous block, all hashes of the forthcoming blocks will be changed, all the links between the blocks will be broken.
  3. The more miners are in the network, the more difficult is to guess the nonce.
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#436

  1. It is the so called proof of work. By spending electricity miners are forced to spend money which gives them an incentive to follow the rules which will lead them to earn bitcoins in return.

  2. One variable in creating a new block is the use of the hash function of the previous block. Therefore if any information is changed anywhere in the past blocks, automatically it is detected and all the blocks down the line from that tempered block will become invalid. In order for this dishonest person to continue with his/her scam it will mean that they will need to re-mine the tempered block plus all the blocks that follow. This would take a very long time and it would be very inefficient for the perpetrator and therefore a deterrent for any criminal activity.

  3. The hash of a new block requires three variables. They are:
    A) Previews block hash.
    B) Hash of current transactions.
    C) A guess of a number called NONCE
    The outcome is a new hash. This hash gets compared to another number called TARGET. This TARGET can be a number anywhere from zero to infinity. Now the hashing output of this new block must be smaller than this TARGET. As the mining difficulty increases (i.e. more miners) this TARGET becomes smaller. By becoming smaller it means that the possible amount of numbers increases and invirably increases the probability of the output of the hash of the new block to find the wrong target making it work harder by guessing the correct NONCE more and more until the output is smaller than the target.

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#437

You confused the nonce as target. It’s not the same.
Miners construct a block, the hash of that block needs to be below target hash (needs to have a certain amount of leading zeros) in order to have a block hash low enough to be a valid block, you need to add some random data (a number called the nonce) hash it again and check if the block hash is now below target. Keep repeating this procedure until you find a random number that finally makes your hash below target to broadcast this successfully mined block

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#438
  1. By spending a lot of money on electricity, they are more at risk of losing money if they are kicked out of the network or they are prevented from closing a block, as their reward (which is the main reason why they are mining and is composed of both the Block Reward and Transaction Fees) for finding the nonce will not be received. This happens because miners are basically paying upfront by spending electricity, in return for the chance of being rewarded.
  2. Because it would mean that the nonce that was found as a solution for the puzzle related to that block would no longer be correct. This would imply that the link between that block and the following one, based on such nonce, would be broken. But this would also impact on the following block, and the one after that, for every block building the Blockchain after the one that has been modified. To be sure that the change would be accepted within the blockchain, it would be needed to modify and validate all the following blocks at once by finding the nonce for every of them, but this would require so much computer power that it is considered unfeasible. The only possible way to achieve it without such effort, it’s by owning at least 51% of the computing power spent on the mining process at any given time.
  3. Mining difficulty is determined basing on the computing power spent on the mining process, so that the process of block-generation is completed approximately every 10 minutes. This means that if computing power increases so much that every new block is produced in considerably less time than 10 minutes, then the difficulty will increase to even things out.
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#439

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

The Miners are invested with the Electricity consumption to create CPU, They become incentivized, meaning that its in their best interest to follow protocol in order to profit.

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

It would be counterproductive, one hash change means all previous hash changes, to go back to change all hash and then catch up wile new blocks are mined is not probable.

3.How does the network regulate mining difficulty?

More mining equals more hash power.
Nounce become difficult to guess as it lowers the target, Nounce need to be below the target. aprox 10 min apart.

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#440

  1. Requiring miners to spend money while mining ensures that the network stays secure. This happens because miners don’t get paid when incorrect or invalid data is tried to add to the blockchain. Thus if the miner is spending money to “mine” the block they want to ensure they get paid for the block.

  2. Each blocks hash is based off the previous blocks hash, thus in order to change a previous transaction someone would have to make the change and then start rehashing every block after it until it catches up to the current block being mined.

  3. Mining difficulty is regulated by setting a target number that the mined hash must be less than. The lower the target the higher the difficulty the higher the target the lower the difficulty.

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#441

  1. So they can get incentives for following the rules

  2. Is basically impossible in order to do that you will need to have more than 51% of the hashing power and one you chance a block you will need to chance all the other one’s blocks.

  3. By the number of miners mining.

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#442

1 - so they invest in the risk of getting a big reward
2 - because they would have to mathematically solve the almost impossible puzzle and becuase of that difficulty and lack of incentive - security is provided
3 - by demanding consensus of the puzzle solutions

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#443

  1. By making miners spend money on electricity you a creating the perfect balance of incentives and disincentives. If a miner plays by the rules they are rewarded with a profit via block rewards and transaction fees. If a miner is dishonest and tries to change a transaction in a block he will be penalized with a financial loss

  2. If you change a block you will break the chain of all the blocks that were mined after it. To fix the breaks in the chain you would need to remine all subsequent blocks too. Remining those blocks would require a significant amount of computer power and electricity costs which would make it economically unfeasible.

  3. If there are alot of miners it will increase the difficulty. If miners leave the difficulty goes down to entice new miners to join the network

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#444

  1. Bitcoin miners are incentivised so they play by the rules to secure the blockchain.

  2. It is extremely difficult as each block contains its own unique hash along with the hash of the block before it.

3 If more Bitcoin miners are on the network the hashrate increases.which makes finding new block incentives difficult , and with less miners the hashrate will decrease.

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