Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#4460

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    By spending money, we make sure miners have incentive to follow the rules and receive rewards doing the right thing since they are invested in the mining process.

  2. Why would it be very difficult for someone to go back change a previously added block?
    Anything that is changed from a previous block invalidates the link to the next and following blocks plus, they would be trying to remne the previous blocks and would require to spend alot of money or hash power to solve the previous ones and now they would be behind the other miners.

  3. How does the network regulate mining difficulty?
    It changes so that each block is mined every 10 minutes, the difficulty to guess the nonce is increased by lowering the target number.

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#4461
  1. to keep the cost reasonable.
  2. keeping the pace of reshaping the blocks after makes no sense to the miner
  3. the network regulates the nonce dificultyof the hashing. more miners more difficult and the opposite.
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#4462

  1. Incentives. The system is set up to reward proper usage of the blockchain.

  2. All blocks would have a different hash and then have to catch up to the other blocks ahead of it.

  3. The more miners or hash power on the blockchain, the lower the target will get for completion. Making it more difficult.

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#4463
  1. Spending money on electricity prior to adding to the blockchain ensures the the miners are incentivised to respect the integrity and rules of the blockchain. If they don’t do that and consensus rejects their block then the miners will be out of pocket.
  2. If a block is changed retrospectively this would break the chain and the miner would have to go and rehash every block up until present. The sheer volume of work - electricity and computer power make this impossible and financially unviable.
  3. The more miners in the network the lower the target number therefore the more difficulty in guessing the nonce. The protocol of the blockchain self regulates the difficulty
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#4464

Why is it important to make sure that miners spend money (on electricity) while mining?
Because it is how to ensure that all transactions are correct (no double spend or any errors, everything follow the rule)
As long as the miner do following rule and honest, they will get money.

This is all the meaning of “Proof of work”, consensus algorithm in the bitcoin that use for ensure that everyone is honest
and all transaction that included in the bitcoin blockchain are correct.
And mining is about secure network (ensure transaction cannot be censored) and incentive (minor make money).

During miner take transaction from the mempool and construct their own block to append with the blockchain.
They need to solve the cryptographic puzzle and only the fastest miner that successfully connecting their block to the blockchain.
He will get block reward (bitcoin inflation) and transaction fee.

Why would it be very difficult for someone to go back change a previously added block?
Because the cryptographic puzzle is based on the content of previous block and previous link.
The difficulty of this puzzle is porpotional to the hashrate of the network.If someone go back change a previously added block,it will make all links broken.
All the nodes will see that this blockchain invalid.It doensn’t makesense and the way to valid again.
It need to solve new puzzle based on new content that the transaction in that block was changed to re-create all blocks again and also need to catch up to the new block while everyone else working hard to create the new block.
It may take time thousand of year.The network all always choose the longest chain which mean the most proof of work.

How does the network regulate mining difficulty?
The target low when the difficulty is high.The winning miner need to find hash number below this target.The difficulty level adjust follow the number of miners who try to win that hash for create a new block.So, it will be more difficult for miners to guess the nounce.
They need to guess more time until get the correct nounce.They need to use more power to mining for guessing.

Each block has hash, basically it is digital fingerprint of the block.The hash of the current block based on all the transaction that happend to that block and previous hash (from previous block)
and random number called “nounce”.

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#4465
  1. Why is it important to make sure that miners spend money (on electricity) while mining? It provides incentive to be honest.
  2. Why would it be very difficult for someone to go back change a previously added block? To change a previous block would break the block. It would also be impossible to catch up after an interference because blocks continue to be added to the block.
  3. How does the network regulate mining difficulty? When the target is low it increases difficulty and makes it difficult for miners to match a lower target.
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#4466

  1. It keeps them incentivized to receive block rewards and transaction fees. Basically they are paying lots of money in electricity to mine so they will want follow the proper protocol and have their investment pay off.

  2. Because all other blocks that come after will have to be mined again. Also all other miners would be adding more blocks and you would fall further behind. You would need an extreme amount of computer power to outcompete the rest of the miners. (Practically impossible)

  3. Based of the amount of miners on the network the target in which they have to guess the right hash becomes lower. This in turn decreases the chances you will guess or ne under the target number.

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#4467
  1. it incentivizes them to make a profit from their investment
  2. when you change the transaction of a block all blocks previous change, you’ll then have to re-mine all previous blocks and catch up to other miners, requiring more computational power, so you’ll need at least over 51% of the network’s hash rate which is ‘impossible’ in practice
  3. more miners = lower nonce target # = higher difficulty
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#4468
  1. So that they are ensure to respect the blockchain rules, knowing that if they don’t all that money spent on electricity will be wasted
  2. Because if they did, they will break all the chains from that block up to the current block. And would have to re-mine all the blocks again
  3. The network increases the difficulty if there are more miners and does the opposite if there are less
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#4469
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

If miners are forced to spend money they will be more incentived to make money to recoup for their loses.

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

If you changed a previous block then all of the following blocks would have to be remined to make up for the change. All blocks are linked with preceding blocks. So one little change to any preceeding block will change the hash and all future blocks and hashes.

  1. How does the network regulate mining difficulty?

The more people that are mining on the network will lower the target number, therefore making it harder to mine and to solve the puzzle.

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#4470
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
  • so that they are more motivated to follow the rule of mining to recoup their electricity bill & investment on the machine
  1. Why would it be very difficult for someone to go back change a previously added block?
  • because he needs to re-mine the whole chain, at the same time compete with the rest of the network to mine new chain, at the risk that his chain will be abandoned cos the longest chain will be chosen.
  1. How does the network regulate mining difficulty?
    when there too many miners, the hash target will be lower. when there are not many miners, the hash target will be high so that more miners are incentivized to join.
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#4471

  1. To keep out bad actors, Pay to play. Incentives for the miner to mine blocks properly on there dime and then be rewarded for following the rules

  2. Because any change to the previous block would change the block hash signature which the next block hash is based off of so would be rejected

3.It is regulated to keep block times to approx 10 mins

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#4472

How does the network keep the block time approx 10 mins?

#4473

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

    • So that misleading the rules is not rewarded, so that following the rules always yields more. This
      increases the security of the blockchain.

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

    • When you change a block in the past, all links after this block are broken and you have to start mining these blocks again. Because the difficulty of mining is so high, you need so much mining equipment that it is to expensive. In addition, the longest blockchain is seen as truth. So you also have to be able to mine the old blocks very quickly to get the longest chain. In theory you should get 51% of the hash capacity to get this done.

  3. How does the network regulate mining difficulty?

    • The more hashpower there is on the network, the lower the target number becomes and fewer answers are found for the nonce. So the difficulty of the network increases.
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#4474

to incentivize them to make up their losses and gain profit = mine continuously

you cannot change blocks in the chain

target is amended at regular intervals

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#4475

answer 3 should include: target is lowered when there are more miners to make it more challenging to resolve

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#4476

  1. To further entice them to play by the rules (protocols) to receive the financial rewards on mining.

  2. It would be very difficult for someone to go back and change a previously added block because they would have to then provide the proof of work for every consecutive block and chain after that, costing an incredible amount of computing power and electricity to catch up to the end of the chain, without breaking consensus.

  3. Mining difficulty is regulated to keep block times at approx 10 minutes. When there are a lot of miners and therefore a lot of hash power on the network, the target is made to be more difficult (closer to zero), making it harder to find the nonce and receive the block reward. If the hash power is lower because there are less miners in the network then the target is made to be easier to find the nonce (closer to infinity).

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#4477

  1. To produce more guess work at a faster rate to solve the NONCE.

  2. It would break the link and you would have to start afresh in computing new blocks.

  3. The lower the target is, the harder it is to guess the NONCE. The higher the target, the easier it is the guess.

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#4478

Why is it important to make sure that miners spend money (on electricity) while mining?
so they can seen to be invested in the process so can do a good job with the blockchain

Why would it be very difficult for someone to go back change a previously added block?
as it would take a very long time for them to rehash previous blocks, also they will be losing money by using there processing power rehashing rather than making new blocks

How does the network regulate mining difficulty?
by changing the bar of the puzzle to be higher which would make it more difficult and longer for the miners to guess

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#4479
  1. To be incentivize, Its a race they need to spend a lot of electricity while being honest, to become first in the competition, to append their block first in the blockchain.
  2. Because when we change a block the next chain will be broken, and they need to remine it again.
  3. By using target, more miner = lesser target, which is more difficult.
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