Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#4500
  1. Because this is the way that we can make sure that they are following the rules.
  2. Because the puzzel is basedby the previous block and the links between them will be broken.
  3. Target is low when the difficulty is high.
1 Like
#4501
  1. When they have spent money they are incentivized to earn back their money. This is only possible if they play by the rules. If they try to cheat, the consensus will reject the block they try to add and the miners wastes the money spent on electricity for nothing.
  2. Because when you change data in a previously added block you have to remine that block and the blocks that follow that, what takes a lot of time. In the mean time other miners are still adding more blocks which you have to mine as well. you will get so far behind that its practically impossible. This is because only the longest chain of blocks gets accepted on the blockchain.
  3. mining difficulty is regulated basted on the amount of mining power. So when not a lot of miners are active the target is relatively more easy, so it’s more attractive for miners to start mining again. This incentive also makes sure the network will be protected at all time. The other way around is when a lot of miners are active the target gets increasingly harder, so it’s less attractive to keep mining.
1 Like
#4502

It is important that miners have an electrical expense because of the incentives it keeps miners honest and profitable.

It is difficult to go back and change a previous block because it changes all the outputs of the previous and post blocks

the protocol changes to lower and raise the difficulty the target

1 Like
#4503

  1. It creates an incentive for miners to play by the rules. They all pay first, and will only be rewarded if the new block appended is following the rules. Break the rules and you lose even more than you already spent.

  2. It’s difficult because the longest blockchain is accepted by the network. Which means that if you change something, you would need to re-mine all of the blocks following the change in the blockchain + all the blocks that are continously being mined. To be able to do this, you need more processing power in a single computer than the entire network of miners. Theoretically possible with Quants, but the reward would most likely be more if you followed the rules.

  3. It regulates the probabiltity of getting a hash lower than the target, based on how many miners there are. More miners=lower target, which lowers the probability and vice versa with less miners.

1 Like
#4504
  1. To keep the network alive with PoW.
  2. Blocks are immutable, if a previously added block changes it corrupts the hashing algorithm from that block forward. You would have to remine all the blocks which would take thousands of years.
  3. The higher amount of miners, the lower the target hash and the higher the difficulty of solving the nonce.
1 Like
#4505

This will disincentivize miners from intentionally generating incorrect or harmful blocks to the blockchain because doing so will cost them so it’s more beneficial to generate correct blocks because you make up the loss of electricity.

Because doing so will break all other blocks after the changed block so to het back into the blockchain one would have to re-mine the whole blockchain

Through the block target

1 Like
#4506

The difficulty of mining Bitcoin is programmed to rise or fall depending on the number of miners competing to mine the next block. When there are more miners competing to find the next block, the speed at which blocks are mined increases, which in turn triggers the blockchain to make them harder to solve and maintain a consistent block addition rate to the blockchain of about one every ten minutes and vice versa.

1 Like
#4507
  1. so they have some expenses and are by those incentivized to mine to recover those expenses and earn block rewards and transaction fees on top of that
  2. because he would also have to change - remine all other blocks added to the blockchain after that, plus new blocks are constantly added to the blockchain, so he would not be able to catch up, not to mention costs for doing that, etc.
  3. by determining a target number, which is calculated every 2016 blocks (actually 2015 blocks is taken into account, 2016th is left out by bug in a core code of Satoshi Nakamoto, yeah, no one is perfect:P), this happens approx. every 14 days, lower target corresponds in more difficult mining
1 Like
#4508
  1. So they can secure the network and mine blocks.
  2. If you change previous blocks data then all the other blocks hash would change and be invalid.
  3. If more people are mining then its harder to guess the nonce to create the block.
1 Like
#4509

By spending money the miners are incentives

By changing any data in the previous blocks you would invalidate all the following blocks

The more Hash rate there is the more difficult to mine

1 Like
#4510
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    So the miners are involved in the process by their investment, with that miners have incentives to do the work by the rules.
  2. Why would it be very difficult for someone to go back change a previously added block?
    The entire chain of blocks that lead to the first block in chain would be changed.
  3. How does the network regulate mining difficulty?
    Mining difficulty is regulated by setting the target value, that sets the max vaslue for hash number.
1 Like
#4511

  1. It needs to cost miners actual money to mine so that any fraudulent blocks would be insanely expensive to produce and thus a waste of money

  2. Once the previous block is changed, that will change the hash for that block and thus the next and the next and so on and someone would have to re-mine all of those blocks

  3. Based on the current speed of new blocks being added the network sets the target hash at a lower number to slow the network down or a higher number to speed it up

1 Like
#4512

1.Why is it important to make sure that miners spend money (on electricity) while mining?
If miners wants to get incentives they have to spend money on electricity and equipments. This will help network to grow . More and more miners will join the network to get incentives for mining blocks. As miners spend more money on electricity and equipment hash rate will keep on increasing this means they have to do more calculations to guess the hash below the difficulty target to add blocks. This will increase the demand of bitcoin which will eventually in long term increase the price of bitcoin.

  1. Why would it be very difficult for someone to go back change a previously added block?
    We get a blocks hash by executing previous block hash , hash of all transaction in the block and nonce. A block has the hash of previous block or we can say address of previous block. So if anyone changes some transaction in previous block and try to mine it again then link to all the forward blocks will be broken and he will need to mine all the forward blocks. This is practically not possible because he will need a lot of equipments and electricity to do that and as the network is also growing continuously his requirement for equipments and electricity will go on increasing. So instead of changing some transaction in previous block he will be better incentivized by playing by the rules and mining new blocks.

  2. How does the network regulate mining difficulty?
    Difficulty level depends on network growth if more and more people join the network the difficulty level will increase.
    As bitcoin one block mines in 10 min. In every two week or after 2016 blocks the network calculates the average time of all the blocks mined . If the average comes below 10 min then network automatically increases the difficulty level or else if average is more than 10 min then difficulty level of the network is decreased. This is the beauty of bitcoin network that it regulates itself , there is no central organization that regulates bitcoin network.

1 Like
#4513

  1. They will incentives the miners to play by the rules, so they can earn money instead of losing money on energie.

  2. When you change something in a block, the hash changes and therefore the cryptographic puzzle (= connection between blocks) will be broken. To recreate the link you have to guess the nonce and after that all other puzzles of the blocks that follows, because every hash changes. This is therefore impossible!

  3. The more miners, the lower the target is and therefore more difficult to guess. Because the chance that your hash is lower than the target is less likely.

1 Like
#4514

  1. It is important Because otherwise, miners would not have anything stopping them to not play by the rules. this way, they are more incentivized to earn money as they are already spending some to mine.

  2. Because if they did so, the hash of the following blocks would be changed, breaking the links between blocks on the blockchain and having the miners redo the Pow mathematical operations to restablish the links, which would be time and money consuming.

  3. The more mining that is taking place, the higher the diffuculty will be, thus making the target or threshold smaller, and more difficult to guess. When mining difficulty goes down, the threshold will be greater and easier to guess

1 Like
#4515
  1. Miners need to prove that they spent a lot on electricity so that hey are incentivized to earn the reward for solving the PoW. The reward has to be worth what they spend on the mining or no one would do it and the network would fail.
  2. If you change one digit in a previous block, the hashes of that and every block after it would change and therefore the blockchain would be broken. You would have to be able to change it and rewrite every block after it on every node before new blocks were created and that’s not possible.
  3. The more space a transaction takes on a block, the higher the fees. Also, inflation makes it more difficult as less and less coins are released, the math gets more difficult.
1 Like
#4516

The difficulty of mining Bitcoin depend on the number of miners competing to mine the next block. When there are more miners competing to find the next block, the speed at which blocks are mined increases, which in turn triggers the blockchain to make them harder to solve and maintain a consistent block addition rate to the blockchain of about one every ten minutes and vice versa.

#4517

  1. So they have an intention to mine to get rewarded as they spend resources on electricity and need the incentive of getting rewarded by mining blocks and a share of the transaction fees on the network to pay for it and also make profits. It is a business. The more electricity miners spent on the network the bigger the hashrate/hash power will be and so the more secure the network too.

  2. Because they would need to remine that particular block first, which was mined (like all blocks on the network) having the hash of the previous block as reference. They would then have to mine all the subsequent blocks after it until the end of the chain for the changes to eventually be accepted on the network as the network will always accept the longest chain. All this whilst new blocks are being mined and added to such chain.

  3. It is based on the hashrate available on the network. The higher the hashrate the lower the hash target of a block is and so the harder it is to mine such block. The lower the hashrate the higher the hash target is and so the easier it is for that block to be mined.

1 Like
#4518

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    this way they are incentived to get rewarded while mining because they also have expenses. also hash rate increases that way and that increases the networks’ security

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

since if something is changed in a previous block the hashes of that block and the following ones would change as well because they are connected --> for changes to be accepted they would have to change eveery subsequent block accordingly. allthewhile new blocks are constantly being miend

  1. How does the network regulate mining difficulty?

it is harder to mine a block the lower the hash target is because that implies a high hashrate --> so mining difficulty is based arouund the hashrate on the network

1 Like
#4519

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

It’s a so far proven way to discourage miners from trying to break the rules [POW] Proof Of Work.
It intensivies miners to play by the rules. Otherwise they will end up spending a lot of energy and money try to gain some profit, which simply won’t be worth it.

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

Because if you somehow even manage to make the slightest change, then you have changed all blocks. This would break the block links.
In the end you would have to re-mine all blocks. It just won’t work :confused:

3. How does the network regulate mining difficulty?

The nonce regulates the difficulty of the hashing.
The target number is purpusly made low, this makes guessing the nonce very difficult.
The more miners the lower the target number and the difficulty goes up.
The fewer miners and the difficulty goes down.
The block time is 10 minutes for bitcoins.

1 Like