Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#4540

  1. They are getting incentivised and also it is pow and to secure blockchain and not to cheat blockchain

  2. If we change a single block then all the other blocks needed to changes and need to guess the nounce

3)By the number of miners on network make it difficult if we have more miners

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#4541
  1. Incentivises miners to recoup losses spent on electricity by gaining inflation and transaction fees. Furthermore it is also important to stop fraudulent actions as it will be rejected by the other nodes on the network resulting in realised losses.
  2. Changing the blocks will result in having to change the link between the blocks which is the puzzle, furthermore the network takes the longest chain and therefore you would need to change retrospective blocks and links and also catch up making it the longest chain. All this will result in mammoth costs in electricity making it un economical to do.
  3. Network activity - the more miners there are the harder it is to guess the nonce as the target is relatively lower.
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#4542

There is a real cost to the miner, which makes them more responsible.

Because the blocks are connected in multiple compatible ways, so it’s not possible to change a single block.

We adjust the difficulty by competition among miners.

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#4543
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

In order to assure accuracy and to provide incentive to do the same. It does not make financial sense for someone to tamper with a block, spend electricity to find the nonce, only to have it rejected. If no power use was needed, it may alter this calculus for some.

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

It would require someone to make changes, tie all the blocks back together again, then catch up. Simply not probable. Couple this with spending a great deal of time and electricity, it likely is not even attempted. Miners are incentivized to deliver truthful proposed new blocks.

  1. How does the network regulate mining difficulty?

By adjusting the target hash. The current blocks transactions, the previously created block, and the guessed nonce are used to create a new hash. This new hash must be lower than the target hash. The lower the target hash is to zero, the less likely the newly guessed hash will be less than the target.

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#4544

Homework on Mining and Proof of Work - Questions

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

By making miners spend money on electricity while mining, we ensure that the miners are incentivised to follow the rules and not be dishonest to the network. If a miner tries to double spend or chooses wrong transactions, he will not be rewarded with the block rewards or the transaction fees. Meaning that if miners are honest, they make money, if they are dishonest, they lose money.

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

It would be difficult for someone to go back and change a previously added block because the puzzle/equation needed to be solved to create a new block, is based around the information on previous blocks. The links that connect the blocks are based on the information on previous blocks. Let’s say someone wanted to change a transaction in a block, in order to do that he would have to break the links of all blocks that have come after it because the links between these blocks have been created using the information of the block that came before it.

In order for you to do that, you would need to have a bigger hash rate than the entire community of miners. The hash rate determines the difficulty of the puzzle. So if you were to change a transaction on an old block, all the blocks that have come after it, would have to be re-mined, and meanwhile, other people would already be mining more blocks, the network always chooses the longest chain.

  1. How does the network regulate mining difficulty?

Mining difficulty is proportional to the networks hash rate, which is a measure of users spending electricity, money, and processing power actively mining. Meaning that the difficulty is increased by the amount of miners that join the network, the more miners, the more difficult it is to mine.

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#4545
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    To incentivate the miners to play by the rules, they want to recover for their expense in electricity and make some profit then they have to follow the rules, if not their block would be ignored and they won’t get the rewards
  2. Why would it be very difficult for someone to go back change a previously added block?

Changing anything will broke all the follower links, therefore they would be obligated to remine all the next block and catch up with the chain in order to replace the original chain, and that it is a big cost, and near impossible to do so. there is a chance if you have at least the 51% of the hash rate of the network
3. How does the network regulate mining difficulty?

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#4546
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    so that they will be incentivized to recoup their money expenditure + reward of mined new btc and tx fees
  2. Why would it be very difficult for someone to go back change a previously added block?
    because the cryptographic puzzle solution ‘hash’ from a previous block will chain every single hash that is created past that point. and that means that if someone wants to have the block validated again and accepted to the block chain, it will have to do all the work over again, being cost prohibitive.
  3. How does the network regulate mining difficulty?
    has mining gets more difficult, i.e. more miners, the acceptable range of values of a new becomes smaller, lowering chances of guess it, meaning less probability of winning the lottery
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#4547

what happens to answer number 3?

#4548
  1. This way they won’t try to cheat, because they have to spend a lot of money on POW, and their block will be rejected anyway (when trying to cheat).
  2. He would have had to make a new POW for that block and for all subsequent blocks that were built at that time. This is theoretically possible, but not practically executable.
  3. When there are more miners, the difficulty of mining increases by reducing the target below which the number they guessed - the nonce - is to be found.
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#4549
  1. By spending money the miners have incentives to follow the rules since they are invested in the mining process.
  2. If anything is changed in the previous block it would break the link to the next and the following blocks.
  3. As there are more miners the difficulty to guess the nonce is increased by lowering the target.
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#4550

  • Why is it important to make sure that miners spend money (on electricity) while mining?
    it is important so we can make sure they won’t break the rules, because if they do they will loose all the money and energy spent on electricity.

  • Why would it be very difficult for someone to go back change a previously added block?
    Is would be very difficult because they would have to re-mine all of the blocks that have been appended after that one. While you try to do that, hundreds of incentivized miners are still producing new blocks so you would have to catch up and that would take many many years and resources.

  • How does the network regulate mining difficulty?
    the more people / computers are mining, the lower the target number is and the more difficult it becomes for someone to find the solution and the more electricity they have to spend.

QUESTION
why if I just put number 1, it won’t work? if it is lower than the target anyway?

#4551

Using 1 wouldn’t be a correct hash number of the block so it would be invalid.

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#4552
  1. It is important for that miners spend money on electricity when mining so that they are incentivized to follow the rules and be honest to keep the network safe because if they break protocol and are dishonest they lose money.
  2. It would be very difficult for someone to go back and change a previously added block because in doing so they would alter the data which would break all the links in that chain and the miner would then have to resolve all the puzzles to relink the blocks which would cost millions of dollars and take thousands of years. Plus it would make that chain shorter and less desirable by the network because it always chooses the longest chain because they have the most PoW.
  3. The network regulates mining difficulty by changing the value of the target to try to keep blocks ten minutes apart. The target is determined by the number of miners more miners equals lower more difficult target to hit. Miners have to guess the nonce within that target to get their block accepted.
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#4553

  1. When miners spend money on mining they are less likely to engage in malevolent behavior.

  2. Going back to change a previous block is difficult because you would need to rewrite the block in question and all other following blocks until you catch up to the current block.

  3. THe network regulates mining difficulty because computers get faster all the time and the amount of miners currently in the network changes all the time. If the difficulty is too high then the blocks will take too long to process if its too easy block time would be too short.

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#4554
  1. If the miner has something at stake in the process it will make unaffordable to break the rules
  2. Changing a block implies rehashing that block and all of the subsequents.
  3. By adjusting the value of the target in accordance to the number of miners.
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#4555

  1. The expense of electricity necessary in the production to mine bitcoin serves as a negative incentive for those miners who wish to cheat the system—the cost of catching up to the blockchain’s current state would be considerable.

  2. The process of recreating new hashes for blocks—previous, current and subsequent—is made very difficult by the necessary cross-referencing of the hashes to each other, not to mention the time and energy expended to catch up to the present block generation.

  3. As more mining computers join the network, the lower the target falls. The lower the target falls, the more difficult it is to achieve the proper result of the nonce, the transaction list and the previous hash, hashed together, and for it (the result) to be low enough of the target, and thereby solve the puzzle.

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#4556
  1. The type of power for hashing requires a certain amount and power of electricity
  2. If a previous block is changed by a person, that person would have to play catch up with everyone continuously solving new blocks
  3. When the target is lower, the difficulty is higher when trying to guess a nonce
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#4557
  1. It is important in order to make miners responsable of their behaviour so if the play dirty they will lose they inversion made to mine the block.
    2.Because once you chancge a past block it doesnt match with the blocks that come after so it would be necessary to remine all the blocks and its impossible that person catches out the legit miners.
    3.Every 2 weeks the difficulty is revised and after that the network increases or decreases it by changing the range of the target number, if its lower it will be more difficult to find out the solution and viceversa.
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#4558
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    user it to spend to solve problem the fastest get reward and paid upfront
  2. Why would it be very difficult for someone to go back change a previously added block?
    if you have the power to do so it be better for you to work with the system then againist
  3. How does the network regulate mining difficulty?
    changing the transaction hash required to solve the puzzle making harder.
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#4559

  1. to make sure they wont insert a bad transaction otherwise the lose money after not getting rewarded.

  2. its difficult because any change in a previous block will invalidate future blocks that are based off transactions from the said previous block.

  3. difficulty lowers when there are less miners to enable more miners get in, difficulty also increases as more miners get into the network

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