Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#445
  • Why is it important to make sure that miners spend money (on electricity) while mining?
    because miner need incentive to compensate the losses.
  • Why would it be very difficult for someone to go back change a previously added block?
    every blockchain transaction has to change if it would to go back, and it is invalid to do so and it might take thousand of years.
  • How does the network regulate mining difficulty?
    mining difficulty is proportional to the network’s hash rate.
2 Likes
#446

1. Why is it important to make sure that miners spend money (on electricity) while mining?
2. Why would it be very difficult for someone to go back change a previously added block?
3. How does the network regulate mining difficulty?

1.Spending money- paying up front- means they have more incentives to follow the rules than to break them (miners don’t want to have their block rejected by the network, but instead receive block rewards and transactions fees).

2.To change a previously added block would break the link to the next block, since the hash of the last is based on the transactions in the former. And then new proofs of work, up to the present, must me done.

3.The network regulate mining difficulty by using targets. By making the nonce harder to guess-the target are lowered- the difficulty increases (and vice versa).

2 Likes
#447
  1. By putting up “collateral” they are incentivised to play by the rules.
  2. one would need to coordinate a 51% attack and run it for longer then the block they wanted changed
    3.The net work adjust the difficulty so that the block time keeps an average of 10 minutes to solve.
2 Likes
#448

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    Miners spend money on electricity while mining to ensure they work for their incentives to compensate their losses as well as make some profits by playing by the rules too.

  2. Why would it be very difficult for someone to go back change a previously added block?
    Because any change in one block will break the links in other chains.

  3. How does the network regulate mining difficulty?
    The target is reduced when there are more miners mining at the same time. That means, the more the miners, the lower the target.

2 Likes
#449

[quote=“ivan, post:1, topic:8439, full:true”]
Homework on Mining and Proof of Work - Questions

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

Bitcoin mining is the backbone of the Bitcoin network and so the role of the miners is to secure the network and to process every Bitcoin transaction. Through a consensus mechanism which is a fancy way of describing the mathematical rules all miners agrees on, is known as Proof of Work (POW). POW is a term of the rules dictating which miner gets to update transactions on the Bitcoin blockchain. It basically means that in order for a miner to gain the right to update the next block of transactions, it needs to provide Proof to Work by solving hard challenge/puzzle that can be easily verified by the Bitcoin network.

As an Incentive for the miner to follow rules, this mechanism makes sure that only miners who have invested in computational power with high electricity consumption in solving the puzzle will earn the right to update the ledger of transactions and get rewarded with block reward and TX fees.

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

Miners role is to secure the Bitcoin network by making it difficult to attack, alter or stop. The more miners that mine, the more the secure the network. However the only way to reverse Bitcoin transactions is to have more than 51% of the network hash power like possibly a large enough computer power in a collaborating mining pool or quantum computers of the future (this has not happened as yet). Distributed hash power spread among many different miners keeps Bitcoin secure and safe with its integrity intact.

To answer the question, If someone goes back to a mined block and tries to change any single data from the block transaction, all the following chained block’s hash will be changed as well as the hash of the tampered block. That is because each mined block apart from genesis/first block is cryptographically interlinked to the previous and the following block’s hash.

This means any change of data in one block will subsequently change the block’s hash and all the following mined and chained blocks, and therefore the link of the original tampered block to the rest of the blocks will be invalid and rejected on the whole chain of blocks, hence immutability of the blockchain.

3) How does the network regulate mining difficulty?

In simple terms, a hash power can be defined as the speed at which a given mining machine operates. As mining involves finding blocks through complex computations to solve mathematical puzzles. The mining machine has to make thousands or even millions of guesses per second to find the right answer to solve the block.

In other words, to effectively mine a block, the miner must hash the block’s nonce (computer generated random number) that it’s below or equal to the “target.” The target changes with every change in difficulty (the lower the target the higher the difficulty).

To arrive at a given target hash, the miner would have repeated the process of guessing the nonce many many times before arriving to the right Nonce. Each nonce begins with zero and is increased every time to get the necessary hash target. Given that the varying chances of the nonces, the chances of hitting a given hash target is very low. That is why the miner, has to make numerous tries by varying the nonce. Therefore the number of attempts that miner makes per second is known as the hash rate or hash power.

2 Likes
#450
  1. So they are incentive to go after the reward and staying honest at the same time
  2. You have to re-mine all previous blocks as they would be invalid on top of mining new existing blocks
  3. The more miners the more difficult the more hash power increases causing the difficulty to go up in guessing the nonce
2 Likes
#451
  1. It is important because it keeps them incentivised.
  2. It would be difficult or impossible to go back and change a previous block because that would make the previous block change and that would make the previous block change and so forth, ja.
  3. It regulates it by making it proportional to the networks hash rate. The more people mining more difficult to guess the nonce, the less people mining the easier to guess the nonce.
1 Like
#452
  1. So miners don’t edit the block, it would not be cost efficient to do so. because of the cost of electricity and time involved to do so. And as an incentive to keep mining to pay the bills mainly their cost to mine.
  2. They would need 51% of the network to change a block and any future blocks that have been accepted, an eternal game of catch up.
  3. when there is a lot of miners mining the target is low , when there are fewer miners the target is higher.
2 Likes
#453
  1. Miners need to spend money so they have some skin in the game. They are incentivized to solve the puzzle and get their money back and more. If they are bad actors they will only lose money.
  2. It is difficult to go back and change a block because you would re-hash all the block transactions and the links between blocks. The bad actor would never catch back up to the currently mined block.
    3.Targets are lowered to increase difficulty. A lower target means there are fewer correct answers to the puzzle when hashing the Previous Hash/Transactions/Nonce.
2 Likes
#454

  1. It is important for miners to spend money on electricity because if they have to spend money they are more incentivized to play by the rules of the network than to try and cheat. This is due to the fact that if they cheat they expose themselves to the risk of not getting any of the incentives offered by the network.

  2. It would be difficult to go back and change a previously added block because all blocks are based off of the hash of the previous block. This would mean that all of the blocks after the one changed would then have to be re-mined, which would more than likely take many human lifetimes (not to mention a gargantuan sum of money and electricity), and they would likely not ever be able to catch up to the new blocks continuing to be mined by the other miners on the network.

  3. The network regulates mining difficulty by changing the target value that miners are trying to find a hash below. When the target is low the difficulty goes up. When the target is high the difficulty is less, since there are then more possible numbers for a miner to find that are below the target.

2 Likes
#455

Thank you for clarification! great!

2 Likes
#456
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    It is important for miners to spend money on electricity while mining because they need to be incentivize to secure the network.
  2. Why would it be very difficult for someone to go back change a previously added block?
    If a transaction is changed in the previous block, the blocks moving forward would have to all be hashed to catch up to the current network. The longest chain is the accepted network.
  3. How does the network regulate mining difficulty?
    Difficulty increases when more miners are on the network and decreased when less miners are on the network.
2 Likes
#457
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

To ensure that they play by the rules otherwise they would end up with a rejected block and a massive electricity bill hence it’s more profitable for them to do what they are supposed to do.

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

Because by doing so his version of the block-chain would differ from all the rest thus not getting through consensus unless he remines all the following blocks whilst the rest of the world keeps on adding. That’s why it would be theoretically possible but infeasible in the practice.

  1. How does the network regulate mining difficulty?

By lowering the threshold of the the target making it so more difficult for miners to get a hash lower than the new implemented target. This threshold is lowered in relation to the amount of miners working at the same time

2 Likes
#458

  1. It incentivizes them to follow the rules, thus ensuring the security of the network.

  2. It would take an unrealistic amount of time and energy to revise a previous block, let alone future blocks.

  3. Through the manipulation of the target value as dictated by the code. Hash goes up, target goes down, increasing difficulty.

2 Likes
#459
  1. They are incentivized through expenditure of energy mining to maximize profit.
  2. Each hash in each block is connected and would need to be re-mined which would take too long. They would then also have to catch up with the current blocked being mined.
  3. The nonce is harder to guess when there are to many miners and easier when there are less,
2 Likes
#460
  1. Why is it important to make sure that miners spend money (on electricity) while mining? incentives for them to make more bitcoin
  2. Why would it be very difficult for someone to go back change a previously added block? too much work and time for them to do, impossible
  3. How does the network regulate mining difficulty? lowering target will make it more difficult
2 Likes
#461

  1. It ensures that they have some “skin in the game,” which creates an incentive for them to follow the rules in order to recoup their losses and make a profit.

  2. It would be difficult because they would have to re-mine that block and every block that came after, which would require too much power (electricity) for one miner.

  3. The more miners there are, the lower the target for the nonce becomes, which increases mining difficulty.

1 Like
#462

  1. Miners need to make the money back and profits…therefore they will keep mining keeping the network up and running and this forces them to follow the rules.

  2. They would have to change all the previous block cause it would change the hash and when they are done they would have to catchup the the blocks that have been mined. This process wont be effective ,you wont make money and you will need insane hardware and electricity.

  3. Hash difficulty is increased or decreased based on the amount of miners. The target gets lowered or raised and the nonce gets harder or easier to guess.

2 Likes
#463
  1. So that they lose something if they cheat.
  2. Because all blocks are cryptograhpically linked to eah other. All blocks after the one which is changed need to be caclulated as well.
  3. The nonce needs be such a number so that the hash is below a certain “target” number. The lower the target is, the harder mining will be.
2 Likes
#464

1.Manipulating the network would be disproportionately more expensive than mining according to the rules. Miners are incentivized with earning more money following the rules thus having profit and covering expenses.
2. Because there is a dependency between the Blocks. Each block contains the hash of the previous block.
3. It is regulated with the Target (the target is low when the difficulty is high). The difficulty increases when the number of miners increase.

2 Likes