Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#4640
  1. Skin in the game so to speak. By spending there own money to run electricity, they are incentivised to play by the rules in order to recoup losses.
  2. By changing even a single digit on a block would change the hash and break the link to all blocks after. Each block would have to be re mined and this would be very costly.
    3.By using a hash target number. The target number is made low when there are many miners trying to guess the nonce. If less miners are present, guessing Nonce will be made easier by making target value high.
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#4641

  1. It is important to make sure miners spend money on electricity while mining because the entire process keeps the miners honest and incentivized. Each miner wants to have their block added to the blockchain so that they could collect the reward and transaction fees along with recouping their losses and making a profit. Playing by the rules ensures this.

  2. It would be very difficult for someone to go back and change a previously added block, because of the hash value. The hash value is pretty much a blocks fingerprint it defines not only the make up of that block, but all previous blocks. Changing anything would break the link and effect all blocks previous and future.

  3. The network regulates mining difficulty by adjusting the parameters in which the correct nonce can be guessed. The more miners connected to the network the more difficult to arrive at the correct answer, the less miners the opposite.

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#4642

  1. it incentivizes the miners to play by the rules and get the block rewards (new TXN fees and new BTC mined).

  2. All blocks are linked to each other by the data of the previous block. If anything is changed in one of the previous blocks, the blocks that follow would have to be rehashed, and that would cost a lot of electricity and time. The other miners that are honest would get ahead of the cheating ones.

  3. The more miners there are, the lower the target number is, thus increasing the puzzle solving difficulty and vice versa.

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#4643
  1. That ensures the consensus, because it is their interest to make the money back by being good miners.
  2. You would have to re-mine the whole blockchain, catch up with the existing blockchain. would end up being more expensive.
  3. The more mining power power participates in the network the harder it gets, the more electricity has to be spent create a block
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#4644

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    The electricity is proof of their work mining the coin. This also discourages fraud because it would cost them immense funds to try and cheat.

  2. Why would it be very difficult for someone to go back change a previously added block?
    They would have to change all future blocks as well, and all past blocks before it. They’d have to individually mine each block to get a new hash, which would take thousands of years, and they’d also have to duplicate that onto more than 51% of the computers on the network. It would be impossible in practice.

  3. How does the network regulate mining difficulty?
    They set a target depending on how many miners are on the network. The more miners on the network = lower target which = higher difficulty. The less miners on the network = higher target which = lower difficulty

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#4645

  1. Money for electricity is spent upfront by miners - therefore it secures that miners are following the rules. Increasing security of the blockchain network.

  2. Because the blocks - including all the transactions (+merkle root) and the block header (timestamp, previous hash) - are hashed and cryptographically chained. Every block is connected to the previous one, as it includes the hash of the previous block, which is then again hashed with all the other components of the block. In order to change previously added blocks, huge computing capacity is required in order to re-mine all the multiple, subsequent blocks and catching up with the newly created ones.

  3. Based on the time required to mine new blocks. To be aligned with the protocol - the target hash is set lower (increasing the difficulty) or higher (reducing the difficulty).

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#4646
  1. So they have an incentive to keep a truthful record. Otherwise, they can lose a lot of money.
  2. because it would change all of the subsequent blocks in the sequence, and would take hundreds of thousands of years to successfully re-mine the subsequent blocks.
  3. By the puzzle that the miners need to solve. The more miners there are, the lower the puzzle target (less options). The less miners there are, the higher the puzzle target (more options).
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#4647

Homework on Mining and Proof of Work - Questions

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    So that they are discouraged (financially) from breaking the rules. They are required to spend money on electricity while mining then get rewards once the block is confirmed.

  2. Why would it be very difficult for someone to go back change a previously added block?
    Any change would require every block on the chain that follows it to be mined again. It would have to be done fast enough to be able to mine those blocks as well as catch up to the new blocks that are still being mined. Practically impossible unless you have at least 51% of the hashrate of the entire network.

  3. How does the network regulate mining difficulty?
    As more miners come online the hashrate increases. As hashrate increases the difficulty is automatically adjusted making the target hash more difficult to find. If hashrate decreases then the difficulty is adjusted lower making the target hash easier to find.

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#4648

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

It is a proof of them for the concept (proof of work). They can show the blockchain that they haved used electricity and were honest.

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

Yes because one single change in the previous added block will break the full chain which will take too much time to restore everything.

How does the network regulate mining difficulty?

The difficulty is high when the target is low.
More people mining = crypto puzzle more difficult (miners need to guess more times before guessing the correct one)

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#4649

  1. It is an incentive for miners to do honest work because they are paying the high electricity cost before the payout so its wise to follow the rules and not waste energy/money

  2. It would be difficult because each hash is figured out based on the last hash of txs. It would break each link connecting blocks. They basically would have to redo each block and then catch up with all the new blocks ahead of them. Practically impossible

  3. The more miners mining on the network, the lower the target (the number used to guess the nonce) will be, therefore making it more difficult for miners to guess the nonce.

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#4650

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

You cannot play the game for free. Once you are playing the game you have a cost to recoup. The easiest way to recoup is to play by the rules.

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

They would need to re-mine all blocks after their change and this is while the chain keeps moving forward so they need to move faster than the entire network.

How does the network regulate mining difficulty?

Every 2 weeks it readjusts the difficulty of solving the puzzle. The threshold is lowered or raised accordingly so that the average time to mine a block can be held at 10 minutes.

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#4651

  1. When miners spend money on electricity they are securing the network as well as creating new blocks, receiving block rewards and tx fee’s. If they act malicious they will only hurt themselves.

  2. If you were to change a previous block that would end up with a cascading affect where you create a new hash that makes all blocks after that one invalid. Then with your hashrate alone you would have to re hash all blocks and catch up with the network which is impossible.

  3. The more miners the more difficult(lower) the target. The less miners the easier the target becomes.

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#4652

  1. Because you can’t fake energy and energy is required to mine BTC

  2. The hash finger print would change for all the blocks after it. Then all the blocks after it would need to be remined, and the whole time new blocks are being added to the chain. The attacker would never be able to catch up

  3. The more people mining, the harder the puzzle is to solve. BTC readjusts the difficulty every 2 weeks.

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#4653
  1. If they dont spend money, they are not able to mine efficiantly and that incentivises them to invest.
  2. Because all the blocks are linked together which means that they would also need to change all the blocks in front of that block in the chain.
  3. By lowering the target makes it more difficult to mine which is needed when more miners are mining.
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#4654
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

The pay to play model forces Miners to operate within the rules of the network to recoup their initial up front costs and make money in the form of block rewards and transaction fees.

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

The Blocks are cryptographically linked and so they would have to change the prior block and play catch-up changing every other block crated by every Miner exponentially moving forward in the BTC Network. Individually they wouldn’t have the Hash Power, or the time to change all the transactions. It wouldn’t be worth it.

It’s like a single drop of water falling off the edge of Niagara Falls trying to flow up in mid air during the fall. It would have to beat the gravity and weight of the massive falling body of water, make the trip up, change the direction of all the water flow, and fight past the entire body of water down to ensure it all changed direction.

  1. How does the network regulate mining difficulty?

The number of miners determines the level of difficulty in the network. This determines the level of the nonce number, If the number of miners is high the level of the nonce is lower and harder to find. When there are less miners, the levels the nonce number is higher making it easier to find so that the miners can create the block.

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#4655

1.throught spending they are motivated to follow the rules to get compensated
2.not only it will cost so much computing power, but since alll the blocks are linked it is practically impossible
3. by adjusting the target in comparison to the hashrate

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#4656

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    As a form of investment to ensure good behaviour. It incentivises the participants to follow the rules so they don’t lose their investment

  2. Why would it be very difficult for someone to go back change a previously added block?
    This would break the chain link since the hash of the changed block would no longer match. To fix this, the individual would need to re-mine all pending blocks.

  3. How does the network regulate mining difficulty?
    The more participants are in the network, the harder the mining difficulty, and the fewer, the easier.

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#4657

Mining and PoW

  1. To incentivize miners to play fair so they can make profit and keep the blockchain secure.

  2. Because it would break all the blocks after it and miners are incentivized to make sure the blocks are correct and the blocks continue.

  3. By having a target number needed to hash a block in 10 minutes. The difficulty changes depending on the number of miners.

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#4658

  1. If they spend money on electricity they are more incentivized to earn their mining rewards. To earn the mining rewards they must follow the rules and complete blocks.

  2. It would be hard to go back and change a previous block because that will break all of the links between the blocks added after that one you are changing. Then you would have to go back and mine again all of those blocks that were originally mined after the changed one. It’s time and money consuming. When you change the block it changes the Hash which is used to create the hash of the following blocks.

  3. The network regulates mining difficulty with a certain target that the nonce+Transaction list+previous hash has to stay under to be mined. If the target is low it is harder to mine.

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#4659

  1. It is important to make miners spend money on electricity to add a monetary incentive in that following the rules will cause them to make money and not following the rules would cause them to lose money spent on electricity.

  2. It would be very difficult for someone to go back and change a previously added block because they would have to re-mine all proceeding blocks and do it quicker than future blocks are created to catch up and have the longer chain. This would be practically impossible due to the lack of hashing power one could have relative to the entire network of miners.

  3. Mining difficulty is regulated to make the block times as close to 10 minutes as possible. When the combined hashing power of all the miners grows, the target lowers to make it more difficult for the miners to guess and vice versa.

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