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It is important to make sure that miners spend money on electricity while mining so that there is a cost and therefore potential loss of money if there is an attempt to do something malicious on the blockchain.
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It would be very difficult for someone to go back and change a previous block because it is time consuming and expensive to recalculate the hash. Additionally, while someone attempts to do that the network will continue adding blocks and there is a preference for the blockchain history with the largest amount of blocks.
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The network regulates the mining difficulty by adjusting the target lower for the hash when there is an increase in the number of miners on the network.
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Homework on Mining and Proof of Work - Questions
- Why is it important to make sure that miners spend money (on electricity) while mining?
A: To ensure they are incentivised to do honest work to generate profit from honest block mining. - Why would it be very difficult for someone to go back change a previously added block?
A: It would be break the link between the all following blocks and this would be near impossible as youād need to re-mine all the preceding block and then catch-up on mining the new blocks that were added while you were changing the previous block. - How does the network regulate mining difficulty?
A: By increasing the difficulty in guessing the nonce.
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- It is important to make sure that miners spend money (on electricity) while mining because this helps to ensure that they are incentivized to validate correct transactions, in hopes of obtaining a reward that will make up for the costs upfront from electricity.
- Any change in a previous block will completely alter the information and hashes for all other blocks. Not only would the programming requirements would be high, but there simply wouldnāt be enough time for someone to catch up to the other blocks being produced.
- The network regulates mining difficulty by lowering the target, if there are more miners. The nonce that miners receive must be lower than the target, which creates a more difficult window for them when guessing the correct nonce for a block.
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- To make money it requires you to spend money. That being said, if you are not honest, the electricity bill will not be covered by your mining rewards as nothing will be āpassedā to you for your contribution.
- Because he has to mine the entire chain of blocks again from the one that was altered till the last one(today). This would make it impossible.
- The puzzle needs to be resolved in maximum 10 minutes. If too complex, the difficulty will be reduced.
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Why is it important to make sure that miners spend money (on electricity) while mining?
Because if they spend up front, they will want to recover that money + incentives ( block rewoard + Transactions fee) for them to be a successful business, so that it is beneficial to play by the rules. -
Why would it be very difficult for someone to go back change a previously added block?
Because a block contains information of the previous block, and so the previous blockā¦so eventually go backwards and rebuild and catch upā¦it is just impossible. -
How does the network regulate mining difficulty?
by a hashing mechanism that has to achieve to be lower than a target number, and this target number the lower it is, the more difficult to get fixed under this target number.
The target number it will be lower and lower as more miners are mining.
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- Why is it important to make sure that miners spend money (on electricity) while mining?
A: It is important to ensure miners spend money whilst mining because it incentivizes them to adhere to the rules, be honest and uphold the integrity of the network. If they had no āskin in the gameā there would be no reason for someone with bad intentions to attempt to corrupt the network, the reason for mining is to enhance the security of the network.
- Why would it be very difficult for someone to go back change a previously added block?
A: It would be very difficult for someone to go back and change a previously added block because they would need to break the chain, as soon as they altered data in a previous block, the previous hash, the current hash and the nonce of each block from then forward would change. They would then need to remine the block they changed, guessing a new nonce, and then remine all blocks that come after. This would need to be completed as the network continues its new block creation time of every 10 minutes. They would need to catch up to real time, which mathematically would require them to have 51% or more of the total networks hash rate (computer power).
- How does the network regulate mining difficulty?
A: The network regulates mining difficulty through the amount of miners securing the network at a given time, the higher the amount of miners, the lower the target, and the lower the target the higher the difficulty.
target = low ----> difficulty = high target = high ----> difficulty = low
The target defines the value of which the hash produced by hashing the nonce, previous hash and tx list is of a lower value than the previous blocks.
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Why is it important to make sure that miners spend money (on electricity) while mining?
Spend it to gain it therefore cheating is eliminate. -
Why would it be very difficult for someone to go back change a previously added block?
Once change the content of the previous block then the entire block of network will change. -
How does the network regulate mining difficulty?
The more the miners the higher the difficulty puzzle process. and visa versa ā¦
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Why is it important to make sure that miners spend money (on electricity) while mining?
The reason why miners spend money is to create money and back the money up by something. If the money is not backed by other energy, it will act like the current money printer and make money out of thin air. -
Why would it be very difficult for someone to go back change a previously added block?
The reason it would be difficult to go back and change an older block is all the other blocks hash rates would change. The network would reject the change and the miner would quickly need to change or fix all the other rates (very hard). -
How does the network regulate mining difficulty?
The network regulates mining activity by the number of miners that are currently mining. The more miners the more difficult the target rates would be. More blocks would be rejected when the target rate is very low.
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- Why is it important to make sure that miners spend money (on electricity) while mining?
Incent them to not cheat
- Why would it be very difficult for someone to go back change a previously added block?
It invalidates every block created forward in that chain of blocks. They node will have to recreate all the blocks after it and it is basically not doable.
- How does the network regulate mining difficulty?
It regulated the difficulty by verifying the range the nuance has to be between.
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1. Why is it important to make sure that miners spend money (on electricity) while mining?
It guarantees the security of the network, miners have a significant upfront cost to pay in terms of electricity and in return are incentivised to solve the mathematical puzzle and have their block added to the network. They are paid in block rewards and transaction fees. Given the high electricity required, any attempt to compromise the blockchain would be extremely cost intensive and non economical. Miners incentives and rewards to solve the mathematical puzzles and have their blocks added to the network are much higher.
2. Why would it be very difficult for someone to go back change a previously added block?
Changing a previously added block requires a very high amount of electricity and also requires changing all the subsequent blocks as well as the connections between these. Itās nearly impossible to do, would require an extensive amount of computing power, electricity and time. In addition to this, the blockchain keeps growing and evolving, i.e. by the time an unethical actor would attempt to compromise a block, new legitimate blocks will have been mined and added to the blockchain. These would have to be changed as well for the actor to success in changing the record. In reality any attempt to change a block would be rejected in a POW network.
3. How does the network regulate mining difficulty?
Mining difficulty is dependent on the amount of transactions on the network, during times of high transaction volumes, mining difficulty increases. The increase in difficulty happens through the target number, which can be low or high. A high target number, makes it harder for the miners to establish the correct nonce that needs to be lower than the target number for the hash to succeed. At times of lower mining difficulty the target number is higher, which increases the likelihood of miners being able to guess a correct nonce, that is below the target.
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Because it will incentivize the miners to compete by the rules and make profits.
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Because they have to solve the previous hashes of all the previous blocks.
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By manipulating the target number to go up or down.
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Why is it important to make sure that miners spend money (on electricity) while mining?
Miners have to spend money on electricity, so they need to play by the rules and get profit from mining. Itās about incentives.
Why would it be very difficult for someone to go back change a previously added block?
If you change a transaction in a previous block, it will change everything after that block. And to get the original transactions back by maths could take hundreds of years, so it is kind of impossible.
How does the network regulate mining difficulty?
By changing the target. If the target is low, then the difficulty of guessing will be higher.
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1- Miners who have to spend a lot of money to mine the blocks are more vested in the process in order to make money. This ensures that the miner will follow the network rules and donāt break them.
2- It would be difficult for someone to go back and change a previous block bc it will break the connection to all next blocks which would be required to remined which would be too costly and take too much time.
3- by lowering the target, it makes the mining more difficult becuase the probability of the nonce being under the target is harder to achieve.
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1.) So that miners are incentivized to play by the rules. If they donāt then they waste electricity and donāt make money. If they donāt cheat and play by the rules they can make lots of money.
2.) If someone tries to change a previous block then it would change the hashes of all the newer blocks. These hashes wouldnāt be below the target number (the chance of them all being below the target number is practically impossible). So, the person would have to find new nonces for all the blocks that are newer that the one he has changed. Depending how many blocks are after the changed block would determine the amount of electricity needed for the job. Lots of money would be wasted on electricity to change that block when the person could have just used all that computing power to play by the rules and earn more money.
3.) The more miners there are the lower the target is for the new hash. The lower the target is the harder it is to guess by hashing different nonces with the transaction and previous hash.
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- Because for miners solve the puzzle, they are going to need electricity.
- Because if you change the contents, all the blocks are broken, which means you are going to have to rebuild the blocks again while other miners and progressing forward, you are going to have to catch up to them.
- Each block is mined every 10 minutes
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- To secure the network miners needs to be incentivized to behave properly to reach consensus. One way of enforcing that is making them spend eletricity to be able to compete for the rewards, that way is in their best interest to follow the rules to get the rewards, paying for the costs of energy + profit. Acting maliciously not only is not rewarded but also costs money.
- Changing a block that is already added to the blockchain changes its hash, and since each hash is related to the previous, any changes breaks the link with the rest of the chain, demanding all the next blocks already added to be re-hashed, and demanding more computational power to guarantee it would still be the ālongerā chain (in terms of PoW), which is mathematically almost impossible to do.
- Mining difficulty is adjusted mainly changing the ātargetā - the threshold which the hash of a block needs to be below : lower when more āpeopleā (machines and their power) are trying to mine, and higher when less - that way increasing or reducing mathematically the effort needed to mine a block.
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- This incentives the miners to remain honest.
- This would cause the miner to remine the altered block and every block after that. Very expensive and practically impossible to do.
- By adjusting the target according to the hashrate. The lower the target, the higher the difficulty.
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Act according to the rules and refuse to attempt to falsify transactions or incur double costs.
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Because applying hash functions would invalidate the veracity of the following blocks, because each block is linked.
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It allows to maintain the production time of cryptocurrency blocks uniformly, avoiding security problems and avoiding possible fraud. In this way, when the value of a cryptocurrency increases, miners are attracted to join the network, which increases its hash power and the difficulty adjusts and increases.
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This forces miners to make an investment and makes sure they do their best to build valid blocks (so they will recoup their investment and make a profit).
Because they not only have to change a previously added block, but also all the blocks that were created afterwards. This requires immense computing power.
It makes sure the block time stays at around 10 minutes by changing the target number for the nonce. The difficulty is adjusted every 2016 blocks based on the time it took to find the previous 2016 blocks.
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- It is important to incentivise miners to be honest and follow the rules.
- Each modification of previous blocks modifies all subsequent blocks up to the
present
one as the puzzle is based on the previous blocks via the link. - The more miners there are, the more difficult it becomes. All this translates into the
target price. The lower it is, the harder it will be to stay below the required threshold.