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Why is it important to make sure that miners spend money (on electricity) while mining?
So that they can work for the incentives and also not find ways to manipulate the blockchain. -
Why would it be very difficult for someone to go back change a previously added block?
Because you will have to change all the blocks that have been confirmed after the altered block and blocks get added every 10 minutes. Altering a single block will take months at least. -
How does the network regulate mining difficulty?
Whene there are too many available miners for the transactions in the mempool; the network decreses the puzzle target, thereby making it harder to guess in order to get your block added to the ledger - this discourages many miners and makes them logout. The reverse is the case when there are few miners available.
- Why is it important to make sure that miners spend money (on electricity) while mining?
*Incentives, ensures that if the miners spend money to be honest they will be rewarded, this is how to keep the miners to follow the rules
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Why would it be very difficult for someone to go back change a previously added block?the chain can be broken and you will need to redo all hash functions because one change changes all blocks.
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How does the network regulate mining difficulty?This is based on the “Target” and “Nonce” the more people who are mining the difficult the cryptopuzzle, the difficulty to find the “nonce” on the target as well
- By investing recourcess in to the mining process miners are incentivise to follow the protocol and confirm transactions that represent reality.
- Changing transaction on previouse block is a process that requires enormus amount of recources to be able to re-mine all the subsancent blocks as you need to change the hashes that links the blocks. This process is extremly expensive and requires a lot of time which makes it unsustainable and practicly imposible.
- Dificulty level regulated by the network represents the level of the network engagment at certain period. If the network usage is high the dificulty level will be higer as many miners are competing to each other to win the next block and earn the reward and with that secure the network integrity.
A1. If they invest, they will play fair to get return on investment as incentive.
A2. They will have mine all the subsequent blocks and keep the longest chain.
A3. The more miners participate, the harder the difficulty is.
- To make sure they are incentivized to keep adding to the blockchain correctly.
- They have to mine two blocks faster than everyone is mining 1
- By using the target, the more miners the lower the target which increases the difficulty.
- Miners use electricity to ensure that if they do not follow protocol and are honest they will lose money during mining.
- Changing a previously added block would mean they would need huge amount of computing power, have 51% or more to control the network, recreate previously added blocks and then catch up and change any newly created blocks from the other miners.
- Network mining is regulated by the target number that miners have to achieve. More miners on the network creates a higher hash rate which increases the difficulty to solve the block, this determines whether the target is set high/low
1 spending money on electricity is an incentive for miners to keep mining honestly and solving the puzzle in order to be rewarded.
2 it would be very difficult for someone to go back change a previously added block because they would have to mine all the blocks again by themselves as the chain goes on. to be able to do this it is necessary to have at least 51% of the total hash
3 the network regulate mining difficulty by decreasing the so called target when mining power is high. this will make it harder for miners to get a hash that is acceptable
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Why is it important to make sure that miners spend money (on electricity) while mining?
It forces miners to have collateral that they could lose if they were to try alter previous blocks. -
Why would it be very difficult for someone to go back change a previously added block?
They would have to single handedly re-mine blocks after the altered block -
How does the network regulate mining difficulty?
By setting a target, this target is changed based on the amount of miners entering the network. The more miners, the lower the target meaning increased difficulty.
- It is important that miners spend money on electricity while mining since you will actually lose money if being dishonest.
- It would be very difficult to go back and change a previously added block since it would break the link to the next and the following blocks. Also it is nearly impossible and will most likely take hundreds and hundreds of year to do since you need enough computational power.
- As there are more miners the difficulty to guess the nonce is increased by lowering the target.
- Because they spend money up front before they can get paid. This gives incentive to play by the rules.
- Because they will have to spend money to mine that block and all subsequent blocks in order to submit a correct blockchain. This is virtually impossible.
- By adjusting the target hash. The more miners there are, the lower the target hash and thus the more difficult it is to mine.
- Why is it important to make sure that miners spend money (on electricity) while mining?
The money they invest in electricity acts as an incentive. The miner will want to work in accordance to the protocol to increase their chances of their block being accepted onto the BC.
- Why would it be very difficult for someone to go back change a previously added block?
It is very difficult for somebody, particularly and individual on one computer, to go back and change a previously added block because they will need to catch up and that is practically impossible. It will take them a long time to fix the block and while they are doing this and repairing the links to following blocks, many more blocks will have been created. They will be forever catching up.
- How does the network regulate mining difficulty?
The network regulates mining difficulty through the number of miners that it has and this effects the target number. More miners = lower target number = difficult.
- This is important, because miners need to be incentivized to compensate their costs and to also make some profit. This is where the term PoW comes from.
- Because they would have to fix all the links of the blocks that come after the changed block and they have to catch up with the newest blocks.
- The more miners get involved, the higher will be the difficulty because the target will be lower. If there are less miners, the target will be higher and mining will be easier.
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It incentivizes miners to obey by the rules of the network
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That person would have to create a new PoW for the block he/she wants to change as well as all the following blocks up to the present.
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The network adjusts mining difficulty so then one block is produced approximately every 10 minutes.
- allows them to have skin in the game. they can earn a reward but will take losses as well if wrong.
- each block hash is interconnected. so if one is change then it changes the next one. in order to change a block farther back, the blocks in the future would need to change as well.
- the nonce is lower when more people are present.
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It is an incentive for miners to be honest and helps ensure the security and integrity of the blockchain. Every node will see and reject a transaction that doesn’t make sense resulting in the miner losing money and time
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Changing a previous block would require having to remind all the blocks on the blockchain which would the immense amounts of computer power. Each block is signed or based on a hash that is based on the contents of all records on the blockchain. If anything is changed the computed hash will no longer match the original hash and the change is rejected.
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The difficulty is adjusted automatically upwards and downwards depending the number of participants mining. A valid hash must be below a certain target value set automatically by cryptocurrency protocol. The lower the target value the more repetitions of the hash function a miner must go through in order to get an acceptable result which increases the difficulty.
A). Electricity is the fuel that powers the protocol for the blockchain. This is in part for creating the incentive. This means that if miners have no incentive to create valid blocks and getting the block rewards. By forcing miner to spend on electricity will make sure they have skin in the game.
B). By trying to go back and change the previous block will change all the hashes on the blocks after this block, and will have to hash again all the blocks after this block and would need to have 51% hashing power to do this. This is important for security reasons; this forces the miners to play by the rules to get incentivized.
C). Mining difficulty is regulated by lowering the target hash. The miner needs to find a hash that is lower then the target hash, lowering the target would make it less likely that the miner makes the correct guess, which in turn make the miner make more guesses to get the correct hash.
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It is considered an incentive.
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It would cost a lost of money and also take a lot of time/resources.
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It has difficulty adjustment based off of how many miners are securing network.
Homework on Mining and Proof of Work
1. Why is it important to make sure that miners spend money (on electricity) while mining?
It is important to spend money:
- to have computational power to solve a block.
- when they spend electricity they will be honest to earn a reward than wasting energy on hacking.
2. Why would it be very difficult for someone to go back change a previously added block?
This would be difficult because it will require to change all the previous transaction data. This is because every block has the hash of oprevious block embedded to it and all the blocks are linked to each other, Modifying previous block will in turn change all the subsequent blocks on every node which is computationally impossible.
3. How does the network regulate mining difficulty?
If the miners are more, the solution to mining problem is made difficult to find. In general, miners need to find such a nonce (which is the solution to mining problem) with which the resulting hash is lower than the target. So to increase the difficulty, the target itself is lowered so that it requires even more power and time to find the right target.
It creates upfront costs to make it expensive to be dishonest.
The time needed and cost to do so makes it nearly impossible.
Each block is mined every 10 minutes
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Why is it important to make sure that miners spend money (on electricity) while mining?
Miners need to spend electricity as part of the proof of work system. The use of a resource in the PoW system, in this case electricity, causes real stain and cost
benefit analysis on behalf of the miner. Having spent resources, the miner is now enouraged to make up these resources with something of value, in this case bitcoin. Miners
are therefore strongly encouraged to compete amongst themselves over payment in bitcoin, creating a system that favors mining, transparency, and efficiency. -
Why would it be very difficult for someone to go back change a previously added block?
Changing a previously added block is very difficult because of two things - 1 the amount of time needed to update 1 block and 2 the amount of time and energy needed to update the majority
of all miners to agree with this added changed. 1, updating a block requires that the data be rehashed under a new nonce guess and under a valid target. This in turn requires the block after
this block to be updated, with then in turn requires the block after the 2nd block to be rehashed. This cycle is essentially endless… further more doing this activity in large scale to update
millions of miners makes this even harded because 1 PC changing data CANNOT win against thoustands of miners who have already confirmed against this transaction -
How does the network regulate mining difficulty?
The network regulates mining difficualty but changing the target for nonces. When many miners are online the target is lowered, making the chance of guessing a correct nonce very, very low.