Homework on Mining and Proof of Work - Questions

[Ball]

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1. Incentives miners, to be honest, discourage cheating

2. Because the block’s hash is derived from

• the transactions of the block
• the previous block’s hash
• and the nonce

If you go back and change a transaction in one of the previous blocks, then it changes its hash, and all the following blocks will be invalid. One needs to re-mine them and catch up with all the new blocks too to convince the other nodes that it is valid, which seems impossible.

3. If more miners are in the network, the difficulty increases by lowering the target number.

[content_noir]

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

This is PoW showing that miner spent energy to mine the block. Otherwise, there would be no skin in the game and no incentive to play by the rules.

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

Every new block created is hashed out with a unique digital fingerprint. If you change any information in a previous block, every subsequent block’s information changes, invalidating the chain. Every block you go back increases the difficulty exponentially of catching up to the longest chain to reorg.

3. How does the network regulate mining difficulty? Based on the amount of miners on the network. More miners, more hash rate. More hash rate lower the target nonce.

[Calle_Jansson]

1. It is important because it makes the miners invest in the process, and to get that return on investment back they have to follow the rules.

2. It would be very difficult because the previous and past hash would change from any altering in the block. After that it would be practically impossible to go back in the link and fix what has been changed.

3. The more miners there are the lower the target number will be and therefore the difficulty will become higher.

[Yesyes21]

1- It’s important for minors to spend money to keep everything secure and not to break any rules.

2- if you change anything from the previously block the output of the hash block would change completely.

3- When more people are mining it’s more difficulty to guess the nonce and it will make the target much harder to find.

[kyliezz]

1. If miners spend money on electricity they have thus invested and have the incentive to play by the rules and make that money back, as well as with profit hopefully.
2. It would be exceedingly difficult to go back and change a previously added block because it would change the hash, the nonse, and the previous hash entirely, which would require needing to change the entire chain of blocks following that block to the current block as well as those trying to be amended.
3. The network regulates mining difficulty by making the target number for the hash low when there are a lot of miners, requiring mining more possible numbers; and inversely making the target number higher when there are fewer miners on the network, making it more probably to guess a nonse that achieves a hash below the target.

[Nityam_Jigyasu]

• Why is it important to make sure that miners spend money (on electricity) while mining?
  So that they receive incentives and keep generating new Bitcoins and in turn the whole mining business flourishes if they follow the protocol.

• Why would it be very difficult for someone to go back change a previously added block?
  Re-mining is a costly affair, it will take thousands of years to solve the puzzle, build and follow the chain of blocks again to re-do the transaction correctly.

• How does the network regulate mining difficulty?
  Greater number of miners at work means greater the difficulty to solve and find the nonce(random number), by lowering the target value.

[Peter_C]

1. to make the cost of breaking the rules high
2. because it would require a high cost that would likely not equal the reward
3. by the number of miners competing for the block reward and transaction fees

[qh.w]

1. Why is it important to make sure that miners spend money (on electricity) while mining?
   Increasing cost for miners is to make sure miners follow the rule. if having any dishonest activities, the miner(s) should pay high price. Also it’s how the incentive works.

2. Why would it be very difficult for someone to go back change a previously added block?
   Because any block has dependency of previous block, if any previous block is changed, it will break rest blocks and link chains between blocks. it’s impossible rebuilding the broke blocks and when other miners still append blocks on the chain.

3. How does the network regulate mining difficulty?
   Using target, the number, and nonce, a number too, when hash value is great then target, don’t accept the hash. this method will keep miner to guess nonce to get acceptable hash. and if target is low, the difficulty is high when miners is more.

[figurin]

1. is important to make the miners spend electricity to give them the final incentive of owning the block and the transaction fees by following the rules .
2. it would be very hard and expensive to do so it would brake the chain starting with the previous hash on forward , impossible
3. the nonce regulates the difficulty of the hashing approximately every 10 minutes , the more miners the higher the difficulty and vice versa

[RailGame]

• Why is it important to make sure that miners spend money (on electricity) while mining?
  This is to show Proof of Work that adds to the security of the network.

• Why would it be very difficult for someone to go back change a previously added block?
  Because every subsequent block is derived from data within itself plus the hash of the previous block. So someone would have to have exponentially more computing power to change the previous blocks plus catch up to the current block.

• How does the network regulate mining difficulty?
  Setting a target value range for the hash regulates the difficulty.
  By minimizing the range of the target, the generation of a nonce that in turn is used to generate the hash within that target range becomes lower in probability hence higher in difficulty.

[Pendar]

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

Proof of Work will be the collateral to Bitcoins monetary incentive.

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

Extra electricity need to change has not yet made it a better monetary policy (by consensus) to go back in time and change blocks. miners and HODLers will lose money if that happens maybe.

3. How does the network regulate mining difficulty?
   More miners equates to lower hash Target, harder to guess.

[Matgas]

1. The expenses for miners are kind of a commitment to play by the rules which allows to the blockchain to stay true to its standards (transactions can not be removed or changed, miners get rewards, etc…)
2. If they try to change the previous blocks, all connections between the upcoming blocks break and have to be re-hashed which takes a huge amount time.
3. The mining difficulty depends on the amount of miners in the blockchain. The more miners there are, the more difficult is it to be below the target.

[Adrian_P]

1. Spending money on electricity miners will have incentive to follow the rules.

2. Changing a previous block will break the link to all new blocks.

3. When more miners in the network the target is lower that means difficulty is higher.

[Omar]

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

2. Why would it be very difficult for someone to go back change a previously added block?
   Because all the blocks are encrypted with each other. change anything and you change the whole chain.

3. How does the network regulate mining difficulty?
   Trying to adjust the mining target and Nonce.

[Bifin]

1. Incentive to be honest and if they do not follow the rules will loose money.

2. Would have to re-hash all following blocks forward from the changed block on the blockchain.

3. By monitoring the block validation time and keeping this time to 10 minutes.
   Increasing the mining difficulty if the block validation time is below 10 minutes.
   Reducing the mining difficulty if the block validation time is above 10 minutes.

[Matoshi]

1. In that way miners is paying in advance and only if they play by the rules is going to be rewarded and make profit. Other wise, if they cheat, they just waste electricity (money).
2. Because it requires huge amount of computing power, theoretically more than 51% of total hashrate, because they have to mine not only blocks from changed block, but also all new added blocks to make their chain longest.
3. More miners, makes a bigger hashrate, bigger hashrate affect level of puzzle difficulty (through nonce). And the more difficult puzzel is, the smaller number to guess.

[SatoshiOkoto]

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

So they can prove they have done the work (POW) and are entitled to the rewards.

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

Because the hash of the new block will change imminently and it would take years to solve the puzzle again. On top of that you need to race against all the new created blocks that are growing exponentially. The network will also only accept the longest chain so that makes a change practically impossible.

How does the network regulate mining difficulty?

By setting lower targets for the hash outcomes once more miners participate.

[TaahirCrypto]

1. proof of work
2. the will need to re mine the block and all blocks after untill thy catch up.
3. the more miners the higher the hashrate the more difficult mining becomes.

[Dylan22]

1. This is their financial incentive to solve the nonce and keep the network running.

2. Changing a block will change the link of the following blocks. Would take forever to catch up. They will make more money being honest than by cheating.

3. Depending on how many miners are available, the target will be more or less difficult. It is proportional to the hash rate of the network.

[Tomaso69s]

1- Because they need to spend money and/or resources first in order to have “skin in the game” and have an incentive to mine
2- Because of time constraints. The hash of the block that is currently mined is dependent, among other things, of the hash of the previous block. So to change a previously added block, you first need to mine that block the previous block and all blocks that follow, while during that time other blocks are being created. Therefore, you would be playing catch up in perpetuity
3- By lowering (more difficult) or increasing the target. With a high target, the nonce is reduced and therefore less difficult for miners to guess it