Homework on Mining and Proof of Work - Questions

[Mauro]

@ajphminer

1. It’s important that there is work or productivity involved in the generation of new bitcoins so that bitcoin will have value.

Yes. Hard money is the best form of money. If we want something to have a value it should be hard to produce, and luckly satoshi nakamoto made the network adjust the difficulty to always make the inflation steady.

[Fabrice]

@SatoshiOkoto

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

Blocks don’t grow exponentially. Difficulty of mining adjusts to maintain an average of 10 minutes between blocks.

[Mauro]

That’s alright. I am glad to see you understood it. Keep it up.

[Fabrice]

@blackboycrypto

3.How does the network regulate mining difficulty? the nonce is increased by lowering the target ,as more miner join the network

The nonce is just a random number. You just need to find a nonce that when you hash the entire block, the blockhash is below target. The lower the target the less possible hashes that are valid. Every 2016 blocks the difficulty gets adjusted by adjusting the target to maintain an average of 10 minute blocktime. So the more hashpower (or more miners are mining) the quicker new blocks get mined. So that’s why the target needs to be adjusted to keep a 10 minute average.

[Fabrice]

@GBIT430

3: By lowering the nonce

By lowering the target. The nonce is a random number that when hashing the block, the blockhash must be below target to be a valid block. When more miners are mining, the target get lowered to maintain an average of 10 minutes between blocks

[Fabrice]

@Von

The network regulates mining difficulty according to number of miners and hash rate. The higher the hashrate, the higher the difficulty (and the lower the nonce). The less miners, the lower the difficulty.

Lower the target, not the nonce. The nonce is just a random number to guess. Your blockhash needs to be lower than the target. To achieve this you need to keep guessing a random number and hash your block until it’s lower than target.

[Fabrice]

@lovreez

Maximum amount of bitcoin in circulation is 21 M. The closer we get to that target, more difficult it gets to mine. That, and also it depends on how many miners there are. More miners = higher difficulty, less miners = lower difficulty.

Mining difficulty has nothing to do with the total supply. The total supply is controlled by halving the block subsidy every 210k blocks. A target is a number where a blockhash needs to be Tobe accepted by the network. If your block hash is to high, you need to guess another nonce (random number) until you find a blockhash low enough.

Mining difficulty is regulated by changing the target every 2016 blocks. The more miners are mining, the faster new blocks will be mined, so we need to adjust the difficulty to maintain an average of 10 minutes between blocks

[Pendar]

Thank you, so its really not impossible under 10 min!

[cincinnato]

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

To find faster the nonce number that allows to sign the block with the right hash

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

He should recalculate the hash number of the block and all the hash number of the following blocks. It requires long time and work and would not be convenient even in the case that somebody would succeed. (Not to mention the digital signatures of the changed transactions that also would be on error)

How does the network regulate mining difficulty?

By adjusting the target number. Setting a lower number would increase the difficoulty for miners to guess the right hash.

[Von]

Indeed
I got mixed up bet week the words nonce and target thanx.

[SatoshiOkoto]

This is absolutely correct.
I appreciate your feedback Fabrice.

[Nickpuna1]

1. It’s important that miners spend on electricity as it shows proof of work.

2. Any change would make the hash output change that block which would then change all other hash outputs.

3. If too many miners are mining then the difficulty is growing higher, if miners leave then the opposite would happen.

[FilipGuldhill]

1.It is a Proof of Stake concept. Meaning, the cost of electricity to mine is an investment without a guarantee to be rewarded. Ultimately, this means that the miner that want to cheat will loose the electricity fee.

2.That miner will need not only have to change that particular block, but also all continually new created blocks thereafter. Its a monumentally large en-devour which require at least 51% of all mining power.

3.When there are fewer miners competing for block rewards, the hash target of the new block will be set closer to infinity (opposed to being set closer to zero). The lower this target is set, the less space there is to guess where the nonce (a random number) is placed. meaning it will be easier to guess this number to win the reward.

[Henk1]

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

• To ensure miners will follow the rules, because if they follow the rules they will be paid for doing so via inflation and transaction fees. If they don’t follow the rules they will lose their incentives and will lose money because they still have to pay for the electricity they used when mining.

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

• Because any changes made to a previous block will instantly change all the the blocks following that specific block. The PoW for all the new blocks will vanish and you will have to mine those blocks again in order to solve their puzzles again which is infeasible.

3. How does the network regulate mining difficulty?
   If more miners enter the network the target will automatically decrease. In other words, less possible guesses will be correct.

[jcampos]

1. The miners have incentives to follow the rules since they are invested in the mining if they don’t follow the rules will lose money.
2. If someone changes a previous block the link to the next blocks will break, because the has will not match anymore.
3. If there are more miners the difficulty to guess the nonce is increased.

[Bunbo_Hue]

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

This incentivizes the miners to play by the rules which keeps the system secure, because the miners have to spend money FIRST before they can be rewarded, and they are only rewarded if they play by the rules, which in turn keeps the network secure.

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

If someone tries to change a previous block, it affects all subsequent blocks and completely changes the hashes on each one. They’d then need to re-mine all of those hashes to get caught up, which would be almost impossible because other miners are already moving forward mining new blocks.

3. How does the network regulate mining difficulty?

The more miners there are, the more difficult it becomes to guess the nonce and mine new blocks, because the network lowers the “target”.

[GabrielCrypto]

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

It’s important to make sure miners are going to spend electricity because in this way they have to play by the rules when they are mining in order to get the reward and to make profit.

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

Will be impossible because once the information will be changed in the block they will have to update the information on the other blocks and also need to catch up with the blocks which other miners created so all this will need very big amount of money and years of work.

3. How does the network regulate mining difficulty?

So when the target is low the dificulty is high

[tyrannosaurus_flex]

1. Having the miners spend money to get money incentivizes them to work hard and honestly because they lose even more money if they are dishonest.

2. It would be difficult because any change whatsoever to a block will change the hash output which would not be valid for the next block and the miner would have to waste more resources just to try to keep up with the block chain.

3. The more miners there are the more difficult it becomes to mine.

[johnp]

I. By forcing miners to spend money the miners are incentivized to follow the rules or lose the time and money invested.
II.Changing the hash on a previous block means the hash will change on all subsequent blocks. Each following block must then be rehashed.
III. As miners compete, the target is lowered, essentially making the bullseye smaller.

[TeresaK]

@ivan

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

*Miners need incentives - by spending money on electricity they will be keen to earn transaction fees to offer their expenditure.
*It’s difficult to go back and modify a block as it then breaks the link between all connected and verified blocks to this particular block. If you modified a block you would then need to modify every block in the chain as each block is based on the verified data in the previous block.
*Mining difficulty is regulated between the nonce and target. The target number is constantly changing and the miner needs to guess the nonce which needs to be lower than the target.