Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#767

1.Why is it important to make sure that miners spend money (on electricity) while mining?
By miners spending money, it creates the incentive atmosphere to mine, while following the rules. if they do not follow the mining rules, they lose money. The goal is to make money so it forces them to do what they have to do properly.

  1. Why would it be very difficult for someone to go back change a previously added block?
    By changing a previous block, it changes everything before and or after that particular block was created. Each block would have to go through the POW cycle ( Nonce, transaction hash/prev hash ) again, which would take more time and more energy, thus more money as well.

3.How does the network regulate mining difficulty?
The target number for a block is made low when the number of miners are high, thus created a high degree of difficulty figuring out the nonce of the current block being mined. The lower the number of miners, the higher the target number and the easier it is to find the nonce.

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#768
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
  • Miners are incentivized to not cheat. Only blocks that represent the truth will get picked up and added to the blockchain. The miner that produces a block that gets added will get the block reward in BTC. The block reward consists of both fees and mining rewards (inflation). This BTC can be sold for money to cover their losses / investment of mining. This is called proof of work (PoW).
  1. Why would it be very difficult for someone to go back change a previously added block?
  • Blocks have IDs, so called hashes. Each block hash is based on it contents (tx), the hash of the previous block, and the nonce. The nonce is a random number that needs to be guessed until the hash of that block is less than the difficulty target.
  1. How does the network regulate mining difficulty?
  • The difficulty target is is a number between 0 and infinity. The more people that mine the less the number of the target is. This makes it more difficult and secure to guess the right nonce and mine blocks. If one wanted to chance data contents in a block on the network one would have to mine all the previous block and all blocks after that block plus all blocks that are mined by other miners in the mean time. Practically impossible!
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#769

Miners will then only be rewarded with tx fees. By that time, Bitcoin (letā€™s hope) will be worth so much, tx fees will be enough to cover their expenses. This means miners are still incentivized to mine and secure the network. But I think we can all agree, when we see what is going on in the world and do the math, this wonā€™t be a problem.

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#770
  1. Because miners are mining so that they can pay for electricity and make profits.
  2. He would have to confirm all the transactions again and the network would see that.
  3. If more miners are mining the difficulty increases.
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#771

  1. Miners are incentivized to spend money on electricity in hopes to make a profit mining. The more correct guesses the miner make they receive a fee for transactions feeā€™s & inflation fee to produce a blockchain.

  2. If someone goes back and change a transaction list on the hash block that data is now corrupted and destroys the link of hash block/hash data before it. The nonce number changes everything and it will automatically create a new block for the change that was made.

  3. The network regulate mining difficulty by controlling supply and demand. the more demand there is the miners have a smaller supply of data to guess.

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#772
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

So that they will loose money if they cheat.

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

Because of SHA256 hashing; if anything is changed, the links between block will be broken.

  1. How does the network regulate mining difficulty?

With the nonce. The lower the nonce, the more difficult it is to validate a block.

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#773

  1. Balance of incentives. If they spend a lot of electricity that means, that they pay for that and arre committed. So chances are higher that they follow the rules to get a reward.

  2. Changing a past block means that you have to re-mine all following blocks until you have the longest chain with most PoW, because changing a block means changing a hash and with that all connections between blocks will be invalid.

  3. The difficulty depends on the hashpower of the network and adjusts every 2016 blocks. This is how the network is quite stable and can produce a block approx. every 10 minutes.

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#774

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

  • because if they spend money first now they will need to make up for these money and therefore they need to play by the rules in order to get rewarded. If they donā€™t play by the rules their block will be dismissed by the network.

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

  • because in order to change any previously added block you need to change all other blocks before that as all of them are connected.

3. How does the network regulate mining difficulty?

  • the more miners are mining, the more difficult the network makes it to guess the correct number (nonce) by lowering the target, therefore minimising the amount of acceptable results (hashes).
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#775

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

To incentivize them to stick to the rules as if they break the rules and e.g add something malicious to the block it will be rejected by the network and they will have wasted time and money in electricity

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

Because this would invalidate that block and then all subsequent blocks would have to be re mined this would take so long it is near impossible and definitely infeasible

How does the network regulate mining difficulty?

The more hash power the harder it becomes the less hash power the easier it becomes transactions are linked directly to hash power mores transactions more hash power higher difficulty and vice versa

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#776

  1. It is important, because it ensures the security of the blockchain. Trying to make changes to it will require too much computing power to be feasible. Miners are incentivised to use their computing power to be honest and just mine.

  2. All the subsequent blocks have to be recalculated, because the hash in each block will change. Other miners will also be mining new blocks. So changing something in the blockchain and becoming the longest chain requires more than 50% of the hashing power of the network.

  3. The network produces one block per 10 minutes on average. If more blocks are produced, the mining difficulty will be increased by lowering the target number of the cryptographic puzzle. If less blocks are produced, the target number will be adjusted to higher value.

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#777

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    Miners spending money on mining makes them play by the rules. If they try to trick the system they wonā€™t have their block(s) accepted by the network and wonā€™t have a return on the money/electricity spent.

  2. Why would it be very difficult for someone to go back change a previously added block?
    Because if you do that, you will need to change every block that was created after the one you changed initially (because every block has the hash of the previous block in it). Additionally, you have to do this while new blocks are continuosly added to the blockchain, so you have to be quicker than anybody else on the network.

  3. How does the network regulate mining difficulty?
    By setting the target number of the hash lower or higher.

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#778

  1. It is important for miners to spend money on electricity while mining because it incents their behavior to conform to the rules so that the consensus method can be trusted. Additionally, it creates a situation where there is financial disincentive to attempt breaking the rules because potential financial gain is not greater if rules are broken than what can be obtained by simply following the rules.

  2. It would be extremely difficult for someone to go back and change a previously added block because of how the current blockā€™s hash is created. Since the current blockā€™s hash is a function of the prior blockā€™s hash, TXs in the current block, and the nounce in the current block, nothing can be altered without changing the hash and breaking the link.

  3. The network regulates mining difficult by increasing or decreasing the target. The level of difficulty has an inverse relationship with the number of miners. The lower the target the more difficult the mining and the greater number of miners needed to solve the puzzle. The higher the target the easier the mining and the lower number of miners needed to solve the puzzle.

The entire scheme is brilliant. At present, I think one would need a Tesla mechanism to source ā€œfreeā€ electricity and a set of quantum computers to run calculations in order to circumnavigate the financial disincentives of breaking the rules. :boxing_glove:

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#779

1.Its important to make sure the minors spend electricity the minors have to be honest because its the only way for them to make the money back as their reward.

  1. They would need tremendous computing power to guess the nonce of the previous block and then remind the new blocks he once had to break. This will be costly plus other minors will continue to mine blocks as they try to do this.

  2. With more minors the difficulty level target gets lower which bakes it harder for individuals to gets the nonce of he block

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#780
  1. miners spend some money in electricity and got the rewards if they play by the rules.
  2. because you have to spend a lot of electricity and hash power and takes hundred years to do it.
  3. if there are so many miners the target is set to lower and the difficulty is higher.
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#781

  1. The cost of mining incentivises miners to play by the rules

  2. By changing a previous block, every subsequent block would therefore need to be changed and re-mined also which would require an enormous amount of computing power, time and money which would make the process extremely impractical and near impossible to do

  3. Mining difficulty is regulated by lowering the target within which the nonce must be guessed

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#782

  1. It is important that miners spend money on electricity while mining because it incentivizes them to be honest and follow the rules. If they donā€™t follow the rules they will lose their money, if they follow the rules they can get rewarded (basically recouping their losses + make a good profit).

  2. It is very difficult to go back and change a previously added block because changing a block will break all following links. The person would have to recreate all links and play catch-up with the blocks until their chain is longer than the existing one, which is basically impossible because of the insane amount of hash power that would be required to do this.

  3. The network regulates mining difficulty by changing the target number. When there are a lot of miners (= mining is too easy) the target number becomes lower so that it gets more difficult to guess a correct nonce (and vice versa). This mechanism helps to make the network more secure against attacks.

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#783

Spending money makes the miners invested in the process so that they will be even more incentivized to get the block reward.

Because the hash of that block and all future blocks would change, and for you to solve all of the blocks as well as the currently being mined ones, would be impossible.

By lowering or raising the target nonce, so that miners will have to guess more or less to solve the puzzle. The higher the nonce the easier the puzzle is, vice versa.

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#784

1.) Itā€™s important to make sure that miners spend money on electricity while mining in order to make them invest in the process. This gives them an incentive to do things properly so that they donā€™t waste the electricity and time spent on the block.
2.) It would be difficult to change a previously added block because then all subsequent blocks would be different as well and thus, they would all have to be mined again.
3.) The network regulates mining difficulty by raising the difficulty the more miners there are participating. This is accomplished by lowering the target number that must be guessed by the miners computers; the lower the number is, the more wrong answers there are.

#785

1.in order to create a finaincial incentive for them not to act in bad faith becuase if they give bad block then it wont get added to the blockchain, no block reward and wasted money on electricity
2.because you have to guess to nonce of prev block and then guess the nonce for next blocks wich will keep getting added.
3. it adjusts based on the hash power of network, if it drops becuase less miners then the difficulty decreases so that each block is aprox 10 min

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#786

Answer 1:
So that they have an incentive to follow the rules to not lose money.

Answer 2:
Because of the cost needed to change all previous blocks and then make the longest chain.

Answer 3:
By calculating a target based on the total hash rate of the entire network. The higher hash rate the lower the target.

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