Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#827

  1. So that miners would play by the rules making the netwok secure, otherwise if they try to cheat they will be losing money (spent on electricity).

  2. If someone managed to change a previous block, it would just break all the connections of current blocks and their hashes. Because a hash of each block is based on the hash of a previous block (plus transactions + nonse).

  3. The more there are miners, the higher is difficulty. The higher is difficulty, the lower is target.

#828

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    This is one way that insures the invested interest of the miners to maintain the rules. Why would a miner risk their investment of electricity and hash power attempting to undermine the rules of the blockchain. The block would be rejected by the other nodes and another miner would receive the reward for appending the blockchain. The investment up front helps to insure the securiry of the blockchain.

  2. Why would it be very difficult for someone to go back change a previously added block?
    The crypto algorithms require certain properties to create a proper secure blockchain. One of those properties is that any slight change in data will change the hash of that data significantly. The moment somebody attempted to change a previously existing blocks data the hash of that block would be changed. That hash is a pointer that connects to the next block so that would alter the hash of the next block and so on like dominos be knocked over. The computing power and expense to then attempt to mine enough blocks going forward to establish a longer dominant chain is immense. When a network is secured with a high hash rate it is next to impossible.

  3. How does the network regulate mining difficulty?
    Mining difficulty is relative to the hash rate of the network. The hash rate is determined by the amount of computing power securing the network.The higher the hash rate the higher the difficulty. As the difficulty is raised the target number is lowered. The target establishes a value that the block hash must be less than. This hash is created by concatonation. A nonce is randomly selected and combined with the hash of the block. That is then hashed with the goal of the outcome to be a value less than the difficulty target. This process of guessing the nonce repeats until a required target value is achieved.

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#829

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    It is important to make miners spend money on electricity while mining because it encourages them to play by the rules to uphold the integrity of the network.

  2. Why would it be very difficult for someone to go back change a previously added block?
    It is difficult for someone to go back and change a previously added block because it breaks all the links between every single block that was mined after the changed block. It is practically and financially improbable for the miner to redo every block and catch up to the current status of the network because the network will keep on growing since the network will always trust the longest chain.

  3. How does the network regulate mining difficulty?
    The network regulates mining difficulty base on the hash-rate or total amount of active miners in the network. The higher the miners or hash-rate, the higher the difficulty level.

#830

  1. The blockchain is setup the way that the miners need to follow the rules and not try to change any hashes in any blocks because if they do, the block will not match with other block from other miners or nodes, therefore the electricity that the miner use to mine are wasted because they network will reject the block and there will be no reward. So it is important to make sure miners spend money to mine, if it is free to mine, then they have nothing to lose and will try to alter the blocks all the time.

  2. Blockchain is a chain of blocks, it uses the hashes as signature and each hashes of the blocks are created as it is related to the last block, if the transaction of any blocks are alter, the hashes of that block will change, since the hashes of each block are created with hashes of the last block, if the hashes or one block changed, then all the blocks after that block is invalid because the hashes changed.

  3. The network regulate mining difficulty by adjusting the target, when there are more miners, the difficulty become more difficulty by adjusting the target lower. The nouce have to be between 0 and the target #, it can not be higher than the target #, therefore BTC network will adjust every two weeks by adjusting the target # to regulate the difficulty.

#831
  1. It’s a economic incentive that makes you play by the rules to get the blockreward.
  2. Because you have to remine every block forward, this requires a lot of hashrate (electricity) and would also be very time consuming.
  3. Sets target lower or higher to keep adding new blocks to the network every 10 minutes. When there are many miners on the network, the target is lower.
#832
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    so that they follow the rules.
  2. Why would it be very difficult for someone to go back change a previously added block?
    because when you change something in a block all the blocks that follow will be wrong and your going
    to have to remine them.
  3. How does the network regulate mining difficulty?
    by lowering the target.
#833
  1. Why is it important to make sure that miners spend money (on electricity) while mining?skin in the game - if they invest money they are incentivized to make that money back
  2. Why would it be very difficult for someone to go back change a previously added block? - it would change the hash output of the previous blocks and effect the entire blockchain
  3. How does the network regulate mining difficulty? The more miners the greater the difficulty to identify the nonce because the target is lowered
#834
  1. Because it incentivize them to follow the rules. If there is something wrong with the block it will be rejected by the network. In this way they neither get the reward nor the transactions fees to cover their expenditures.
  2. The hashes of each block consist of the hash of the previous block, transactions and the nounce. If someone change the previous block the hash of this block changes too. Because the hash of the following block is based on previous hash the connection between this blocks would break as well as the connection to the following blocks.
  3. The more miners the higher the difficulty and the lower the target
#835
  1. They earn their incentives by following the rules. Discourage cheating the network.
  2. Any changes break the link to the next block.
    It will affect the hash output in the next block.
  3. The more the miners the lower the target.
    Lower target means high difficulty.
#836
  • Why is it important to make sure that miners spend money (on electricity) while mining?
  • beyond just skin in the game so you setup your miner correctly to the pool etc. for rewards. It regulates the amount of hash power and normalizes the market to current economic conditions (i.e. cost of mw in USA vs Siberia
  • Why would it be very difficult for someone to go back change a previously added block?
  • because they have to change everyone before that one to match(algorithmically not literally) the one they just changed before so its just unreasonable and untenable to do so since the theoretical hash power you would need could never even really be known and for what? waste hundreds of millions to ruin one chain when thousands more exist to replace it.
  • How does the network regulate mining difficulty?
  • raises and lowers difficulty to be an avg of 10 min block time, so a simple check of time if 10> min then reduce difficulty if 10< increase
#837 
Why is it important to make sure that miners spend money (on electricity) while mining?

Electricity is a way of keeping miners accountable during the mining process. If a miner is not honest or does not properly enter a transaction into the block then it will be rejected resulting in wasted electricity and money lost. However, if the miner is honest and properly enters a transaction into the block and it is accepted then Bitcoin will be earned as a reward.

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

Changing a previously added block would destroy the links to the blocks proceeding it. As a result, all of the blocks that were affected would have to be mined again which could take thousand of years to complete.

How does the network regulate mining difficulty?

Mining difficulty depends on how many miners there are in the network. The difficulty increases if there is a lot of activity in the network. In return, this creates a lower (harder to hit) target when trying to guess the nonce of a block required for acceptance.

#838

Because they need to spend money to make money.
They are incentivized by electricity cost for mining.

That someone would need 51% of hash power and it that case it still dont make sense because is less profitable.

By setting a target or limit on hash number .

#839
  1. To give them an incentive that if they spend money for electricity to mine - if they do the job right they will get bitcoin=money.
  2. Because if they change anything in the previous block the chain brakes and all of the next blocks need to be rehashed(solve the puzzle’s again) and it is impossible to do.
  3. More people mining=higher hash rate. Less people mining=low hash rate
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#840
  1. Because they solve puzzles in order to keep network secure
  2. Because it will take a lot of time and resources in order to do that and in the end will not be profitable to do that as network will always choose the longest chain, one dot changed in previous block will lead to the absolutely different info in next block
  3. It’s adjusting according to the amount of miners guessing the nonce, when there are more miners guessing the nonce, the target moves lower, the less miners the higher the target
#841

  1. Electricity shows a proof of work and the fact that miners need to play by the rules to cover their overhead cost—it takes a lot of energy to solve the cryptographic puzzle.

  2. Because you can only insert inputs into the blockchain, making changes would break links and change the previous hash number and hash number. This would require lots time and resources which is an incentive to play fair.

  3. The network will choose the longest chain and set a low target number for the miner to guess the nonce

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#842

1.- it’s because like in any productive cycle, you need to invest something (money, time, work effort) to get rewarded for it.
It’s the best way to make them involved, in the case of miners, spending electricity to produce new blocks.

2.- Because the most insignificant change in a previous block will affect all the blocks after. So if the miner wants this change get effective in the chain, he need to mine all the blocks affected for this change. Besides that, he is competing with the other miners who are producing the new blocks, and the blockchain accepts the longest chain of blocks, if any new block was mined, he needs to rebuild all over again.

3.- By setting a target for the hash number

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#843

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    it is necessary because if not, there won be any incentives to follow the rules of the mining process. To manipulate the blockchain is practically impossible but if someone had all the resources to do it. These persons would earn more money by just follow the rules.

  2. Why would it be very difficult for someone to go back change a previously added block?
    Because if they change one block, all the further chains will break and everyone will know something is wrong.

  3. How does the network regulate mining difficulty?
    Mining difficulty is proportional to the networkś hash rate which means= The more people mining, the lower the target level will be and therefore harder to find the right hash.

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#844

Not the nonce, but the entire blockhash needs to be below target. Because hashes are so scrambled, it’s hard to have a hash starting with a bunch of zero’s. So you guess a random nonce so when you hash everything it’s below target

#845

  1. Humans normally do not give much importance for free things. “Easy to come -> easy to go”. Being said that, having the miners spending a lot of energy to mine a block round each 10 minutes, “tight” them to play game by the rules, since by trying to cheat, they would have to spend the same amount electricity but with no acceptance from the network, consequently no block rewards.

  2. Blocks are linked by hash (digital ID) which requires a mathematical puzzle solution that depends on previous hash, transactions and nounce (random number). If you change the information in a block, the hash changes as well and breaks the link. It would required to re mine all the blocks by yourself in the sequence to reconnect the hash and have the information changed confirmed. Theoretically it is possible, but practicable it is extremally hard, almost impossible to happen.

  3. In order to mine a block, miners must “guess” the puzzle hash between zero and the specific target. To maintain the threshold of 1 block each 10 min, mining difficult must be increased when the hash rate (numbers of networking hashing) also increases. So, to make it more difficult, target number gets lower (reducing the delta from zero).

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#846

1 Why is it important to make sure that miners spend money (on electricity) while mining?
Because this is an incentive (for miners) in order not to cheat and good for stick to the rules since mining it’s so expensive.A bad behaviour would immediately be revealed obliging to rehash the block(s) and this will result in an even more costly work.Miners don’t want this so they follow the rules in order to receive fees.This is a perfect system! :heart:

2 Why would it be very difficult for someone to go back change a previously added block?
Because a complete rehashing of many many blocks would be necessary (and not possible) since they’re all interconnected.

3 How does the network regulate mining difficulty?
Raising or lowering the nonce number : in case there are many miners this nonce will be lower hence making harder to guess and solve this crypto puzzle.Many miners > lower nonce > harder job. A little amount of miners > higher nonce > easier job.

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