Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#847

Why is it important to make sure that miners spend money (on electricity) while mining?
It is important that miners are financially invested. The upfront cost of mining is the incentive for miners to follow the rules. Following the rules and protocols of the block chain is how miners make money.

Why would it be very difficult for someone to go back change a previously added block?
Any change to a previously mined block will change the hash, which would change the hash in all subsequent mined blocks in that string. The changed block and all subsequent would need to be mined again, which would take a great deal of time and energy.

How does the network regulate the mining difficulty?
When the hash rate rises (more miners mining) the difficulty rises. If mining becomes difficult, the Target is adjusted.

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#848

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

  • Miners are essential in keeping the network secure and the fact that they are serious in mining through the use of electricity and ā€˜rigsā€™ is important.

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

  • Blockchains are blocks that are chained together. The current block will contain the hash of previous block (which in turn, calculated from previous blocks and their previous hashes.) Changing previous block contents will break these chains. In order for your change to be accepted again, you need to repair (re-mine all the broken links and also catch up with the new blocks, which is practically impossible.

How does the network regulate mining difficulty?

  • If there are too many miners the difficulty level will increase. There is a target, which miners will have to keep on guessing the nonce, hash the block, and compare to the target. The block only gets accepted if the hash is lower than the target.
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#849

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    This is an incentive for the miners to play by the rules and do their work properly.

  2. Why would it be very difficult for someone to go back change a previously added block?
    Changing an old block would be incompatible with the rest of the chain. If anything you would have to start a new chain but at that point you would be so far behind that your new chain would never be verified.

  3. How does the network regulate mining difficulty?
    Difficulty has a direct correlation with the amount of miners. More miners = Lower Target

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#850
  1. to incent the miners do everything by the rules. otherwise they dont get the reward and get no coins to pay the electricity and hardware bills
  2. all the hashes are connected to previous and next hashes. its practically impossible to remin all connected blocks.
  3. the more miners are mining, the smaller the target point for successful blockreward
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#851
  1. proof of work. they are financially incentivized to play by the rules in order to earn TX fees and block rewards.
  2. Going back to change a transaction list of a previous block would break the link to all subsequent blocks requiring that person to create new proof of work for all new blocks added to the blockchain.
  3. By changing the target based upon the amount of miners in the network. More miners = more difficulty, which is represented by a lower target.
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#852

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    It is important because miners are putting their own finances at stake for the possibility of a reward. If they were to try and break the rules they would not receive a reward, so it is in their best interest to stick to the rules which makes bitcoin trustless.

  2. Why would it be very difficult for someone to go back change a previously added block?
    If a previous block is altered in any way, the hash for that block would also change. As the cryptographic puzzle uses the hash from the previous block, it would change the hash for the following block, and the one after that, and so on. So the person would have to change the block then remine all of the other blocks that had been mined after (whilst all the miners continue mining blocks on the original unchanged blockchain). It could only be done if there the hashrate for the changed blockchain is greater than the unchanged blockchain, as nodes will always choose the chain with the most proof of work.

  3. How does the network regulate mining difficulty?
    Difficulty increases when there are more miners on the network by lowering the target value. Miners have to find a hash below a certain target value, so the lower it is, the more guesses will be required before a correct hash is found and the block can be mined.

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#853

  • Why is it important to make sure that miners spend money (on electricity) while mining?
    because otherwise they would be just paid for doing mining and they would only gain money. There must be balance.

  • Why would it be very difficult for someone to go back change a previously added block?
    Because no one is waiting for you. While youre trying to change some block, everyone else is working on next block and next one and so on. Therefore you must chance all other blocks mined after the one you tried to change. So you alone must be stronger than all other miners combined in order to catch them. And that is not poossible. Just wait hundred or so years till all BTC will be mined. then you dont need to catch anyone. Just kidding here.

  • How does the network regulate mining difficulty?
    more miners means more hash power and mining is more difficult. Less miners means lower difficulty. Also there should be some avg time needed to mine block so if it takes too long, it will be lowered for next block.

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#854

@ivan that was a great illustration page with the blocks and nonces, could you share the url?

  1. If it was free/cheap anyone could rewrite history and make previous transactions disappear.

  2. Because any change requires to remine all blocks after that.

  3. By changing the number of 0s required at the start of the hash.

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#855

  1. Because they have proven they have spent all this money on electricity. POW incentive to make money

  2. Because it would take so much mining to change something and relink the chain going forward.

Tough tough Section that. but very interesting

Thanks. .

  1. its regulated by the amount of miners. Target Low when the Difficulty is high.
#856

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

If it was cheap or free then there would no punishment for going back and attempting to change previous block data, introduce false transactions or break any other rules. The miners need to recoup the costs of mining which can they can only do if they follow the rules and secure the blockchain.

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

any slight change to the data in a block would change the hash of the data in that block, which would change the hash for that block, which would change the hash for every block after it and invalidate the addresses that they point to. Every block after (and including) the modified one would need to be remined so that the hashes all point to each other and are valid, and this would have to be done at a faster rate than the unmodified chain, as the unmodified chain would be multiple blocks ahead of the modified one. Therefore this could only be achieved by having more than half of the mining computer power working on the modified chain (51% attack). It would be more cost effective to have all of that computer power focused on the original chain, as that share of the computing power would earn the miner more in rewards than reversing any one transaction could.

3. How does the network regulate mining difficulty?

The hash of any mined block must be below the difficulty target. The more miners on the network the lower the difficulty target of the block hash, so the chances of getting a hash below the target are reduced. The lower the network hashrate (miner computing power) of the network the higher the difficulty target, increasing the likelihood of getting an acceptable hash for the block.

#857

  1. Why is it important to make sure that miners spend money (on electricity) while mining? The miners can get the block reward plus the transaction fees as long as they play by the rules.

  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 the ā€œlinksā€ get broken. And, there will be a new puzzle that needs to be solved. The difficulty of the puzzle is proportional to the hash rate of the network. You will have to re-create and solve all the broken links, and catch up with the rest of the network.

  1. How does the network regulate mining difficulty?
    By guessing the ā€œnonceā€ number. A nonce is a random number. When the target number is low, the more difficult it is for the miners to guess the nonce.
#858
  1. Miners having to pay upfront assures that they will maintain the integrity of the network as they will need to recuperate their loses for paying upfront in electric bills. Pay to play.

2)The way blockchain is designed deters people from this as the amount of computing power, cost of electricity and time it would take to achieve this, is completely unrealistic and counter intuitive.

3)The mining difficulty can be regulated by changing the target level from high to low depending on how many people are mining the network.

#859

ā€” My answers ā€”

  1. As rewards incentivize mining in the first place, spending money disincentivize incorrect mining operations: since rewards are obtained only by following the rules (but energy is consumed anyway), a miner would end up obtaining negative net profits if he/she attempts ā€œillegalā€ operations.

  2. Since the hash of each block is also used to produce the hash of the following one, changing any data inside an existing block would recursively produce invalid hashes in all of the following ones. A miner with malicious intentions would then be forced to re-mine each single following block, and would also need to do it faster enough to catch up with the other miners (since the network would reject a different, shorter version of the blockchain). This is theoretically possible only if a single entity has more than 50% of the hash power in the world, which becomes more and more infeasible considering the huge, growing size of the network.

  3. By checking the global hash rate and increasing/decreasing the threshold value accordingly: the lower the threshold, the more difficult is to find a nonce which produces a valid hash.

#860

1- It incentivises the miners to follow the rules and be honest to be profitable. Otherwise if they were to double spend or cheat in other ways there is no reward and they would have used up their electricity for no reward.

2- By the time a miner has gone back to change a block, so many more blocks would have been mined already and the miner would have to do a catch up and that ends up wasting more electricity to mine the previous blocks and then catch up and then mine the new blocks.

3- The network regulates it by adjusting the time required to mine by adjusting the target. If they canā€™t guess the nonce and hashing and it doesnā€™t meet the target then the difficulty will be adjusted easier.

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#861

1 Because it motivates them to play the rules, if they donā€™t, they loose money spend on electricity
2. Because if you change one block you have to change, next ones as well. This would require a lot of electricyty, and in the same time, other miners are still adding more blocks
3.The more miners then the target is lower and it is more difficult to guess nonce which has to be below target.

#862
  1. Ensuring that miners spend money on electricity (in order to compete in a contest and qualify for a reward), keeps them incentivized to play by the rules
  2. Changing a transaction in a previously mined block would be easily detected by all nodes that store a copy of the blockchain, and it would invalidate all blocks that were appended to the blockchain subsequent to the change. A bad actor would need to spend a lot of money and electricity re-mining all the subsequent blocks and it would be difficult (if not impossible) to ever catch up and pass the last valid block in the legitimate chain (making it the chain with the longest proof of work)
  3. Mining difficulty is regulated though the periodic adjustment of a target value that is used as a benchmark threshold in the cryptographic puzzle that miners are trying to solve. Lowering the target value makes it more difficult for the miner to find a suitable hash and becomes necessary when too many miners join the network.
#863
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

The price per kilowatt is the reason miners enter and or stay in the game. Miner x is spending amount y every month on the chance to ā€œunearthā€ a bitcoin. Cheating, harming the network or a combination thereof would result in a profit net loss. So it incentivizes good behavior.

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

Each block is based on the previous. If one wishes to change a block then one would have to also correct all the previously found blocks in the chain and do all this before the new blocks are added to the old chain.

The amount of hash power required is cost prohibitive.

  1. How does the network regulate mining difficulty?

The hash handles this elegantly but basic explanation More miners more difficulty. Less miners less difficulty.

#864

Why is it important to make sure that miners spend money (on electricity) while mining?
Answer: Part of it is that necessary to make the miners spend money. This way, If they break any rules then they also will end up paying for this.
Why would it be very difficult for someone to go back change a previously added block?
Answer: Yes, very difficult, because the blocks are linked togheter via hashes that depend on the data in current block AND the hashes of previous blocks. Any change in an historical block would necessitate changes to all blocks following. In theory possible, in practice impossble.
How does the network regulate mining difficulty?
Answer: By rasing difficulty when many blocks are in the mempool. Difficulty is a measure of how difficult it is to find a hash below a given target.

#865

1.because they are rewarded for keeping the network secure and sticking to mining rules
2.because if you change data in one block, the chain is broken and all subsequent blocks need to be created again, which is practically impossible
3.the network will set the mining difficulty depending on the mining power in the network to maintain block extraction on average every 10 min

#866

It convinces the miner to spend money/energy upfront to earn the rewards. It also assures that they donā€™t try to cheat/hack/double-spend since it would mean losing money twice, in a way punishing illicit behavior

They not only have to

  • hash the changes,
  • hash all the blocks which were already linked to the changed block, and
  • also to catch up to the corresponding latest blocks.
    it is time & energy consuming and not worth the effort.

If there are many miners the difficulty increases making it difficult to mine, which in turn leads to miners shuting down and which leads to decrease in mining difficulty.