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To incentivize the miners to be honest. If they are dishonest, they will loose the invested.
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Any change in a previous block would cause the link between the blocks to be broken. In order to fix this every succeeding block has to be re-mined. The dishonest miner has to do this, faster than all other miners in order to achieve to create the longest chain. Then only the longest chain is the surviving chain.
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The more miners (hashing power) are involved the higher is the difficulty. Difficulty is adjusted every 2016 blocks. To increase the difficulty the target is lowered.
- Why is it important to make sure that miners spend money (on electricity) while mining?
Because by spending money on electricity it insensitive them to follow the rules, in return they will be rewarded financially for solving the puzzles and creating the new block plus transaction fees.
- Why would it be very difficult for someone to go back change a previously added block?
If you changed a previous block it breaks the link to the next block also changing the hash of all those block meaning you would have to solve the puzzle to all block effected, then you would have to catch up by solving the puzzle of the new blocks that have been mind after. to do this you would need so much computational power it wouldnât be cost effective or productive.
- How does the network regulate mining difficulty?
It regulates by setting the target value of the nonce.The higher the volume of miners guessing the nonce the target is set lower increasing the difficulty and set higher decreasing the difficulty when the volume of miner smaller.
- Why is it important to make sure that miners spend money (on electricity) while mining?
It aligns the incentives in a way that it is rational to play by the rules. - Why would it be very difficult for someone to go back change a previously added block?
Because the part of the chain back to the block changed would need to be remined (plus the blocks meanwhile added). - How does the network regulate mining difficulty?
It adjusts the target. The lower the target the higher the mining difficulty and vice versa.
Miners spend money on electricity in hopes of being the first to solve a cryptographic puzzle so that they can append the next block to the blockchain and win the block reward plus all the transaction fees of the transactions in their block. Through this expense the miners have proven that theyâve done the work to solve the puzzle correctly. It takes a lot of hashpower or computing power to make the thousands of calculations needed to find the nonce that, when hashed with the previous blockâs hash and the transactions of the proposed block, will produce a number lower than the target. Mining is expensive and that keeps miners honest. They have to do work in order to be successful. Spending money on the electricity for hashpower is their proof of work.
Changing anything in a previous block is very difficult because as soon as this happens all links in the blockchain after the change are broken. Blocks in the blockchain are linked together by Proof of Work which entails the expensive hashing of many numbers to make the links. Each block is represented by a hash. This hash is the result of calculating the SHA256 hash function of three pieces of data which are 1- the hash of the previous block (hash of block #1 is zero), 2- all the transactions of the block, and 3- a nonce or random number. Changing any of these values would produce a different hash. Making a change to a previous block would then alter the hash of that block which in turn would alter the hash of all successive blocks. Each block in question would have to be re-mined to find a hash value lower than the target. If this is attempted by an entity with less than 51% of the hashpower of the network, they will never catch up to the longest chain as they would have to re-hash all the blocks and it simply would take too long. Honest miners make more bitcoin in all the time the dishonest miner is trying to catch up to the longest chain.
The network regulates mining difficulty by setting the target based on the amount of hashpower on the network. The goal is to keep finding bitcoin blocks roughly every 10 minutes. If there is a lot of hashpower on the network the difficulty will be high and the target will be low. This means the miners will have to work harder to find a hash below the target. If fewer miners are on the network, the hashpower will go down and if the difficulty remains the same it will take longer to find a winning hash. Difficulty would be adjusted per the protocol to a lower value so that it becomes easier to find a winning hash because lowering the difficulty raises the target. When the target is higher there are more values between zero and the target and therefore itâs more likely for miners to find a winning hash.
Sort ofâŚthe miners guess a nonce to be hashed with the previous blockâs hash plus the current block transactions in order to find a hash value that is lower than the target. A nonce is just a random number used to create the block hash.
The networkâs hash rate is the computing power of the network and that sets the difficulty target, not the other way around. High network hashpower lowers the target which is more difficult to find.
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E16 Homework mining and proof of work
1 Money spent on electricity to solve the algorithm puzzle is an incentive to work
according the rules to get the new block approved by the nodes, rejection means loss of money invested in electricity and loss off bitcoins.
2 Because the hash of a block in the blockchain is based on:
-the hash of the previous block,
-the transactions data in the block
- the nonce.
Any change of data, changes the hash of the block and makes the next blocks invalid and disconnected.
The blockchain can only be restaured by remining the changed block and the next blocks at a faster rate then the other miners together can.
3 If there is a high hash rate lower the âtargetâ.
If there are a few miners with small computers make the âtargetâ higher.
c.q. make the range of possibilities larger to guess the nonce.
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- Because it forces the miners to make an investment in the creation of their blocks. If the blocks are erroneous they will be rejected by the network and the miners will lose their investment.
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- They would have to remine the subsequent blocks to the altered block in a time frame and hash rate that is faster than the rest of the network is hashing new blocks.
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- Mining difficulty is regulated by the setting a target to find the nonce which changes depending on how many miners are on the network. The higher the amount of miners, the lower the target, the harder the nonce is to find. The lower the amount of miners, the higher the target, the easier the nonce is to find.
1- Because they need to have something to loose in case they donât follow the protocol, meaning that if they want to change something they will loose lots of money by wasting all this electricity to at the end not get the reward.
2- Because each block is linked with the hash of the previews one and, if a miner change something on a block it will cost them much more electricity that makes it almost impossible to achieve it, meaning that instead by just following the protocol it will be more lucrative business than trying to cheat.
3- The difficulty is regulated by the amount of miners on the network, the more miners the higher the difficulty and obviously the less miners the lower the difficulty will be. This translate to a very regulated difficulty rate according to the amount of miners available in the network all the time.
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itâs important to make miners spend money (on electricity while mining so they stick to the rules. If they cheat or try to falsify they will lose money.
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Itâs difficult to change a previously added block because it would take a lot of electricity and computing power. They would have to re mine all the blocks which means it would be easier and cost effective to just play by the rules.
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Network mining difficulty is regulated by changing the target. If there are a lot of miners the target number is lower therefor have a lower nonce to guess. This is hard to do. If there are less miners there will be a higher target in return making it easier to guess the nonce.
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it is important to avoid malicious people will want to modify the blockchain and rewrite previous blocks.
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Because he will have to rewrite all the blocks chained together and he ll need a huge computational power, he will also need to have the longer chain (because the longest chain is a proof of integrity) so he will have to mined up until the current block. So he he have this power of computing it will be more interesting for him to mine legitimately instead of trying to double spend (the only purpose of trying to rewrite a block)
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More miner are mining lower the target to reach will be and more difficult it will to find it. The difficulty is adjusted every 2016 blocks based on the time it took to find the previous 2016 blocks.
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it is important to make sure that miners spend money while mining so they follow the rules and do not try to cheat the network.
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It would be very difficult to go back and change a previously added block because not only must you change that block, but you must change subsequent blocks, as well as any newly added blocks in the meantime.
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The network regulates mining difficulty by changing the target value higher or lower based on the hash power devoted to the network.
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Why is it important to make sure that miners spend money (on electricity) while mining?
Its important that miners spend money while mining because it insures that they are invested and will not alter anything incorrectly, or break protocol because they will not be rewarded and they will lose money. -
Why would it be very difficult for someone to go back change a previously added block?
it would be very difficult for someone to go back and change a previously added block because the hash of that block is based on transactions in that block, and previous block hash. Changing any data in a block changes the link between, and previous blocks. -
How does the network regulate mining difficulty?
the network regulates mining difficulty by the hashrate, the more miners the more difficult it is to guess the nonce
This is how to incentivize miners for the miner to get his money back (and more)
Because that block and all others added to the Blockchain would have to be recalculated
By raising and lowering the target. Higher target- lower difficulty and visa versa
- Why is it important to make sure that miners spend money (on electricity) while mining? Miners need to spend money so they are incentivized to follow the consensus rules and not commit malicious actions. Each block is that is mined is at risk of being rejected if nodes in the network suspect a miner of breaking the rules which gives more incentive to follow the rules are earning block rewards and transaction fees
- Why would it be very difficult for someone to go back and change a previously added block? In order to change the transaction data of a previous block a miner would need an enormous amount of hashpower, at least 51% of the network, to remine the modified blocks and all subsequent blocks, and produce a chain that is longer than the chain that all other non colluding miners have continued to mine on.
- How does the network regulate mining difficulty? As more miners join the network with more hash power in order to maintain the 10 minute block creation interval the mining difficulty is automatically increased by the protocol. This is done by lowering the nonce target making it harder to guess a block hash that is less than the target.
- because they want to be rewarded for mining and make up for the money invested in the mining process (electricity)
- They would have to solve all the puzzles again (because of the change of data, there are new hashes) and they would have to spend an insane amount of energy to solve all puzzles again (and future blocks already mined)
- by reducing the target number, the solution of the puzzle (hash outcome) has to be below the target number, by lowering the target number the probability that the outcome is higher will be bigger and therefore the puzzle will be more difficult to solve as the target number is between zero and infinity.
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They need to spend money on electricity when mining so they have the incentive to follow the consensus rules to get the block reward and transaction fees. If they did not have to spend money then they could be tempted to cheat the system at no cost to them. By making them spend money on electricity there is a financial cost to them if they decide to not follow the consensus rules.
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It would be difficult because it would break the blockchain link at that block and all subsequent blocks and would immediately seen by all. To achieve that you would have to re-mine all those blocks in 10 minutes which would require enormous hashing power at a huge cost. You would have also only have 10 minutes to do it before the next block is mined so you would have the longest chain.
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Mining difficulty is regulated by looking at the overall hashing power of all miners collectively and adjusting the difficulty so that blocks are mined approximately every 10 minutes. If the rate that blocks are being mined is quicker than 10 minutes then the difficulty is increased. If longer than 10 minutes then difficulty is reduced to get it back to the approximate 10 minutes. This adjustment is done every 2016 blocks (every 2 weeks based on 10 minute blocks). This is achieved by raising target (easier difficulty) or lowering target (harder difficulty) that the nonce has to solve.
hello,
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the bitcoin network is made secure thanks to the fact it has incentives. In order to mine, the miner must make use of electricity, putting him at a net loss. It is only after he follows the rules, guesses the correct nonce and compiles transactions that make sense that he can mine the new block, gaining the bitcoin that allows him to be at a profit. If it werenât so, the miners could be dishonest and that would not impact them financially.
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Changing a former block nullifies also the following ones, due to the fact that each new block is constituted from the hash (digital fingerprint) of the former block. As a cascade all following blocks are not valid anymore. The double spender would need to re-mine all the following blocks. But in the meantime, the real chain is still progressing, becoming longer (the longest chain is favored in btc). There is more money to be made while mining correctly.
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The target required lowers if there are more rivals mining. the hash of the former block, the data in the new block and the nonce must produce a hash that has a value lower the determined target. A lower target makes it harder to guess.
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This requires the miner to spend money (on electricity) to potentially reap a reward. This gives miners an incentive to play by the rules .It makes then spend money to make money.
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Each block has its own unique hash number, This number is given based on the transaction details inside the block, the has number on the previous block and also the nonce (number it needs to guess, below target). By changing any details in previous blocks, miners would need to re-mine the next blocks as the hash number of the block that proceeds it would change, and the one after that⌠and so on. The miner would also fall behind and need to catch up. This is improbable but not impossible (in theory)
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This is based on how many miners are active, the more miners, the higher the difficulty and vice versa.
1. Why is it important to make sure that miners spend money (on electricity) while mining?
Mining bitcoin is intentionally designed to be energy intensive. The computational power needed to solve the complex math problems requires a lot of electricity to power up the specialized mining hardware.
On the flipside, it requires even more resources to attack the network than to defend it, making Bitcoin the most secure blockchain today.
2. Why would it be very difficult for someone to go back and change a previously added block?
Each full node enforces the consensus rules of the network, a critical element of which is the currencyâs fixed supply. Each bitcoin block includes a pre-defined number of bitcoin to be issued and each bitcoin transaction must have originated from a previously valid block in order to be valid. Every 210,000 blocks, the bitcoin issued in each valid block is cut in half until the amount of bitcoin issued ultimately reaches zero in approximately 2140, creating an asymptotic, capped supply schedule. Because each node independently validates every transaction and each block, the network collectively enforces the fixed 21 million supply. If any node broadcasts an invalid transaction or block, the rest of the network would reject it and that node would fall out of consensus. Essentially, any node could attempt to create excess bitcoin, but every other node has an interest in ensuring the supply of bitcoin is consistent with the pre-defined fixed limit, otherwise the currency would be arbitrarily debased at the direct expense of the rest of the network.
3. How does the network regulate mining difficulty?
Miners generate numbers with the hope that one of them is less than or equal to the target value. The numbers are very large and are hexadecimal. Each block stores a compressed representation of the target called Bits. The bits are actually an abbreviated version of the target, introduced to save space inside the block header.
The difficulty is âadjustedâ every two weeks or so in order to keep the average extraction time unchanged as new nodes are added to the network.
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Since it is costing the miners electricity up front to mine the blocks they do not want malicious or bad transactions in the block that will not be accepted by the rest of the network that way they get paid back their block reward and tx fees.
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They would need to then go through and mine all future blocks after that block and never be able to catch up to be on the longest chain so theoretically the rest of their blocks they mine will not reward them and the rest of the miners will continue without them.
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More miners will bring down the target making more nonces have to be guessed to find a hash that fits in the acceptable range of numbers. If there are less miners the target is raised so less power needs to be used as less nonces need to be guessed.
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To incentivize the miners to follow the rules to gain their reward. Breaking the rules costs them money.
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Because they would have to resolve that block and catch up on all the following blocks since the longest chain is the one that will always be used.
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By adjusting the Target number that miners have to be lower than in order to solve the block. They will need to guess the nonce and a lower target is more difficult to hit than a larger one.