Homework on Mining and Proof of Work - Questions

[Mauro]

@Oscar_Rasmussen

Which would need 2x the mining speed of others.

They would need more than 1x speed of the others. If they have more than 51% then they are faster. For a good attack you would want to be at least 70% or above in my opinion.

[Mauro]

@Suspect5

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.

It is important to notice that with their electricity spent, they are making the block backed up by work. This means, that changing the block later on in the future will require it to be remined again. This makes the blockchain more secure and immutable.

[Mauro]

@Suspect5

By changing a previous block, it changes everything before and or after that particular block was created.

Changing a previous block will only invalidate the blocks that are coming after that one. For example. Changing a block that is 100 blocks old, will only invalidate the following 100 blocks and every new block that gets mined.

[Mauro]

@Arthimis_Vergult

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).

@travis_bazile

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 fee’s & inflation fee to produce a blockchain.

@ambous

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 don’t play by the rules their block will be dismissed by the network.

@Sebonacci

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

@Frederik

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 won’t have their block(s) accepted by the network and won’t have a return on the money/electricity spent.

@pmensonp

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.

@Kevin1

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

Don’t forget that this makes the network secure and immutable. If anyone wants to change the past blocks, they need to spend a lot of electricity to achieve a successful attack. (without block rewards)

[Mauro]

@moza8

2. He would have to confirm all the transactions again and the network would see that.

They can mine secretly. If someone is able to change something in the past and mine up to the current chain, their attack will be successful. (51% attack)

[Mauro]

@travis_bazile

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.

Changing a transaction in a block will invalidate all the blocks that come after it (not before). In order for the change to be appended as the truth, one would need to remine all the block again and catch up to the main chain. The only way to catch up is to be faster than everyone else. This is known as a 51% attack.

[Mauro]

@Dano

3. How does the network regulate mining difficulty?

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

No. The network regulates the difficulty with a difficulty target. The lower the difficulty target the more difficult it is to validate a block. A nonce is a simple field where miners put numbers. Adding random numbers in this field will generate hashes. Miners try millions of numbers here in order to get the hash that will be lower than the current difficulty.

[Mauro]

@ambous

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.

Changing a previous block will only invalidate the blocks that are coming after that one. The one before will still be valid.

[Mauro]

@underlanding

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 don’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).

@Christian_S

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

@MuffinGonzales

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

@zzzsoren

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

@satsdad

1.if they dont play by rules they wont get fee+reward=money

@AR1

1. it is important to make sure miners spend electricity while mining in order to keep them honest. If miners want to break rules, they will lose time and money. It is much more profitable for a miner to “play by the rules”

@Sebonacci

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

@Conrad_Swart

1. they need to invest/spend money to incentivize them to play by the rules, cause if they dont they wont make money

@Arvee8

1. Without incentive there is no motivation to try and achieve the block reward. By having already spent the miner has effectively pre-invested and is committed to achieving the result (block reward + Tx Fees)

@M9605

1. So that the incentive that you receive BTC rewards when you mine a block actually is a incentive.

@Gae_mon

1. It is important that miners spend money on mining so they have to play by the rule if they want to get profitable.

@Mimi

1. Since the miners have high energy expenses the incentives are a reward for the mining. It also ensure the miners follow the rules since cheating becomes unattractive considering the amount of money/energy and time it would require in order to succeed.

From the network point of view, it is important for miners to spend electricity as they provide the security and immutability in the blockchain. Miners put work behind their blocks. By doing the work they secure their blocks, as any change of its content will require the block to be remined again. (electricity needs to be spent again)

[Mauro]

@Christian_S

The higher the nonce the easier the puzzle is, vice versa.

“The higher the target the easier the puzzle is and vice versa.” A nonce is simply a field for a number that will change the block input and the hash that it will produce.

[CeesQ]

@ivan

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

to prevent them from changing transactions in previous blocks, as doing that would require to remine all blocks from there, costing huge sums of electricity (= disincentive)

@ivan

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

costs a lot of electricity + a lot of time (practically impossible)

@ivan

1. How does the network regulate mining difficulty?

based on the available hashrate (computer power on the mining network). If hashrate is too low, difficulty drops, if hashrate is too high dificulty rises

[Mauro]

@M9605

And since the biggest miners mostly use the latest and best technology to mine Bitcoin, it would be really difficult for yourself to have technology that is a lot more efficient than what the market already provides.

Well said.

[Mauro]

@Mimi

3. Difficulty is the measured based on the number of nodes that are mining.

It is based on the amount of hash power in the network.

[DFig]

it forces the miners to have skin in the game and the need to work for the reward so they can recoup cost

once a block is altered the previous hashes for all forward blocks will become altered and thus need to be re-mined

it adjust the difficulty by altering the target. the lower the targe is, the lower the probability that a random hash will fall within the range.

[CryptoDD]

1. Miners are rewarded when they follow the rules and if they don’t follow the bitcoin protocols they loose money spent on electricity.
2. It would take to long and a lot of money. The other miners would have mined more blocks and would have a longer block chain so chances are there block chain would not be recognized by the network.
3. The difficulty increases as the hash rate of the network increase. When this happens the target is lower and when the hash rate is low difficulty is low, target value is high.

[D3N1X]

1. If miners spending money on electricity they will more likely play be the rules so their investment goes to nothing.

2. Longest chain wins. It is not about just one block but it hast to be six or more blocks in the row. That means enormous inputs of electricity to have 51 procent hash rate but still it is risk.

3. By adjusting a target, which is Hash from Tx and previous hash. Final hash number has to be lower than a target.

[monymike]

1. Why is it important to make sure that miners spend money (on electricity) while mining?
   it is security for the blockchain. Cheating is not worth it (too costly to go back, change history then try to catch up with the other miners, almost financially and time impossible)so stick to the rules and get paid instead of spending trying to cheat
2. Why would it be very difficult for someone to go back change a previously added block?
   If you change the Tx in a block, you have to re mine (re hash) all the blocks puzzles and the targets are probably changed so it is financially and time impossible to catch up to the other miners before they reject your blocks. So you lost all that money on electricity and other costs.
3. How does the network regulate mining difficulty?
   If many miners trying to solve the nonce then the network sets a lower target so more difficult to solve and vice versa.

[Lane11]

1. Why is it important to make sure that miners spend money (on electricity) while mining?
   This is a concept of POW, miners spend electricity to get a block reward and tx fee. In that way, they are incentivized to follow a rule of POW (telling a truth).
2. Why would it be very difficult for someone to go back change a previously added block?
   Because if somebody change something in a previous block, then a next block will be changed too and all of the next blocks. Once when all nodes see changes in blockchain transactions (data) then the blockchain will be invalid.
3. How does the network regulate mining difficulty?
   Difficulty is a measurement of how many people are mining. Higher numbers of miners we have in a network then the difficulty is higher. A protocol ensures keep difficulty close to 10 mins per create a block (every 10 mins a block is created by miners).

[Aaron]

1. It is crucial that miners spend money to make sure they stay honest and a good amount too. If it was cheap too go back and change a tx Bitcoin wouldn’t work.

2. Changing previous block changes all blocks in front and therefore would have to mine all blocks again.

3. Network adjustes mining difficulty I believe every 2016 blocks to an average mine time of 10 minutes

[kidsmoney]

miners have to spend money to get their blocks in the chain so they can get rewarded. this is their proof of work.
2. You would have to re mine the block which takes a lot of comp power and money on your own . then you would have re mine all the blocks after that to catch up very expensive.
3.Changing difficulty of hash low number more difficult higher nunber easier.