- Why is it important to make sure that miners spend money (on electricity) while mining?
Since the miners already spent money on electricity, they are incentivized to follow the rules to get the reward. Otherwise, they run the risk of their transaction being rejected and wasting money on electricity without any rewards. - Why would it be very difficult for someone to go back change a previously added block?
Any changes would affect all future blocks. The miner would never catch up with the rest of the network. - How does the network regulate mining difficulty?
By miners having to use a target, only the hash that is below the target will be accepted by the network.
- Why is it important to make sure that miners spend money (on electricity) while mining?
It increases the hashrate (computer power) and secures the network: no censorship, no double-spend or alter the history.
- Why would it be very difficult for someone to go back change a previously added block?
First of all, it will require a lot of electricity to do so and the reward will not be enough to pay the bill. It is not worthy. Secondly, it will never catch up with the new block of the real chain just because or the diffitulty of solving the puzzle (it would take ages) so the malicious chain will never be the winner but the electricity bill would grow forever…
- How does the network regulate mining difficulty?
It is proportional to the hashrate: the more people are mining,the lower the target and the more difficult is to solve the “puzzle”.
- Why is it important to make sure that miners spend money (on electricity) while mining?
- It’s part of their business. By spending money on electricity miners have incentives to follow the protocol rules since they have a vested interest in the integrity of the blockchain to get paid for their work in verifying blocks
- Why would it be very difficult for someone to go back change a previously added block?
- Because the block in the blockchain carries a reference hash to the previous block. If someone wanted to change that previous block they would have to re-mine all subsequent blocks. Which is just not possible
- How does the network regulate mining difficulty?
- By using PoW. The target is low when mining difficulty is high. Essentially the more people mining Bitcoin the more difficult the problem to solve and verify each blocks gets
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Its important for miners to spend money on electricity because it is PoW. When spending money miners follow protocol for the incentives.
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It would be difficult for someone to go back and change a previous block because of the hash. Every single hash in the block chain will have to change, all while new blocks are being added to the chain and so on. Doing so will be costly.
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The more miners there are, the more difficult it is. The target to guess the nonce will be set low making it challenging to guess it right.
Homework on Mining and Proof of Work - Answers
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It is important for miners to spend money on electricity because it stays incentivize.
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It would be very hard for someone to go back and change a previous added block because the links will be invalidated.
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The network regulates mining difficulty by having a lot of miners which therefore lowers the target number.
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Why is it important to make sure that miners spend money (on electricity) while mining?
The incentive of earning BTC and deterrent of losing money is what keeps miners honest on the Blockchain. Spending money to do the work is only attractive if there is a reward that makes it worth while. And BTC is created such that the reward only comes if the work is honest. Hence the importance of spending money to mine. -
Why would it be very difficult for someone to go back change a previously added block?
It would be almost impossible as the knock on affect would be that each new block would then have to be re-mined individually to get the new corresponding hash accounting for each change. -
How does the network regulate mining difficulty?
The more miners there are, the lower the target will be which will reduce the probability of the target being found with any given mining attempt.
- Creates proof of work which rewards people for being honest
2)If you change a block it changes the hash function of the block which in turn changes all the blocks. This makes it invalid and is also expensive because you would need POW for the change you made.
- the more miners present the lower the target
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Miners making an investment in electricity is the incentive for them to recoup their investment and make a profit and keep integrity in the network.
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A transaction in the blockchain is considered to be written in stone, making a change invalidates the blockchain and it would take thousands of years to recreate a new puzzle.
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The network regulates mining difficulty through the target number by guessing the nonce. When the target number is low the difficulty is high.
- Why is it important to make sure that miners spend money (on electricity) while mining?
It is proof of work. They are paying electricity upfront in order to be able to participate for the prize: block reward + transaction fees. It is the incentive to keep miners trying to solve.
- Why would it be very difficult for someone to go back change a previously added block?
Every block is linked to the previous block by its hash. Therefore, after changing a block they would need to mine all the mempool transactions and recreate all links by themselves including all new transactions. This while the other miners keep mining the new transactions. The longest chain is always prioritized by the network. This means a lot of energy would be wasted without reward. Only with 51% or more ownership of the hash rate is it possible to catch up and become the longest chain. But it would take time.
- How does the network regulate mining difficulty?
Mining difficulty is regulated relative to hash rate of the network. At high hash rates the target will be lower therefore difficulty will be higher.
- Why is it important to make sure that miners spend money (on electricity) while mining?
They are incentivized to do the right thing and play fair with the network instead of trying to cheat transactions into future blocks. If they do this and are caught, the network will reject their work and the miner ended up wasting money on electricity and was not rewarded. - Why would it be very difficult for someone to go back change a previously added block?
Yes, this would invalidate that block and all blocks since then. The miner would have to work from the invalidated block all the way to the most current block to try and trick the system — meanwhile everyone else on the decentralised network is working with another branch of the chain and making it more and more difficult for the malicious user to catch up (impossible).
In order to do this, you would effectively need more mining power than 50% of the network.
- How does the network regulate mining difficulty?
Based on the hash rate. If the hash rate is high, the network will lower the target hash so that it is more difficult to guess it.
1-Miners must spend money because it gives them an incentive to recoup their expense. They want to recover their electricity expense and receive a bonus reward for solving block puzzle.
2-It is difficult to go back and change a block because all following blocks would become invalid and have to be remined. It is very difficult to play catch up if not near impossible. The beauty of BTC.
3-The network sets a target NONCE number lower when there are many miners. It sets NONCE number higher when less miners active. It is regulated in this fashion to keep the block propagation to every 10 minutes.
For the security of the network, once the miner expends money in electricity, they just would pay the costs of running a node if they do solve the puzzle of the next block, forcing them to follow the rules, so they can be rewarded.
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Because the hash function is a calculation of the previous block hash plus the data plus the nonce, so any change in the data would change the resulting hash, as well as a change in the previous block hash would change the result of the current block hash. And, once the miners calculate the longest chain, to catch up to the current longest chain would be unfeasible.
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The bigger the hash rate or more miners are competing against each other, the smaller the hash target it is, and so the more difficult it is, once the result should be smaller than the hash target, making it more difficult to solve the block puzzle.
- Why is it important to make sure that miners spend money (on electricity) while mining?
This is how PoW works. Miners spend time and resources and get rewards for their work. - Why would it be very difficult for someone to go back change a previously added block?
Because all blocks connected, and next block contains a hash of a previous block. changing a thing in a previous block will change everything in other blocks. - How does the network regulate mining difficulty?
Difficulty depends on hash rate. The more miners are involved the higher hash rate, and the higher difficulty. The higher difficulty, the lower target
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So that miners are incentivised to be paid by incentives as a return.
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Bitcoin network always look up to the longest chains. It will take too long time to calculate the hash of the previous block while other miners try to find the hash of the following blocks.
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Mining difficulty is regulated by changing the hash target depending on the total hash power.
If there is no cos to mining then everyone would do it
Makng retrospective changes would result in a chain reaction that would break the links between blocks
Network difficulty is changed according to the number of miners. more minors = more difficulty, it becomes self regulating.
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Why is it important to make sure that miners spend money (on electricity) while mining?
This incentives the miners to follow the rules which in turn provides security to the blockchain. -
Why would it be very difficult for someone to go back change a previously added block?
Each block is built on the previous block, so you would have to go back and mine each block from where you made the change and then catch up to the new block that have been confirmed. -
How does the network regulate mining difficulty?
The target depends on the number of miners on the network. The more miners on the network the lower the target will be making it more difficult to guess the target.
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It is important for miners to use electricity while mining because once they have invested resources into producing a block, there becomes an incentive to mine it properly. They are compensated for an accepted new block thus repaying the original investment of electricity spent.
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If someone was to attempt to change a past block, they would require a total of 51% of the entire network hash power in order to compute and recreate blocks at a faster rate than the network, the network always accepts the longest chain in a proof of work scenario because it has the most expended energy to create. This is not impossible but completely infeasible.
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The network self regulates mining difficulty by lowering the acceptable hash number to a smaller percentage of allowed numbers. This decreases the odds of selecting the correct nonce therefor requiring more hash power and increasing the difficulty of the mine.
- Why is it important to make sure that miners spend money (on electricity) while mining?
So that they have incentive to play by the rule. They need to spend a lot of electricity=money to mine. If they do so, they want to get their money back and make some profit. So they don’t want to risk mining invalid blocks that are not accepted by the network.
- Why would it be very difficult for someone to go back change a previously added block?
Because they need to remine that block and ALL following blocks because all the hashes have been changed.
- How does the network regulate mining difficulty?
The target time for mining a block is 10 minutes, according to the current speed, the mining difficulty will change. This is in essence a target value that any mined hashes need to be under. The higher the difficulty -> the lower the target value -> more guesses are needed before a valid hash is found -> more energy is consumed.
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If miners spend money on electricity, then they will want to be reimbursed by the rewards (block reward and transaction fees).
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When a block is changed, all the connections from that block forward are also changed. The hash changes on all the blocks from the changed block and forward, which means all the blocks will have to be remined.
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The network regulates mining difficulty by the number of miners on a network. The more miners there are on a network, the lower the target number that has to be guessed (nonce). The nonce has to be less than the target.
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That will not only make the miner want to play by the rules, but also make them need to. Because nobody has unlimited resources to play around with. The cost of electricity and the hardware itself (they are nowadays very expensive) makes this concept of mining work as an investment/asset. To recoup their initial investments in hardware and the cost of electricity they are going to need to get the reward and fees from the new block, which is only possible if they play by the rules.
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Because the blockchain almost works as a living organism, it will detect the changes and its body of blocks will signal to the upcoming blocks that someone is trying to change the input information. This is detected in the blockchain thru the hashes on each and every block that depends on a previous hash and is connected to the next block, no matter how small the change, it will be detected and corrected by the rules.
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The hashrate indicates the amount of actively mining hardware connected to the network, the mining difficulty is adjusted in proportion to the hashrate, by increasing or decreasing the range of nonce that will provide the hash needed for the next block, all and all this process equals approximately 10 minutes with the live current hashpower involved in the mining.