Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#142

1. Why is it important to make sure that miners spend money (on electricity) while mining?
By spending money the miners are incentivized to follow the mining rules and earn their money back and make more money

2. Why would it be very difficult for someone to go back change a previously added block?
It would be difficult to change a block because all blocks forward would thus be rejected would not fit in with the currently accurate and accepted chain - There is no incentive built in for changing a block.

3. How does the network regulate mining difficulty?
The network regulates difficulty by making the NONCE more difficult to find when there is more hashpower to find it. When there is less power to find the NONCE then it becomes easier to find. Rewards come from finding the NONCE

#144
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
  • Miners spend money on electricity to be incentivized and secure the network while doing so
  1. Why would it be very difficult for someone to go back change a previously added block?
  • Going back will change previous blocks, this would cost of a lot of electricity to do so and would not be incentivizing for the miner
  1. How does the network regulate mining difficulty?
  • The blockchain network will adjust according to the amount of people who are mining on the network
#145
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

If it would be cheap to cheat: malicious entities would try to cheat a lot by pushing invalid blocks with invalid transactions. Because it costs a lot of electricity to mine (and also it costs a lot in terms of infrastructure: one would need many super computers now, to compete with the other miners), it makes more sense to mine legit blocks than trying to hack the network.

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

Every block is linked to the hash of the previous block (all the previous block transactions + previous hash + nonce). If only one transaction is changed, the hash would be different, meaning that to change a previous block, all subsequent blocks would need to be mined again. In the meantime the network keeps mining new blocks, so in order to change something in the past, the power needed would be gigantic and this would be practically impossible.

  1. How does the network regulate mining difficulty?

The difficulty is adjusted by lowering the hash target (lowering the number) when more hashpower is available (when more computers, mining pools or super computers join the network). Because the result of the hash function is an unpredictable number, chances are that the results of hashing are distributed in a large scale, so to guess a lower number it’s more difficult.

#146

Bitcoin is a bunch of Nonce Cents…lol

  1. Miners don’t necessarily have to spend money on electricity…only to channel it into machines. That point aside… they would be wasting the electricity and time and effort if they produced malicious or incorrect data.
  2. To change a previous block all subsequent blocks would also have to be changed simultaneously just to change one character in it. All this would have to be done in about a 10 minute window as more and more blocks are produced.
  3. The target number is made larger as more hash power/miners are mining. To mine a block would be easy if you were the only one doing it.
    (I see a mathematical conundrum by using INFINITY, I think. 100 + INFINITY = INFINITY)
    So although the difficulty increases with the higher target number I don’t think it can go to infinity. So even if the target number increases by 100 (or whatever) the computers are still guessing from this infinite pool of possibilities. With this logic the difficulty is always equal. IDK if I’m explaining what I mean well, or if it even matters…but I think there must be some upper limit on the guessing NONCE game.
#147
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

If it was not costing a lot of money they could try to change the transactions in the past and fool the system. Because it costs money it’s better to them to stick to the rules and get the incentive by participating.

The more they spend money the more they want to follow the rules and earn the money back. It’s probably what’s keeps them going. They already put a lot of energy in the network so they better stay and get the incentive. Otherwise they could just start give up and let it go. They didn’t loose anything so they are more likely to quit and weaken the network.

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

Because every small change will change the hash of that block and then all the next blocks as well. So if he goes back in time to change a transaction in a block he will not only have to remine that block - he will have to re mine all blocks till it’s the longest chain of valid blocks and that demends 51% of the the network power to do.

  1. How does the network regulate mining difficulty?

The more computing power in the network - the harder the puzzle is. By putting the target number lower for the maximum block hash value according to the computing power increase (and vice versa)

#148
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

Bitcoin security model depends on honest miners and therefore the miners are incentivized to play by the rules because that is the only way they can earn back their money they spent on electricity and make more money by confirming transactions while preserving security of the network and gatekeeping the bitcoin value

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

If you change one block, all blocks forward would be rejected because they will not be cryptographically linked to the changed block so you would need to recreate proof of work for all blocks after the one you changed faster than original chain and become the longest chain. This would require that you have control of at least 51% of network’s all hash power

  1. How does the network regulate mining difficulty?

Mining difficulty is adjusted proportionally to the network’s hash rate in order to maintain approximately 10 minute for block generation time. The network adjusts difficulty by making the nonce (random hash) more difficult to find when there is more hash power and less difficult to find when there is less hash power.

#149

  1. Because there need to be a financial incentive. Those costs are for the miners and they want to earn it back and earn more by getting the block reward + tx fees. So let the miners spending money is essential.

  2. The longest chain is leading. Therefor changing a previously added block means that you have to re-mine the blocks between present and the changed previous block. With less than 51% of all the hashing power you won’t be able to win back this mining time by re-mining the blocks while you also have to create the longest.

  3. Blocks are created every 10 minutes. This is a constant. Therefore we need a variable which changes to get to that 10 minutes every block again and again. This variable is the difficulty.
    Than we have the ‘‘target’’, which is a value correlated to the difficulty. There miners are constantly hashing to get a hash below the given target, the blockchain controls the 10 minutes by putting this target lower for a high difficulty (many miners) and a higher target for low difficulty (less miners).

#150

  1. it gives them incentive to follow the rules, and not corrupting the blockchain.

  2. It would break off the blockchain and theoretically it would be possible to be able to double spend, but the cost would be astronomical. The longest chain is the on that is chosen, and you would be required to have at least 51% of the total hashing power of the entire system to be able to re-mine all the blocks between the one changed and the current one (and the other miners keep mining while you do this).

  3. By lowering the target, it makes it more difficult to guess the right nonce, thereby lowering the odds and making the miner guess more times ergo, spending more money/electricity.

#151

1 Spending money produces an incentive to get their money back. takes money to make money.
2 Changing any previous block will change all following blocks.
3 Network gets harder by making the nonce target smaller to hit.

#152
  1. Why is it important to make sure that miners spend money (on electricity) while mining?

It incentivises then to play by the rules of the protocol, and in doing so ensures the security of the blockchain, because they earn money from the mining process in the form of block rewards and fees.

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

A block is hashed by the miner. The hash is derived from the data in the block AND the hash of the previous block, AND a random number the miner has to find (the nonce).

It would require an immense amount of energy and time to re-hash to block, the subsequent blocks and links between the blocks.

The protocol will always choose the longest chain which by definition has the most proof of work. If you altered info in a block your have to re-mine all subsequent blocks, and then catch up with the other miners to again produce the longest chain,which would take thousands of years and an immense amount of energy.

It makes more sense financially to play by the rules, as you earn that way.

  1. How does the network regulate mining difficulty?

The more miners that are competing, the higher the difficulty. The higher the difficulty, the lower the target number they have to guess (the nonce). The guessed nonce must be lower than the target, which is statistically harder to guess, as the guesses are more likely to be HIGHER than that number.

The value of the combined hash must be less than a specified “target” number. The target depends on the difficulty of mining.

#153

helps secure the network
they would have to mine each and every block again
the more miners more difficulty keep the block time constant

#154

Mining and Proof of Work - Questions

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

This feature makes it costly to try and tamper with the blockchain in any way. Miners are incentivized to keep the network secure, otherwise they can spend all this time and resources just to have their block rejected (no reward) due to tampering.

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

If a previous block is changed in anyway, the hash for it and all subsequent blocks is changed, delegitimizing the altered blockchain. In order to make the altered blockchain accepted, you would have to remine all altered blocks and also surpass all new blocks mined by the network. This is impossible unless you achieve a hashrate of at least 51% of the whole network, which is essentially impossible in practice and only becomes more difficult as the network grows.

  1. How does the network regulate mining difficulty?

As the hashrate of the network increases, so does the difficulty, so that it takes roughly 10 minutes to mine a block.

#155
  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    Miners need to have a certain cost for proof of work can apply, it is the way the need of resources applies in the cycle.
  2. Why would it be very difficult for someone to go back change a previously added block?
    The subsequent links and blocks will have to change and it will need to much power, it is almost impossible
  3. How does the network regulate mining difficulty?
    By the target, more miners lower target, lower target more diddiculty
#156

Why is it important to make sure that miners spend money (on electricity) while mining?
The money/electricity is an investment. It means that you have to pay to mine, and that if you don’t follow the rules you lose the investment.
Why would it be very difficult for someone to go back change a previously added block?
It’s practically impossible because of the encryption, and even if you did you would have to also changed the following block, so you have to mine two blocks faster than everyone else mines one. It would also cost a lot more trying to reverse the chain, and if you have those resources its much more economically beneficial to play by the rules.
How does the network regulate mining difficulty?
The more miners the higher the difficulty. The network is set to regulate the difficulty so that a block is mined approximately every ten minutes.

#157

  1. Its important that the miners spend money because it can show a proof of work and to be rewarded to get out of the cost or to make profit.

  2. You would have to remind the other block which will take forever too do even tho its possible but again it will take forever.

  3. The difficulty will grow higher

#158
  • So they lose money if dishonest
  • They have to mine 2 blocks faster then everyone else mines 1.
  • The protocol lowers and raises the difficultly to keep blocks as close to 10 mins apart as possible.
#159
  1. Miners have incentives to follow the rules since they are vested in the mining process.
  2. Previous block will be altered and links will be broken
  3. The difficulty to guess the nonce is increased by lowering the target.
#160
  1. Makes the network secure and by following the rules of the protocol (proof of work) new blocks are created.
  2. It changes the hash and the link
  3. The difficulty is adjusted by changing the target. More miners mining higher difficulty.
#161

Question 1

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

The reason it is important that miners spend money in the game is to ensure they have a stake in winning. the prize.

Question 2

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

The reason it would be difficult is because if someone went back in the block and changed some value in a particular block the hash of that block would change. Also the hashes of the subsequent blocks would also change so a malicious person would need to not only change one block but also all subsequent blocks and also catch up with the network to validate their change.

Question 3

How does the network regulate mining difficulty?

Mining difficulty is regulated in the following way.

  1. The more miners the higher the hash rate the lower the target in guessing the nonce+tx+ prev hash
  2. The less miners the lower the hash rate the higher the target in guessing the nonce+tx+prev hash
#162
  1. This way Miners have incentive to follow the integrity of protocol and make more money.
  2. Because when you do change a previous block it changes the hashes from existing blocks and destroys the links between each connecting block. It’s a chain reaction.
  3. The higher the difficulty the lower the target and the lower the target the higher the amount of miners.