Homework on Mining and Proof of Work - Questions

Blockchain and Bitcoin 101
#42

1 to keep them interested in earning money

2 because it always changes the next blocks

3 difficulty raises with hashing power (the more miners, the more difficult)

#43

To keep the whole system together. To make money you play by rules.

Every following block has to change too, it would draw extremely much energy. The longer the chain is the more difficult it becomes to do go back and change the system.

When there are more miners the network lowers the difficulty target.

#44
  1. to prodect against fraud
  2. because you have to remain all the following blocks and also the new mined blocks from the longest chain
  3. if the hashrate raise then the difficulty raise. It is regulated with the target where you have to find a hash less or equal the target. the higher the difficulty the lower the target
#45

Homework on Mining and Proof of Work - Questions

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    -Incentives. They will lose money if being dishonest.
  2. Why would it be very difficult for someone to go back change a previously added block?
    -They would need to mine new blocks faster than everyone else.
  3. How does the network regulate mining difficulty?
    -Network tries to keep the blocktime in 10 minutes so the more miners there is in the network the more difficult it gets and vice versa.
#46

  1. It is important to make sure miners allocate resources on mining that are at stake if you break the rules to incentivize “fair play.”

  2. It would be very difficult for someone to change a previously added block because they would have to rehash that block as well as all successive blocks.

  3. The network regulates mining difficulty by narrowing the output of the hash after the nonce is guessed when there are lots of miners and broadening the acceptable output when there are less miners.

#47

  1. Because by burning through their electric bill gives the miners an incentive to play by the rules. If they mine and secure the network, they get rewarded. If they try to alter the blockchain, they waste energy and money. It pays to be fair.

  2. Because while you make alterations to one block and mine subsequent blocks, the other miners who DO play by the rules will make good progress mining new blocks and they will get ahead of you. Besides the mining difficulty will shoot up and all the potential energy and money spent on altering the blockchain will be wasted.

  3. The miners have to guess the nonce and the hash of the nonce has to be lower than the set target. This target is altered and adjusted ( lowered ) in order to make sure that guessing the hash of the nonce is more and more difficult. This way miners have to pay a bigger cost upfront with their power and hardware in order to achieve the same results. This is decentralization in action.

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#48

Homework on Mining and Proof of Work - Questions

  1. Why is it important to make sure that miners spend money (on electricity) while mining? In order for miners to make money, they must play by the rules. By having upfront electricity charges, it gives miners incentive to recoup their expenses by mining honestly. If the miner doesn’t mine honestly, they will not be paid and will lose money. As long as miners play by the rules they make money.
  2. Why would it be very difficult for someone to go back change a previously added block? It would be almost impossible to go back and alter history because the block is continuously moving to a new block about every ten minutes. You cannot double spend. To try and go back to construct a previous block is almost impossible because the previous blocks would have to be changed which takes time and more electricity.
  3. How does the network regulate mining difficulty? The fewer the miners, the greater the difficulty. It’s all based on targets. The difficulty is based on the hash rate. The network chooses the longest chain with Proof of Work.
#49
  1. To create negative incentament for not following the rules.
  2. Because then it would be two versions of the block and the network is following the longest blockchain. In order to add previously block the miner would have to mine faster then the blockchain is created (More than 50% of the Hash rate)
  3. The more miners that are mining, the lower will the hash-target be for adding new blocks.
#50
  1. To assure that miners follow the rules of the network and don’t try to do illegal activities otherwise they will have their block invalidated and wasted a lot of energy($).
  2. To do so would be needed to mine the entire block changed and its following blocks before a new block is created which would take too long and too much computer power. This activity would be impossible.
  3. The Mining difficulty is regulate trough a system call Target which means that more miners in the network results in a lower Target more difficult to be reach and harder to mine new blocks.
#51

It will incentify them to want to make money. If they spend money upfront
they have to recoup there cost and more. This also secures the network.

Because one change effects the entire chain and will cause it to be discarded and
cost money instead of making money.

By determining the target of solving a puzzle by mining.

#52
  1. As a way to ensure they are working by the rules. Otherwise it becomes very costly.
  2. Because blocks will be added time after time. Before someone ques the puzzle to link the block again, many blocks have been added. Rule is; longest chain of blocks is valid.
    3.Mining difficulty is regulated by the nonce. (a changing random number addedto make the final hash of the block.
#53

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    1.it is costing the miners a lot of money so they will play by the rules. There is no gain in cheeting.

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

  3. You break the link in the chain if anything is canged in a block, the previous,the next and following blocks too.

3, How does the network regulate mining difficulty?
3. The target is made low when the difficulty (many people is mining) is high, making the nonce harder
to guess. when less minors working the nonce is easier to guess because the target is high

#54

Why is it important to make sure that miners spend money (on electricity) while mining?
Because they will be incentivized to continue mining to pay back their costs and to make a profit.

Why would it be very difficult for someone to go back change a previously added block?
If a previously confirmed block is changed, the hashes of that block and all subsequent blocks would change, requiring that they all be mined again. This may take a very long time for a single miner to complete.

How does the network regulate mining difficulty?
The block hash must be below a target number. This target decreases as more miners participate, making mining more difficult, which adjusts for the higher supply of miners.

#55
  1. It incentives miners to play by the rules. If they will cheat- there block will not get accepted to the pool and all this money wasted on electricity will be lost
    2)It will require too much electricity and computing power, because he will be required to create new links to all blocks in front of the changed one + catch up with the blockchain, since blockchain prioritizes the longest chain of blocks.
  2. More miners = lower target number
#56
  1. So they can play by the rules and not try to cheat, because if they try to cheat they will lose money they have spent (on electricity) while mining.
  2. It would be very difficult if not impossible for someone to go back to change a previously added block because all the other blocks will disagree. For it to happen he or she will have to contact all the millions of other blocks that have been created to also update their blocks.
  3. When there is mining difficulty, the reward becomes low, and many miners will drop. Then after some time the difficulty reduces again when there are fewer miners.
#57

1.Miners spend money so the upfront cost will incentives them to keep them playing by the rules, bad actors will always lose this upfront costs

2.It is difficult to change previous added block as this block is based on the previous block hash

3.mining difficulty is regulated by difficulty adjustment, the hash of the new block
previous block + TX + nonce must be below target value, as increase in target value the easier to mine the value

#58

  1. Why is it important to make sure that miners spend money (on electricity) while mining?
    It ensures the integrity of the blockchain by making sure that miners follow protocol in order to claim the block reward and their associated transaction fees. If they break the rules they will not be able to add blocks to the blockchain and will therefore be financially penalised.

  2. Why would it be very difficult for someone to go back change a previously added block?
    If any previous block is tampered with, (i.e. attempt to remove a transaction record), it will invalidate the hash of that block and break all subsequent links and blocks. The offending miner would then need to unilaterally mine all those blocks again which, given that the blockchain is continually updated every 10 minutes with the addition of new blocks, would be energy and time costly and therefore unfeasible. Whilst is possible for a miner to achieve this by gaining control of 51% of the network, it has been estimated that this would require enough energy to power a large city for more than a week and is therefore not economically viable.

  3. How does the network regulate mining difficulty?
    A new target number is generated every 10 minutes and is based on the number of miners on the network. The more miners there are, the lower the target and corresponding difficulty level. Miners continually guess a new hash until it is lower in value than the target to enable their block to be added to the blockchain.

#59

  1. It intensives people to follow the rules. It could also be argued that it gives bitcoin value as it takes work and investment to keep it operational

  2. Because it takes enormous amounts of power to rewrite the block chain and if you had that it would make more sense to just play by the rules and profit that way

  3. The protocol lowers and raises in difficulty to keep the blocks being produces every 10mins or so

#60
  1. to incentivize a reward and prevent corruption like trying to create a fake transaction.
  2. Because each block is linked and they would have to re-mine all the proceeding blocks again plus blocks that are being mined at the time.
  3. With nonce guessing a random number the more miners there are the more difficult it is.
#61

1. Why is it important to make sure that miners spend money (on electricity) while mining?
Because by making this initial investment, they have an incentive to follow the rules in order to get the block reward and transaction fees.

2. Why would it be very difficult for someone to go back change a previously added block?
Because its hash would change and therefore the hash of the next block as well destroying the links between the blocks. For one person to recreate new links is theorytecally feasible but practically impossible.

3. How does the network regulate mining difficulty?
By lowering the target mining becomes more difficult.