Mining & Consensus Mechanisms Flashcards

What is the primary function of Proof of Work (PoW) in a blockchain network?

Answer: To require miners to solve computationally difficult puzzles to validate transactions

Proof of Work requires miners to expend computational energy solving cryptographic puzzles, which secures the network and validates transactions.

What is the primary purpose of cryptocurrency mining?

Answer: To validate transactions and add new blocks to the blockchain

Mining validates pending transactions and adds them to the blockchain ledger while also creating new cryptocurrency as a block reward.

What does 'hash rate' measure in cryptocurrency mining?

Answer: The speed at which a miner can generate cryptographic hashes per second

Hash rate measures computational power by counting how many hash calculations a miner or the entire network can perform per second.

What is a 'nonce' in the context of cryptocurrency mining?

Answer: A random number miners adjust to find a valid block hash

A nonce is an arbitrary number miners iterate through to find a hash output that meets the network's difficulty target, making each mining attempt unique.

Which consensus mechanism did Ethereum adopt following 'The Merge' in September 2022?

Answer: Proof of Stake (PoS)

Ethereum transitioned from Proof of Work to Proof of Stake in The Merge, dramatically reducing network energy consumption while maintaining security.

What is a mining pool?

Answer: A group of miners combining computational resources to increase the chance of finding a block

Mining pools aggregate computational power from many miners, increasing the probability of finding a block and sharing rewards proportionally to each member's contribution.

What is a 'block reward halving' in Bitcoin?

Answer: When the newly created Bitcoin awarded per block is reduced by 50%

Bitcoin's halving event reduces the block subsidy by 50% approximately every 210,000 blocks (~4 years), controlling Bitcoin's total supply and inflation rate.

In Proof of Stake, what primarily determines a validator's probability of being chosen to propose a new block?

Answer: The amount of cryptocurrency staked as collateral

In PoS, validators are selected with probability proportional to their staked amount, replacing the computational power competition of Proof of Work.

What is 'slashing' in Proof of Stake networks?

Answer: Penalizing validators by destroying part of their stake for malicious or dishonest behavior

Slashing is a penalty mechanism that destroys a portion of a misbehaving validator's staked cryptocurrency, deterring double-signing, equivocation, and other attacks.

What is Delegated Proof of Stake (DPoS)?

Answer: A consensus mechanism where token holders vote for delegates who validate transactions on their behalf

DPoS allows token holders to elect a limited set of delegates (block producers) who are responsible for validating transactions, improving throughput at the cost of some decentralization.

Which foundational computer science problem does blockchain consensus primarily aim to solve?

Answer: The Byzantine Generals Problem

Blockchain consensus mechanisms were designed to solve the Byzantine Generals Problem — achieving reliable agreement among distributed parties who may be unreliable or actively malicious.

What is a 51% attack?

Answer: When a single entity controls over half the network's consensus power and can manipulate recent transactions

A 51% attack occurs when an entity gains majority control of a network's consensus power, enabling double-spending and selective transaction censorship.

What distinguishes ASICs from GPU mining rigs in cryptocurrency mining?

Answer: ASICs are purpose-built for specific algorithms and are far more power-efficient than general-purpose GPUs

ASICs (Application-Specific Integrated Circuits) are custom-built chips optimized for a single mining algorithm, delivering significantly higher efficiency and hash rate than general-purpose GPUs.

How does Bitcoin's difficulty adjustment mechanism work?

Answer: Difficulty adjusts every 2,016 blocks to maintain a target average block time of 10 minutes

Bitcoin recalibrates mining difficulty every 2,016 blocks (approximately every two weeks) to maintain the target of producing one block every 10 minutes on average.

In Proof of Authority (PoA), who is authorized to validate transactions and produce blocks?

Answer: A set of pre-approved validators with verified real-world identities

PoA relies on a limited set of trusted, identity-verified validators, trading decentralization for high throughput and efficiency, common in permissioned enterprise blockchains.

What does 'finality' mean in the context of blockchain consensus?

Answer: The guarantee that a confirmed transaction cannot be reversed or reorganized out of the chain

Finality refers to the irreversibility of confirmed transactions; once achieved, a transaction is permanently recorded and cannot be undone by any network participant.

What is the primary environmental criticism directed at Proof of Work mining?

Answer: PoW mining consumes massive amounts of electricity, contributing significantly to carbon emissions

PoW mining's competitive hash computation requires enormous and continuous energy consumption, leading to substantial carbon footprints — particularly when powered by fossil fuels.

What is the 'mempool' in a blockchain network?

Answer: A waiting area holding unconfirmed transactions broadcast to the network before block inclusion

The mempool (memory pool) holds pending transactions that have been broadcast to the network but not yet selected by miners or validators for inclusion in an upcoming block.

What is 'Nakamoto Consensus' as established in the Bitcoin protocol?

Answer: Bitcoin's rule that the chain with the greatest cumulative proof of work is always the valid canonical chain

Nakamoto Consensus establishes that all nodes accept the chain representing the most accumulated proof of work as the authoritative record of transaction history, resolving forks deterministically.

What is an 'orphan block' (also called a stale block) in the context of mining?

Answer: A valid block that was excluded from the main chain because a competing block was accepted first

Orphan blocks are validly mined blocks that arrive at nodes after a competing block at the same height has already been accepted, making them irrelevant to the canonical chain.