INTRODUCTION TO BLOCKCHAIN | BLOCKCHAIN ARCHITECTURE AN DESIGN [ 1. What is blockchain distributed ledger? Blockchain is one type of a distributed ledger. Distributed ledgers use independent computers (referred to as nodes) to record, share and synchronize transactions in their respective electronic ledgers (instead of keeping data centralized as in a traditional ledger 2. What is the difference between distributed ledger and blockchain? The most important difference to remember is that blockchain is just one type of distributed ledger. Although blockchain is a sequence of blocks, distributed ledgers do not require such a chain. Furthermore, distributed ledgers do not need proof of work and offer — theoretically — better scaling options 3. Is bitcoin « distributed ledger? Underlying distributed ledgers is the same technology that is used by blockchain, which biteoin uses as its distributed ledger. A distributed ledger can be described as a ledger of any transactions ox, contracts maintained in decentralized form across different locations and people How are distributed ledgers . different than traditional ledgers? Bere independently of a m faster and more ledgers, The fact that Distributed ledgers operate central authority. This makes the: flexible than traditional centralized |KER ron cn _ Seca ross al] | Blockchain Architecture mirrored ared with minimum, Bioakeftaisd way that makes or cheat the sys ledger of transa across the enti ally a digital ledger of plockchain. esenti A blockchain is covet and distributed across the ‘s duplicated an - transactions that is en 4 atoms on the blockchain, 10. pee entire network ot eof DLT in which transactiOoe om } ychain is a ature calla ay with an immutable cryptographic signa’ One typit are privacy is arour ae awareness of ¢ the wallet to se Gog (DLT) is a digital can be visible t Distributed ledger techn cyctem for recording the transaction of assets in which the [TL What isabl transactions and their details are recorded in multiple fo c places at the same time. Unlike traditional databases, Protocol: Gistribated ledgers have no central data store’ 08 technologies administration fuictionality automatically reliably. In tt rules that di) . ' between diffe Blockchain is decentralized and hence there is no central place for it to be stored. That's why it is stored in 12. How secur computers or systems all across the network. These % What are digital ledgers? 7. Where is the blockchain ledger? systems or computers are known as nodes. Each of the nodes has one copy of the blockchain or in other words, the It's | transactions that are done on the network. decentraliza transactions ledger tech blocks and privacy in blockchains is the use of fapapction keys. Blockchain systems use A key aspect of Private and public Why is blockchain @ ledger?GE orca eet rrored across all jared with minimum a digital ledger of gistributed across the § as on the blockchain, ; thich transactions are raphic signature called [a ig OLD is a digital] pn of assets in which the} re recorded in multiplel ‘e traditional databases) central data store OF and hence there 48 1° that's why it is stored i 1 the network. as nodes. Each of in or in other words, vetwork. Jockchains is the use ‘ckchain systems te transactions betwee! has a public and privat 1 security and proted Blockchain Architecture aa Blockchain is a system of recording inform makes it difficult or impossible to change, hack ty cheat the system. A blockchain is essentially a die Jedger of transactions that is duplicated and distributed horess the entire network of computer systems on the blockchain. To. What are the issues concern with privacy and security on blockchain? One typical area of concern with blockchain data privacy is around digital currency wallets and users! lack of ewareness of data privacy risks such as when renaming the wallet to something personal such as a password which can be visible to everyone on the public blockchain. ee Ui. What is a blockchain protocol? Protocols are crucial components of Blockchain technologies that enable information to be shared automatically across cryptocurrency networks securely and reliably. In the field of computing, protocols are essentially rules that define how data is allowed to be transferred between different computer systems. 12. How security is implemented in blockchain? Its based on principles of cryptography, decentralization and consensus, which ensure trust in transactions, In most blockchains or distributed ledger technologies (DLT), the data is structured into blocks and each block contains a transaction or bundle of transactions. 18. What is the primary purpose of blockchain support data privacy? Blockchain's primary purpose is to only be used by a single organization, thus supporting data privacy. A. Blockchain’s primary purpose is to limit which organizations receive data.EG ro = SS RRUCA Blockchain Ar te Sates he i ey? oon protect privacy? : TA. How does Bitcoin P a an important, empowering technology. account with a pseudonym protects yoy | 18. Wha Synonymous on the internet. It allow 1s fundraising. Groups cq, Blocke id. choose to eithes Biteoin is Using a Bitcoin right to remain anon} seudonymou | Biteoin accounts, an formation at will. anonymous or Pp collectively contro! hide or reveal financial in! 15. How is consensus reached in blockchain? Tt requires a p: de to prove that the wor done and submitted by them qualifies them to receive the right to add new transactions to the blockchain. However this whole mining mechanism of bitcoin needs high energ, consumption and a longer processing time. 16. What do you know about Blockchain? What is the difference between Bitcoin blockchain and Ethereum blockchain? 19. The blockchain is a decentralized distributet 1 database of immutable records. ‘The technology ws on discovered with the invention of Bitcoins (the fst 8 cryptocurrency). It's a trusted approach and thee > om are a lot of companies in the present scenario whichar ©) alts using it. As everything is secure, and because its a2 ” ©pen-source approach, it ‘can easily be trusted in the a Jong run. Ok Biteoin Blockchain and Ethereum Blockchaln “ Topics [__Ethereum | [29 yy, mere VitalikButerin Genesis Block Mined Th Bitcoin(Satoshi) Ether eaaae the best Ethash with each 12-14 Seconds 4 WWha te the technology is b 21. Blocke} differ fi Principle on which blockchain jased on?. 7 KEIM ron mcg | _Blockchain Architecture (As) It enables the inform: formation to be distributed among RE; the users without being copied protects, Your. ret. Tt allo we, Groups can Blockchains are of three types Dose to either a 18._What are the different types of Blochchaine? what the work to receive the tin. However, s high energy (Figure) 19. Why is Blockchain a trusted approach? (1) Blockchain can be trusted due to so many reasons. (2) _ Its compatibility with other business applications due to its open-source nature. y (8) , Its security. As it was meant for online transactions, ‘tio whicl the developers have paid special attention to keeping up the pace when it comes to its security. (4) It really doesn’t matter what type, of business - one owns, Blockchain can easily be onsidered |] 20. Name the two types of records that are present in the blockchain database. These records are block records and transactional records, Both these records can easily be accessed, and the best thing is, it is possible to integrate them with each other without following the complex algorithms. 21. Blockchain is a distributed database, How does it differ from traditional databases?ansactions 2 phase commi ntegrity Constraints ror ene e —— in? eet oe4 —<———rnc properties of Blockchain DOD Se Wher are Four Key Features of Blockchain : There are 4a) Decentralized Systems see ti id ledger (2) Distribute ; Sat Minti pe How does a b @ = Minting approach? What is encryption? What is its role iy 23. Wha Blockchain? Data security always matters. Encryption is basieg 7 their az approach that helps organizations to keep thein gy —————— in a block Private key => abs is, ‘Asymmetric algorithm’ i Public key | iam i (Figure) The encrypted data is encodi extent before it is sent out of a n only authorized Parties can ac Blockehain, more to the overal helps to keep the; led or changed up to s@7. What are Bloc etwork by the sender a “9 cess that information. . ae this approach is useful because it simply ad e2der h 7 : a ll security and authenticity of blocks 8. Is it possible iy m secure, block from the Yes, it can specific portion ¢chain Architecture wan Blockchain consists of a list of rec are stored in blocks. These blocks are in turn fink’ other blocks and he Blockchain, constitute a chain Constraints, ——— 125. How does a block is recognized in the Blockchain approach? Every block in this online ledger basically consists of a hash pointer which acts as a link to the block which is yas heal prior to it, transaction data and in fact a stamp.of time : nee” eas etee eaten teep their, Ts it possible to modify the data once it is written ‘ ina block? No, it’s not possible to, do so. In case any modification is required, the organization simply has to erase the information from all other blocks too. It is because of no other reason than this, data must be given the extreme care of while using this approach. What are Block Identifiers? aged up to $C the sender In Blockchain, blocks can be identified by the block information. header hash and the block height. 2 it simply 4 . f Is it possible in Blockchain to remove one or more block from the networks? Yes, it can be done. There axe times when only a specific portion of this online ledger is to be considered.SEEM ror! his can e Jockchain Architect Lon Also, it specific trar download tk of this tree {A8] alt opt Jot of efforts. With the help of 4 tbe done without making 4 about the security of q do you know 29, What exactly block? check the | re “Kor the entire blockchain 1 protected (relevant t Wall, a block or the entire Blogs "block has | ia se stographic hash algori a strong eryptographic Bin 2 in the blog _in this bloel e y fication etque bash pointer. Any modi tbe junigruents will result in the change in the hash identify Warae i conine block. Therefore, it offers an excellent level @®* Piece about the safety ail ledger? curity. Thus, one needs not to worry eetlas the security of data that is present in a block Block intentionec 30. What are Merkle trees? How important are Merkle trees in Blockchains? | a ; Merkle Tree also known as ‘hash tree’ is a dak structure in cryptography in which each leaf nod of a block of data, 0 ee pa beck and each non-leaf node is a hash of i Bese Bleak Block 18 Proves] [Tmesamo]|_ Ir rev Hash] [Tinesamp —|[Preetiosh] [Timestann Taro] [Cree Root | [nonce TeRoot | [Nonee ] a Meri Tt s sAs sce wighansciniillaitibninolaes Also, if someone needs to verify the existence ee specific transaction in a block, then he doesn’t have to download the entire block. Downloading a set of a brancl of this tree which contains this transaction is enough. v check the hashes which are just going up the branc! (relevant to my transaction). If these hashes check out Blockchain Architecture ock hg good, then we know that this particular transaction exist he bi in this block. identig level , a ledger? Is Blockchain an incorruptible Blockchain is considered incorruptible. Any ill- intentioned individual acting alone is powerless. “To take over the network, an attacker would have to control. more than 50 percent of its total computing power,” Augier explains. “We hope that's a theoretical scenario, but we can’t be sure. Should it happen, the individual would take every precaution to avoid being noticed.” Not to mention the energy required to power the computers needed for the blockchain system to work. 32. Name the common type, of ledgers that can be considered by users in Blockchain? Distributed Network How is : ji i Pa eeekehain, ledger different from ain Archit fact the prime differend ger that can be entraling of error in this aPPTogd in an ordinary ledger. 4 is prepared by han ws) aos yg. pret ert itt | atocrona The ee a digital led Rlockehain is e wr eantlys THE CHATS are far ieee than a oe ¢ ary r is Ww! at a odin an efforts while the Blockehain Perfo or Te tasks automatically. Yor just need £0 config wean a proper manner BP by following all th guidelines. “as can be kept in a Blockchaing same? What type of reco! Is there any restriction O” There is no restriction on keeping records of any type in the Blockchain approach. Industries are using Blockchain for securing all types of records. "The common types of records (to name a few) that cay be kept on the Blockchains are : (1) Records of medical transactions (2) Identity management (3) Transaction processing (4) Business transactions, (3) Management activities (6) Documentation 35. Can You explai) ‘plain the com, i Boe : iponents of Blockchain ae : blocks Following are the 2 components of blockchain Ecosystem : NODE APPLICATION ; Each Nade have to install and run a compute 38. ba SHARED LEDGER application defini a A definitive t sever ste ’ wish fo pariipate in, eee spi sre conde mtte mig bea oe i reat ing the bitcoin walletBlockchain Architecture 36. A distributed digital ledger is used for recording transaction in Blockchain. What does the system rely on? ‘The system relies on the network servicing protocol and the nodes of the network. 37. State difference between proof-of-work & proof-of- stake? ‘Takes more snergy than The probatityof mining a Proof of Stake block depends on the amount ‘of work a minor oes iStaeahciers valiiato new ‘The first example of Proof of Auser would need own a blocks by uz ther share Stake was Peercoin major ofall coins in order sccies on the network altack the network 38. Name some popular platforms for developing blockchain applications After the development of bitcoin, various blockchain platforms started coming up. Ethereim came right the evolution of Bitcoins, and is one of the popular » platforms for building Blockchain based cations. hen there is a Hyperledger community for enterprise-based solutions. Also, Qtum, 1OTA, yme of the widely used platforms, for buildingMEG -on mL ee iy Oem possible to double ouble Spending? Ie it Blocke hain system? one digital toker jf the token generall ily be cloned. | What is Dr spend in a Tes a condition when epent multiple, times because consists of @ digital file that can eas simply leads to inflation and organizations must bear, huge loss, One of the primary aims of Blockchai, technology is to eliminate this approach up to the possibh extent. Blockchain prevents double spending by confirming; transaction by multiple parties before the actug See is written to the ledger. It's no exaggeration t s tiny Be en of bitcoin’s system of Blockchain ee caeans difficulty ete, exist to produce thi Bs ot ‘ions that is computationally impractica 40. ‘Can ‘you tell me 6 3 Seip lagtaoMialsertinves. of the widely used Blowfish PSAs a pub. EQ Gow Sede Sendo ctvchioen teiate c Soi mctaged ls Bae 6 yoting data sent over the intemet bits and eneyps them individually Like blowfish, twofish symm lechnique wih bo length 288 ne Uses keys of anyday ene a 256 bts ft Tegke DES) __ aes Se casiin acneacur a pau pani Security of in attacking @) Brute (2) Mathe are ut effort lis of a messi resulting the origin digital sig Blir related p different systems 43. What in Blo It digital for sam divides and se1 T a part agree sever: techn72. Explain the significance of blind signaty fern tal Coe (Figure) Security of R.S.A. : There are dif in attacking the RSA algorithm : (1) Brute Force: It involves all possible secret keys @) Mathematical Attacks : n mathematical attack, we ‘are using different techniques, which is similar in ‘effort to factor the product of two primes fferent approaches used re and how it is useful. It is a form of digital signature in which the content (blinded) before it is signed. The of a message is disguised of iting blind signature can be publicly verified against the original, unblinded message in the manner of @ regular digital signature. Blind signatures are typically employed in privacy: related protocols where the signer and message author are different parties. Examples include cryptographic election systems and digital cash schemes. 43. What is Secret Sharing? Does it have any benefit in Blockchain technology? It is a well-known fact that security matters a lot in digital transactions. Secret sharing is an approach meant for same. In Blockchain technology it is an approach that divides secret or personal information into different units and sent them to the users on the network, ‘The original information can only be combined when a participant to whom a share of the secret is allocated agree to combine them together with others. There are several security-related benefits it can offer in Blockchain technology.iam the movement is While an Ons P mply ‘a transact value usually re! transaction validity ‘ the transaction determine its other methods to reco! know about executiy , do you Does Biockchain support the same? othing but a special type exclusively for a busiy to the people. There is no strict up, da business can manage &ny throy ting, Blockchain has algorithms @ andle executive accounting. In f lems that are associated with| Hive accounting 18 n s designed Execut: accounting which i that offers services limit on services ant the executive accoun' 7 © are specially meant to h it cut down many probl same. What are the threats to i is the information familiar with? : 7 ES en zn onslts are lots of threats to information in the prese oe zee dnenetze 2 online transactions over t net, ers have be BS come active al adopting new approaches to hack information and node. sistent. lity of entral » PoW 'n the 's will ction. 8 like — of-Reputation. Unique Node Lists (UNL) ; 4 trusted cubsnetworks" eameonna i, os sf “Unique Node Lists” (UNL) to deal with high latency, hice usually characterizes BFT‘tolerant systems. ‘To reach consensus, a node requires to ask its own UNL in place of the entire network. This mechanism allows less than one- fifth of its nodes being faulty. : Proof-of-Burn (PoB) : In Proof-of-Burn, rather than spending money on expensive computer equipment, you ‘burn’ coins by sending them to an address where they are unrecoverable. You can earn a lifetime privilege to mine on a system based on a random selection process. Miners can burn the native currency or any currency of an alternative chain. The more number of coins you burn, the chances are high that you will be selected to mine the next block. If your stake in the system fails, so eventually, you will want to burn more coins to increase your odds of being selected for the next block, PoB is a good alternative for PoW, although the protocol wastes resources. Slimcoin is the only coin who uses Proof-of-Burn, Slimeoin uses a combination of PoW, PoS, and PoB. A fof-Activity. (PoA) : PoA was invented as an tive incentive structure for Bitcoin miners. This co both PoW&PoS. In PoA, miners start with a PoW approach to solve the’ puzzle. If the blocks mined don't contain any transactions, the system switches to Po8.group of validators together the self-auditing ecosystem of Block Chain network. Even ii ven in the event of some nodes failing away or ming unreliable, there should be unanimous eptance of the transaction: we nsé ee actions between the nodes for a es ere are the advantages of having a Consensus helps in Bh F lock Chain luine transactions, ‘be updated with true and eyents any single no baNenrk de becoming strong and This Suarantees that th a jockehain Bro or owns go information, block. If assigned t0 f eat eae? to be chosen. As 8007 8 aly : | coin, he has t ie Sen the template becomes look a the aA failed to complete the block, fe new grou, Te the validator a chosen, a this process 20€S op of validators or eives the correct ‘amount of signatures ¢ wi ey fron divided between the miner, and th, oA Rewards 9 4 requires #00 auch energy like PoW, Pog a the only com uaing Proof-of-Activity fog ve it NOW. Saat (Po) 2 This conseneH® algorithm mechanism is different from others. Here you pay for your hard disk space. The more hard disk space you have, the chances are high that you will mine the next block & earn cowards. Before mining in a PoC, the algorithm generates a4 a large number of data sets known as ‘plots’, which you ae are your hard drive. The more number of plots you aa have, you have better chances of finding the next block. To aut use this mechanism, you have to spend a lot on hard drive ch: pace. Burstcoin is the only eryptocurrency to use a form of va proof of capacity. a : is fe pe ene: ces mato is'a set of rules which describe a4 Reserves Chon tle he cecal lock Chain technology, the P protocol is defined wi : > consensus with specific rules that, majori t nodes agree to the same state of at, majority of | e of Block Chain and keep ;exchain Architecture — i 18.15) ‘ays a sin, gle Bl y followed by all the nodes ofthe networins eo etwork, pecentralized Ledger there is alw: (Figure : Decentralized Led: Crypto cur ai gen) ee ais chain against attacks, every crypto Pe iE ee Br rency should hav way of securing its Block Chain. As there is no aa ae pieces the verification of the Block aa aanethe ae is confusion as such which is the which have more than 51% Consensus are added to the longest block chain of the network. That makes it clear that the longest block chain is the most verified one which has passed through the - Consensus Protocol. One more attractive aspect of the Consensus protocol is, that the nodes which verify and add a block to Block chain will get the rewards and incentives. In case of Bitcoin, a miner (node) who verifies and adds the plock to the block chain will get 12.5 Bitcoins as the reward. This is how most of the cryptocurrencies are mined. This is extremely lucrative for the miners who compete to confirm the next block using all their computational power. This is how the difficulty of the hash puzzles is increased by the network and makes it difficult to double spend 4 crypto currency. The Consensus Protocols vary according to the Block Chain within which they are ing the blocks. To conclude we have to say, ~ Gonsensus Protocols hold a key position in helping a Block Chain to exist and function. 3 e : < : 5* Protocol is one of the most importan, teh, +3 makes the Block chain network a f001 proop Bidar is the revolutionary protocol that makes the _chain network an irrefutable system where the majority of devices (nodes) connected to the network agrey on each and every transaction. This prevents exploitation of the system as more than 51% consensus is required ty create a new block. It is the core of the Block Chain which, makes it certain that the information stored on the Block Chain is accurate and honest. aspects th: 0 1 2 a 4 2 (Figure) The very core of the Nakamoto’s Block chain consensus protocol is, they keep the nodes of the distributed, decentraljzed network in sync with each other. Because this is a digital ledger, anyone can submit their transactions. It is the very important to review those transactions to rule out the possibility of same bitcoin spent more than once. 41. What is the difference between Proof-of-work and Proof-of-stake? ; The main differences between the Proof of Work and Proof of Stake are : Proof of Work : Proof of Work(PoW) algorithm is used to confirm the transaction and creates a new block to the chain, In this algorithm, miners compete against each * other to complete the transaction on the network. The Blockchain Arct soo process defines reward probler Proof nodes transa stake, detert stake trans thous work 42. Ex; way of t] few Q @Blockehain Architecture 16.17) other is called mining. It calculation. In this, a who solves each blocks ‘0S algorithm, a set of cryptocurrencies for the called ‘stakers,’ | of a new block ie fae stake, the creator deterministic ties be asi Ga oe depending on its wealth. Tes d fined le s ot give an: ' jtaka Oe ceatbedions Gay y block reward, so miners take the Proof-of-Stak: 8 ake can be several thousand times more cost-effective as com are roof of pared to proof 42. Explain Types of Consensus Mechanisms, While proaf-of-work powers the two largest cryptocurrencies-Bitcoin and Ethereum- it's not the only way to run a cryptocurreney network. The most important of the types of consensus mechanisms used today fall into a few main types : (1) Proof-of-Work : With proof-of-work, miners compete against each other: to validate the next transaction block and earn a reward. This is a highly energy-intensive consensus mechanism but brings a high degree of trust. (2) Proof-of-Stake : Proof-of-stake (PoS) is a consensus mechanism wherein those with the largest holding of the network’s currency validate new blocks. This enables faster and lower-cost transactions, It rewards those with the biggest stake in the network for continued participation. : (3) Proof-of-Authority + Proof-of-authority is not as common but has a unique form. It is used mainly by private companies or organizations that use blocks vreated by vetted sources who have special permissions to access the network, Assurances es Fased on reputation and authority rather than public consensus as with other mechanisms.