Blockchain

1) Who created Bitcoin? – Satoshi Nakamoto

2) Where do you store your cryptocurrency? – Wallet

3) What is a miner?
a) A type of blockchain
b) An algorithm that predicts the next part of the chain
c) A person doing calculations to verify a transaction
d) Computers that validate and process blockchain transactions

4) A blockchain is a distributed ledger on a peer to peer network

5) A decentralized application is a computer application that runs on a distributed computing system. DApps have been popularized by distributed ledger technologies such as the Ethereum Blockchain, where DApps are often referred to as smart contracts.

6) Forking implies any divergence of the blockchain into its own separate branch (new code path).

There are two types of forks: Soft and Hard Forks.

A soft fork is when the new branch of the blockchain is backward compatible. This means that nodes can rely on data and logic from the old branch when they process transactions on the new branch.

A hard fork is when the new branch is not backward compatible and the branch will not work with the existing blockchain so the new fork is split into its own separate chain.

7) A nonce is an abbreviation for “number only used once,” which is a number added to a hashed—or encrypted—block in a blockchain that, when rehashed, meets the difficulty level restrictions. The nonce is the number that blockchain miners are solving for. When the solution is found, the blockchain miners are offered cryptocurrency in exchange.

8) Cold storage (aka cold wallets) means generating and storing the crypto coin’s private keys in an offline environment, away from the internet.

9) What Is a Block Reward
Bitcoin block reward refers to the new bitcoins that are awarded by the blockchain network to eligible cryptocurrency miners for each block they mine successfully.

10) Genesis block – the first block of a blockchain.

11)  Ethereum Gas is a unit that measures the amount of computational effort that it will take to execute certain operations.

Every single operation that takes part in Ethereum, be it a transaction or smart contract execution requires some amount of gas.

Miners get paid an amount in Ether which is equivalent to the total amount of gas it took them to execute a complete operation.
Ethereum Gas – is the lifeblood of the Ethereum ecosystem, there is no other way of putting that.

12) Public Key Cryptography or in short PKI is also known as asymmetric cryptography. It uses two pairs of keys – public and private. A key is a some long binary number. The public key is distributed worldwide and is truly public as its name suggests. The private key is to be strictly held private and one should never lose it.

The PKI accomplies two functions – authentication and the message privacy through encryption/decryption mechanism

13) The most popular PKI algorithms are RSA and ECDSA, Bitcoin uses the latter one.

14) Which site run by Ross Ulbricht was closed by the FBI for letting people buy drugs with Bitcoin? – Silk Road

15) One of the most important function in PKI is the hashing function. A hash function maps the data of any arbitrary size to data of fixed size. Bitcoin uses SHA-256 hash function that produces a hash (output) of size 256 bits (32 bytes).

16) Open Ledger : Chain of transactions that is open and public to everyone

17) Miners are special nodes in the network that validates and adds transaction to the open ledger.

18)
Sign(Message, sk) = Signature
Verify(Message, Signature, pk) = T/F

SHA256(Message) = 100111…. (Hash or Digest)
where,
sk : secrete/private key
pk: public key
SHA256 : hash function

19) A transaction is valid only if it is signed.
A block is valid only if it has proof of work.

20) What are the different types of Blockchains?
The different types of blockchains which introduce to the world are:

There are mainly three types of Blockchains introduced to the world.

1. Public Blockchain

A Public blockchain is a kind of blockchain which is “for the people, by the people, and of the people.” There is no in-charge it means anyone can read, write, and audit the blockchain. It is an open-source, distributed, and decentralizes public ledger so anyone can review anything on a public blockchain. They are considered to be Permissionless blockchain.

2. Private Blockchain

A Private blockchain is a private property of an individual or an organization. It is controlled by a single organization that determines who can read it, submit the transaction to it, and who can participate in the consensus process. They are considered to be permissioned blockchain.

3. Consortium Blockchain or Federated Blockchain

In this blockchain, the consensus process is controlled by a pre-selected group, i.e., group of companies or representative individuals. These pre-selected group is coming together and making decisions for the best benefit of the whole network. Such groups are also called consortiums or a federation that’s why the name consortium or federated blockchain.

21) Each block of a blockchain consists of
a) A hash pointer to the previous block
b) Timestamp
b) List of transactions

22) Bitcoin is based on public blockchain.

23) In blockchain, blocks are linked backward to the previous block.

24) The primary benefit of immutability is Increased efficiency.

25) Blockchain forks can result in multiple children blocks.

26) RSA is an asymmetric encryption algorithm.

27) What is Blockchain?
A Blockchain is a constantly growing ledger(file) that keeps a permanent record of all the transactions that have taken place, in a secure, chronological, and immutable way. It can be used for the secure transfer of money, property, contracts, etc. without requiring a third-party intermediary like bank or government.

Blockchain is the backbone of the most famous cryptocurrency named Bitcoin. It is a peer to peer electronic cash system and a decentralized network which allows users to make transactions directly without the involvement of third-party to manage the exchange of funds.

28) What is the difference between Bitcoin blockchain and Ethereum blockchain?

We can see the basic differences between Bitcoin blockchain and Ethereum blockchain in the below table.

Points	Bitcoin Blockchain	Ethereum Blockchain
Founder	Satoshi Nakamoto	Vitalik Buterin
Release Date	9 Jan 2008	30 July 2015
Release Method	Genesis Block Mined	Presale
Usage	Digital Currency	Smart Contracts
Cryptocurrency Used	Bitcoin	Ether
Algorithm	SHA-256	Ethash
Blocks Time	10 minutes	12-14 seconds
Scalable	Not yet	Yes

29) What are the types of records that are present in the blockchain database?
There are two types of records in a blockchain database.

a) Transactional Records
b) Block Records

30) List the key features of blockchain?

The essential properties of a blockchain are:

1. Decentralized Systems
2. Distributed ledger
3. Safer & Secure Ecosystem
4. Fast
5. Low Transaction Fees
6. Fault-Tolerant
7. Minting

31) How does Blockchain differ from relational databases?

The blockchain differs from the relational database in the following ways.

Points	Blockchain	Relational Database
Unit of data	Block	Table
Failure	None	Can happen
Centralized Control	No	Yes
Modification in data	Not Possible	Possible
Single Point of Failure	Does not exist	Exists

32) Name some popular platforms for developing blockchain applications.

Some of the popular platforms for developing blockchain are:

1. Ethereum
2. Hyperledger Sawtooth
3. Quorum
4. Ripple
5. R3 Corda
6. Qtum
7. IOTA
8. EOS

33) What is Consensus algorithm?

The consensus algorithm is the method of gaining consensus on a change of data over the system or distributed network. Consensus algorithms are heavily used in blockchains as they enable the network of unknown nodes to reach consensus on the data that is being stored or shared through the blockchain.

34) What are the types of consensus algorithms?

There are many types of consensus algorithms or techniques available. The most popular consensus algorithm is:

• Proof-of-Work(PoW)
• Proof-of-Stake(PoS)
• Delegated Proof-of-Stake(DPoS)
• Proof-of-Authority(PoA)
• Proof-of-Elapsed Time(PoET)
• Byzantine Fault Tolerance

35)  What is the difference between public and private key?

The private key is used to encrypt or lock a message or transaction which is sent on the blockchain network. The sender can send a message using the public key of the receiver. On the other hand, the receiver can decrypt the message or the transaction using his private key. By using the private and public key, the communication or transaction is kept safe and tamper-proof.

36) What is a 51% attack?

The 51% attack on a blockchain network refers to a miner or a group of miners who are trying to control more than 50% of a network’s mining power, computing power or hash rate. In this attack, the attacker can block new transactions from taking place or being confirmed. They are also able to reverse transactions that have already confirmed while they were in control of the network, leading to a double-spending problem.

37) Solidity is the most preferred languages for writing blockchain programs as of now.

38) Is BlockChain centralized or decentralized?
Ans: BlockChain are centralized as well as decentralized as opposed to the popular belief that BlockChains are decentralized. Private or centralized BlockChain mechanism has restricted entry to make changes to the ledger whereas in public or decentralized BlockChain anybody can have access to the ledger(Bitcoin, Ripple etc.)

39) Why ECC is better than RSA?
Ans: ECC and RSA both algorithms work on the principle of asymmetric encryption.In asymmetric encryption, there is a public key for encryption and private key for decryption. ECC is better than RSA because it provides equivalent security for a much lesser key size which makes ECC faster and more secure.As for equal key size, ECC would be more secure than RSA.

40) Which of these facts about a ledger is NOT CORRECT?
A. A ledger is used purely for the reporting of cash
B. A ledger consists of transactions, often governed by contracts
C. A ledger is a system of record
D. A ledger describes the inputs and outputs of a business.

41) Which benefits of a BlockChain enabled business network engender TRUST?
A) Efficient, dynamic, cognitive, and reliable
B) Consensus, provenance, immutability, and finality
C) Modern, ideally suitable for digital transformation, and social-enabled
D) Scalable, reliable, secure, and maintainable

42) What is bitcoin?
A) A technology that underpins Hyperledger Fabric
B) Another name for BlockChain
C) An unregulated censorship resistant shadow currency
D) A private network

43) The primary benefit of immutability is …
A) Scalability
B) Tamper-proof
C) Improved security
D) Increased efficiency

44) A smart contract is …
A) Business rules implied by the contract embedded in Block Chain
B) A cognitive contract
C) A legal contract is written in constrained English
D) None of these

45) The hash size for the MD5 algorithm is 128 bits

46) Hash tree is also known as Merkle Tree.