Blockchain Essentials | Assignment – 1
QUIZ – 1 | BLOCKCHAIN ESSENTIALS AND DEVELOPMENT OF DApps
1. In Blockchain __________ tree stores all the transactions in a block by producing a hash of the entire set of transactions
2. Which of the following is not a blockchain component?
3. Blockchain is a peer-to-peer _____________ distributed ledger technology that makes the records of any digital asset transparent and unchangeable
4. Who introduced the digital online cryptocurrency known as Bitcoin?
5. What does a block in a Blockchain have?
Header & Digital ledger
Bitcoins & Input
Transactions & Bitcoins
Header & Transaction
6. A genesis block is ____________
Any block created by the founder
The last block created in the Blockchain
The first block of a Blockchain
The first transaction in each block
7. __________ receive verify, gather and execute transactions
8. Smart Contract characteristics do not include:
Fast and cost-effective
A high degree of accuracy
9. Hash identifying each block in the blockchain is generated using which of the following cryptographic algorithm
10. Which of the following statement is true about blockchain?
A blockchain is a decentralized, distributed, and oftentimes public, digital ledger consisting of records called blocks
A blockchain database is managed autonomously using a peer-to-peer network and a distributed timestamping server
A blockchain has been described as a value-exchange protocol.
All of the above
11. Which of the following statement is true about bitcoin?
There is no central server; the bitcoin network is peer-to-peer
There is no central storage; the bitcoin ledger is distributed
The ledger is public; anybody can store it on their computer
All of the above
12. The term used for Blockchain spilt is _____
none of the above
13. The five elements of blockchain are distribution, encryption, immutability, tokenization and:
14. Smart contracts are legally binding contracts
15. Which of the following industry can use blockchain technology for cybersecurity?
All of the above
Q1. Which features distinguish databases from blockchain ledgers? Provide a comparative analysis of the two.
Databases and blockchain ledgers are both types of data storage systems, but they have several key differences.
One of the main differences is that databases are typically centralized, while blockchain ledgers are decentralized. In a centralized database, there is a single point of control and access, while in a decentralized blockchain, there is no single point of control and every node in the network has a copy of the ledger.
Another key difference is that databases are typically designed for high-speed transactions and are optimized for fast writes and reads, while blockchains are optimized for security and immutability. In a database, data can be easily modified and deleted, while in a blockchain, once data is recorded in a block, it cannot be altered.
Additionally, databases are typically used for private data storage and management, while blockchain is often used for public data and the management of digital assets.
In terms of security, traditional databases are vulnerable to hacking and data breaches, while blockchains use complex cryptographic algorithms to ensure the security and integrity of the data stored on the ledger.
In summary, databases and blockchain ledgers are both data storage systems, but they have different characteristics and are typically used for different purposes. Databases are centralized, optimized for high-speed transactions, and are commonly used for private data storage. On the other hand, blockchain ledgers are decentralized, optimized for security and immutability, and commonly used for public data and the management of digital assets.
Q2. Explain how blockchain can be introduced in the education system to certify the credentials of candidate teachers and ascertain the security of the pupils’ personal data.
Blockchain technology can be used in the education system to certify the credentials of candidate teachers and to ensure the security of pupils’ personal data in the following ways:
- Digital Credentials: Blockchain can be used to create a secure and tamper-proof digital record of a teacher’s credentials, such as their educational qualifications, professional certifications, and work experience. This information can be stored on a blockchain platform and shared with schools and other educational institutions for easy verification.
- Secure Data Management: Blockchain can be used to store and manage sensitive data, such as pupils’ personal information, in a secure and transparent manner. Blockchain-based systems can provide secure and private access to the information for authorized parties only, such as school administrators and government officials.
- Learning Management Systems: Blockchain can be integrated with Learning Management Systems (LMS) to record student performance and progress. This can be used for tracking student’s achievements, and also for providing verifiable records of their education history.
- Digital Certificates: Blockchain can be used to issue and verify digital certificates, such as diplomas or degrees, which can be used to demonstrate the authenticity of the student’s education and qualification.
By implementing these blockchain-based solutions in the education system, educational institutions can ensure that they are hiring qualified teachers and that pupils’ personal information is protected, while also providing students with verifiable records of their education history.
Q3. How does blockchain technology prevent/ solve the problem of “Double spending” in digital currencies such as Bitcoin?
Blockchain technology is used to prevent the problem of double spending in digital currencies like Bitcoin by using a consensus mechanism called “proof of work.” This mechanism ensures that a digital currency can only be spent once by requiring a consensus among all nodes in the network that a particular transaction is valid.
The process works as follows: When a user initiates a transaction, it is broadcasted to the entire network of nodes. These nodes, called “miners,” then race to validate the transaction by solving a complex mathematical problem. The first miner to solve the problem gets to add the transaction to the blockchain, which is a public ledger of all transactions on the network.
Once a transaction is added to the blockchain, it cannot be altered or deleted. This makes it impossible for a user to spend the same digital currency multiple times because once it’s spent, the transaction is recorded on the blockchain and can be seen by all other nodes on the network. This mechanism ensures that digital currencies like Bitcoin are only spent once, preventing the problem of double spending.
It’s important to note that this mechanism not only ensures that the transactions are verified but also ensures the integrity of the network by making the network more resistant to tampering and fraud.
Q4. Suggest which type of blockchain should be used for the security of donations in a charity organization. What benefits does the blockchain technology introduce in such a scenario? Explain your answer using an example.
The best type of blockchain to use for the security of donations in a charity organization would be a permissioned blockchain, also known as a private blockchain. This type of blockchain allows for a restricted group of participants to access and validate transactions, making it more suitable for organizations that require a high level of security and control over the transactions.
One example of a permissioned blockchain that could be used for charity donations is Hyperledger Fabric. This blockchain platform allows for multiple organizations to join a network, each with their own unique identities and access controls. This means that the charity organization would have full control over who can access and validate transactions on the network.
The benefits of using blockchain technology in a charity organization include:
- Transparency: All transactions on the blockchain are recorded in a tamper-proof and transparent manner, which allows for easy tracking of donations and ensures that the funds are being used for the intended purpose.
- Traceability: Blockchain technology allows for the traceability of donations from the donor to the recipient, which can be helpful in tracking the impact of the donations.
- Cost savings: Blockchain technology can reduce the costs of intermediaries such as banks, which can be helpful for charity organizations that operate on a tight budget.
An example of how this can work in practice is: A charity organization that is focused on providing education to underprivileged children in Africa, can create a permissioned blockchain network and invite other organizations such as NGOs and government agencies to join the network. The charity can then create a smart contract that automatically distributes the funds to different schools based on the number of students enrolled. This ensures that the funds are being used for the intended purpose and also allows for easy tracking of the impact of the donations.
By using a permissioned blockchain, the charity organization can ensure that the funds are being used for the intended purpose, and also enables for the transparency and traceability of the donations which can help to build trust with donors and the community.
Q5. Analyse, using a diagram, how a distributed ledger works, present its main characteristics, and explain how it differs from a “traditional” centralized ledger.
A distributed ledger is a type of database that is spread across a network of computers. Each computer, or “node,” in the network holds a copy of the ledger and participates in its maintenance and updating.
The main characteristics of a distributed ledger include:
- Decentralization: There is no central authority controlling the ledger, making it resistant to failures or malicious attacks.
- Immutability: Once a transaction is added to the ledger, it cannot be altered or deleted, creating a tamper-proof record of all transactions.
- Transparency: Transactions are visible to all participants in the network, creating a transparent system.
- Consensus: A consensus mechanism, such as proof-of-work or proof-of-stake, is used to validate transactions and add them to the ledger.
- Smart Contracts: Some distributed ledger technologies also allow for the execution of “smart contracts,” which are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code.
The main difference between a distributed ledger and a traditional centralized ledger is that a centralized ledger is controlled by a single entity, such as a bank or government, while a distributed ledger is spread across a network of computers and controlled by a consensus of participants. This makes distributed ledgers more resistant to failures and malicious attacks, as there is no single point of failure. Additionally, a centralized ledger is typically closed system, while a distributed ledger is open and transparent.
In summary, a distributed ledger is a decentralized, transparent, and tamper-proof database that is spread across a network of computers. It is maintained and updated by a consensus of participants, rather than a central authority, making it more secure and resilient compared to a traditional centralized ledger.