45 Questions
What does blockchain technology make unalterable and transparent?
Any digital asset
What is the analogy used to understand blockchain technology?
Google Doc
What is the number of bits in a nonce?
32-bit
What is the purpose of a nonce?
To generate a block header hash
What is the definition of Blockchain?
A peer to peer distributed ledger forged by consensus, combined with a system for smart contracts
How many blocks make up a chain?
Multiple blocks
Who released a white paper on 'What is Blockchain and How it works' in 1991?
Stuart Haber and W. Scott Stornetta
What is distributed when we create a document and share it with a group of people?
The document's copy
What was developed by Satoshi Nakamoto in 2009?
A distributed ledger, cryptocurrency/Electronic Cash System, Bitcoin
What are the three critical ideas of blockchain technology illustrated by the Google Doc analogy?
Decentralization, cryptographic hashing, and transparency
What percentage of financial institutions had adopted blockchain technology by 2020?
77%
What is the characteristic of the hash generated by the nonce?
It starts with a huge number of zeroes
What was the main motivation behind the creation of Blockchain?
To eliminate the need for third-party intermediaries
What is a characteristic of Blockchain?
Peer to peer distributed ledger
What is the purpose of miners in blockchain technology?
To mine blocks
Who created a platform for creating smart contracts in 2015?
Vitalik Buterin
What was collaboratively founded by IBM & Linux foundations in 2017?
Hyperledger
What are the blocks in a Blockchain linked using?
Cryptography
What is Bitcoin primarily classified as?
A cryptocurrency
What is the main aim of Bitcoin?
To simplify and increase the speed of transactions without government restrictions
What is Blockchain primarily used for?
To provide a low-cost, secure, and safe environment for peer-to-peer transactions
What is the scope of Blockchain?
More open to changes and has backing of many top companies
What is the strategy of Bitcoin?
To reduce the cost of influencers and reduce transaction time
What is a key difference between Bitcoin and Blockchain?
Bitcoin is limited to currency transactions, while Blockchain can transfer anything
What is a characteristic of Bitcoin?
It likes to be anonymous
What is a requirement for Blockchain?
It should have compliance with KYC and other norms
What is an advantage of Blockchain over Bitcoin?
It is more flexible and can be adapted to different industries
What is the purpose of mining in a blockchain?
To create a new block on the chain
What is the purpose of the Merkle root hash in a block?
To provide a cryptographic hash of all transactions in the block
What is the purpose of the 'nBits' in a block?
To provide the current difficulty of the block
What makes it difficult to manipulate blockchain technology?
The requirement of enormous amount of time and computing power
What is the main characteristic of a blockchain system?
Decentralized, secure, safe, trustworthy, and transparent
What is the role of nodes in a blockchain network?
To maintain copies of the blockchain and keep the network functioning
What is an example of a consensus protocol?
Proof of Work (POW)
What is the consequence of making a change to any block earlier in the chain?
All of the blocks that come after the changed block need to be re-mined
What is the reward for miners when they successfully mine a block?
The miner is rewarded financially
What is the term for the process of linking blocks together?
Block Chaining
What languages can be used to write programs for blockchain?
Any language, including C++, Python, and Solidity
What is the significance of the 'golden nonce' in blockchain technology?
It is the accepted nonce that generates an accepted hash
What type of system does blockchain technology represent?
Decentralized system
What is the consequence of decentralization in a blockchain network?
No one computer or organization can own the chain
How do blocks in a blockchain reference each other?
Using a cryptographic hash
What is the characteristic of the nonce in blockchain technology?
It is 32 bits
What is the term for the header of a block?
Block Header
What is the benefit of transparency in a blockchain ledger?
Every action in the ledger can be easily checked and viewed
Study Notes
Blockchain Definition and History
- Blockchain is a peer-to-peer distributed ledger forged by consensus, combined with a system for smart contracts.
- In 1991, Stuart Haber and W. Scott Stornetta released a white paper on blockchain.
- In 2009, Satoshi Nakamoto released a white paper and developed a distributed ledger, cryptocurrency, and electronic cash system called Bitcoin.
- In 2015, Vitalik Buterin created a platform for creating smart contracts in Ethereum.
- In 2017, IBM and Linux foundations collaborated to create a platform for creating smart contracts in Hyperledger.
- By 2020, nearly 77% of financial institutions had adopted blockchain technology as part of an in-production system or process.
Blockchain vs. Bitcoin
- Bitcoin is a cryptocurrency, while blockchain is a ledger.
- The main aim of Bitcoin is to simplify and increase the speed of transactions without government restrictions, while blockchain provides a low-cost, secure, and safe environment for peer-to-peer transactions.
- Bitcoin is limited to currency transactions, while blockchain can transfer anything from currencies to property rights to stocks.
- Blockchain is more open to changes and has the backing of many top companies.
Blockchain Structure and Concepts
- Blockchain consists of three important concepts: blocks, nodes, and miners.
- Each block has three basic elements: data, a nonce, and a hash.
- Miners create new blocks on the chain through a process called mining, which involves solving an incredibly complex math problem to find a nonce that generates an accepted hash.
- Nodes are electronic devices that maintain copies of the blockchain and keep the network functioning.
- Block metadata contains version, previous block header hash, Merkle root hash, time, and nBits.
Consensus Protocols
- There are several consensus protocols, including:
- POW: Proof of Work
- POS: Proof of Stake
- DPOS: Delegated Proof of Stake
- POA: Proof of Authority
- POC: Proof of Capacity
- PoET: Proof of Elapsed Time
- POD: Proof of Deposit
- POB: Proof of Burn
Blockchain Technology
- Blockchain technology makes the history of any digital asset unalterable and transparent through decentralization and cryptographic hashing.
- A simple analogy for understanding blockchain technology is a Google Doc, where a document is distributed instead of copied or transferred, creating a decentralized distribution chain.
- Blockchain is a secure, safe, trustworthy, and transparent system that is the future of all applications in the next 20 years.
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