Podcast
Questions and Answers
What are sidechains designed to do in relation to the main blockchain?
What are sidechains designed to do in relation to the main blockchain?
Which platforms are known for establishing a 'network of networks' for cross-chain interoperability?
Which platforms are known for establishing a 'network of networks' for cross-chain interoperability?
What role do oracles play in cross-chain interoperability?
What role do oracles play in cross-chain interoperability?
How do bridges function in the context of blockchain networks?
How do bridges function in the context of blockchain networks?
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What is one key feature of decentralized exchanges in the context of cross-chain operations?
What is one key feature of decentralized exchanges in the context of cross-chain operations?
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What type of data is primarily stored on-chain in blockchain systems?
What type of data is primarily stored on-chain in blockchain systems?
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Which of the following storage options is considered free when providing data hosting?
Which of the following storage options is considered free when providing data hosting?
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Which type of blockchain is characterized by having multiple designated validators?
Which type of blockchain is characterized by having multiple designated validators?
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What is a major disadvantage of public blockchains?
What is a major disadvantage of public blockchains?
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Which of the following statements is true regarding private blockchains?
Which of the following statements is true regarding private blockchains?
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Which of the following is a use case for public blockchains?
Which of the following is a use case for public blockchains?
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What storage cost is associated with Storj for data storage?
What storage cost is associated with Storj for data storage?
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In which blockchain scope are open and transparent applications most effectively utilized?
In which blockchain scope are open and transparent applications most effectively utilized?
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What is a primary benefit of using a private blockchain?
What is a primary benefit of using a private blockchain?
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Which of the following use cases is best suited for a consortium blockchain?
Which of the following use cases is best suited for a consortium blockchain?
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What is a disadvantage of private blockchains compared to public ones?
What is a disadvantage of private blockchains compared to public ones?
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Which blockchain structure allows for non-conflicting transactions from uncle blocks?
Which blockchain structure allows for non-conflicting transactions from uncle blocks?
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What does the Greedy Heaviest-Observed Sub-Tree (GHOST) method increase?
What does the Greedy Heaviest-Observed Sub-Tree (GHOST) method increase?
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Which feature does a public blockchain primarily provide?
Which feature does a public blockchain primarily provide?
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Which of the following characteristics is associated with Block Directed Acyclic Graph (DAG)?
Which of the following characteristics is associated with Block Directed Acyclic Graph (DAG)?
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What is a key drawback of private blockchains?
What is a key drawback of private blockchains?
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What was one of the innovations introduced by CryptoKitties in 2017?
What was one of the innovations introduced by CryptoKitties in 2017?
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Which of the following statements about the NFT minting process is true?
Which of the following statements about the NFT minting process is true?
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What is one of the challenges associated with NFTs, as mentioned in the content?
What is one of the challenges associated with NFTs, as mentioned in the content?
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In the context of NFTs, what does the term 'uniqueness' refer to?
In the context of NFTs, what does the term 'uniqueness' refer to?
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What does 'NFT Interoperability' refer to in the context of challenges?
What does 'NFT Interoperability' refer to in the context of challenges?
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What does the NFT workflow begin with for an owner?
What does the NFT workflow begin with for an owner?
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Which platform allows users to buy and sell digital moments from basketball games?
Which platform allows users to buy and sell digital moments from basketball games?
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What is a significant aspect of NFT value mentioned in the content?
What is a significant aspect of NFT value mentioned in the content?
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What problem does a mutex address in smart contracts?
What problem does a mutex address in smart contracts?
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What is the primary purpose of incorporating an emergency stop functionality in a smart contract?
What is the primary purpose of incorporating an emergency stop functionality in a smart contract?
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Which smart contract problem does the speed bump solution aim to solve?
Which smart contract problem does the speed bump solution aim to solve?
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What is the function of a rate limit in a smart contract?
What is the function of a rate limit in a smart contract?
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Which of the following is a challenge associated with the use of non-fungible tokens (NFTs)?
Which of the following is a challenge associated with the use of non-fungible tokens (NFTs)?
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What can be a potential future application of NFTs as blockchain technology matures?
What can be a potential future application of NFTs as blockchain technology matures?
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Which smart contract design pattern addresses the need for improving security against unauthorized access?
Which smart contract design pattern addresses the need for improving security against unauthorized access?
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What can be a consequence of failing to implement patterns like mutex or emergency stop in a smart contract?
What can be a consequence of failing to implement patterns like mutex or emergency stop in a smart contract?
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What is the primary function of the gossip protocol in Hedera hashgraph?
What is the primary function of the gossip protocol in Hedera hashgraph?
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How does Segregated Witness (SegWit) affect transaction size in blocks?
How does Segregated Witness (SegWit) affect transaction size in blocks?
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What key benefit does cross-chain interoperability offer?
What key benefit does cross-chain interoperability offer?
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What was a significant consequence of the disagreements over SegWit upgrades?
What was a significant consequence of the disagreements over SegWit upgrades?
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Which aspect do most Layer 1 blockchains lack in terms of cross-chain interoperability?
Which aspect do most Layer 1 blockchains lack in terms of cross-chain interoperability?
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What does the 'Gossip about Gossip' consensus algorithm do?
What does the 'Gossip about Gossip' consensus algorithm do?
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Which of the following correctly describes the two parts of a transaction in SegWit?
Which of the following correctly describes the two parts of a transaction in SegWit?
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What does cross-chain interoperability help to create in the overall blockchain ecosystem?
What does cross-chain interoperability help to create in the overall blockchain ecosystem?
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Study Notes
IS4302 Blockchain and Distributed Ledger Technologies - Week 8
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Intended Learning Outcomes:
- NFTs: Define, use cases, creation, trading
- Smart Contract Security: Identify risks, implement security patterns
- Blockchain Protocols: Compare models, understand consensus
- Interoperability: Define, evaluate solutions, cross-chain challenges
- Challenges: Recognize issues, plan for future developments
Overview
- Non Fungible Tokens (NFTs)
- Smart Contract Design Patterns (Security)
- Blockchain Protocols Design Patterns
- Interoperability
What Are NFTs?
- Definition: Unique, non-interchangeable digital assets stored on a blockchain.
- Each NFT has a unique identifier.
- NFTs represent ownership of digital or physical items (art, music, collectibles, virtual real estate).
- Key Blockchain: Ethereum blockchain using the ERC-721 standard.
Trading NFTs
- Buying and Selling: NFTs are bought and sold on decentralized marketplaces (e.g., OpenSea, Rarible).
- Ownership transfer is secured by the blockchain, ensuring a tamper-proof transaction history.
- Smart Contracts in Trading: Smart contracts facilitate transactions by executing predefined terms (e.g., transfer of ownership and payment).
- Royalties: Some NFTs are programmed to pay creators royalties every time the NFT is resold.
NFT Use Cases
- Art and Collectibles: Digital artists sell unique works directly to buyers.
- Gaming: Players own in-game assets and can trade or sell them.
- Virtual Real Estate: Platforms allow users to buy, sell, and build on virtual land.
- Music and Entertainment: Musicians release limited-edition albums or concert tickets as NFTs.
NFTs
- CryptoPunks: One of the first NFTs on Ethereum, created more than 10,000 collectible punks.
- CryptoKitties: Introduced gamification and hit the market in 2017.
- NBA Top Shot: NFT trading platform for digital short videos of NBA moments.
An example workflow of NFT system
- NFT Digitize: NFT owner checks and digitizes data.
- NFT Store: Raw data stored in an external database, or on-chain.
- NFT Sign: NFT owner signs a transaction and sends it to a smart contract.
- NFT Mint&Trade: Smart contract receives the transaction; minting and trading begins.
- NFT Confirm: Minting process completes when the transaction confirms.
Value of NFT
- Liquidity
- Uniqueness
- Social value
- Speculation
Challenges
- Usability Challenges: Slow confirmation, high gas prices
- Data inaccessibility: Cryptographic hash instead of a copy.
- Legal pitfalls
- Taxable Property issues
- NFT Interoperability (cross-chain)
NFTs Overview
- Unique Ownership: NFTs establish and verify ownership of digital assets.
- Technological Foundation: Built on blockchain and smart contracts.
- Challenges Ahead: High gas fees, environmental impact, and legal ambiguities need to be addressed.
- Future Outlook: NFTs will likely expand into new industries (finance, identity, virtual worlds).
Overview
- Non Fungible Tokens
- Smart Contract Design Patterns (Security)
- Blockchain Protocols Design Patterns
- Interoperability
Mutex (Mutual exclusion)
- Problem: Re-entrancy attack.
- When a contract calls another, the called contract can re-enter and manipulate the caller's state
- Solution: Utilize a mutex, preventing re-entry during critical segments.
Emergency Stop
- Problem: No option to halt a deployed contract's execution.
- Solutions: Implement emergency stop functionality that authenticated parties can trigger to disable sensitive functions.
Speed Bump
- Problem: Simultaneous sensitive tasks by many parties can lead to contract downfall.
- Solution: Prolong the completion of sensitive tasks to prevent fraudulent activities.
Rate limit
- Problem: Request rush hinders contract performance
- Solution: Regulate task execution frequency within a time period.
Balance Limit
- Problem: Risk of contract compromise due to bugs.
- Solution: Limit the maximum amount of funds at risk within a contract
Cross-Chain Interoperability
- Importance: Wide proliferation of chains, desire to move assets, interface with web2 databases.
- Benefits: Customizable Web3 services, allows "mix-and-match" features, creates a more decentralized ecosystem.
- Layer-1 and Layer-2: Lack features for cross-chain interoperability.
- Sidechains: Separate networks with their own consensus, security, and tokens.
- Polkadot and Cosmos: Designed for cross-chain infrastructure solutions.
- Oracles: Chainlink and API3 feed off-chain data to blockchain smart contracts to ensure common source of truth.
- Bridges and Swaps: Enable ownership locking and minting on different chains.
Decentralized Exchanges (DEXs)
- Platforms for trading cryptocurrencies not controlled by centralized entities.
Summary
- Non-Fungible Tokens (NFTs): Unique digital assets, use cases in art, gaming, and virtual real estate.
- Blockchain Protocols: Enhance performance and efficiency (GHOST, SegWit, BlockDAG).
- Smart Contract Design: Focus on security, implement patterns to prevent attacks (Mutex, Emergency Stop).
- Interoperability: Cross-chain solutions (Polkadot, Cosmos), linking different blockchains.
Data Structures
- Blockchains, GHOST, BlockDAG, Segregated Witness (SegWit)
Blockchain Scope
- Public: Free entry
- Consortium: Designated validators, used across organizations.
- Private: One designated validator
Blockchain- Original Design
- Consensus guaranteed by the longest chain heuristic approach.
Blockchain Trilemma
- Decentralization: The system runs with participants having limited access to resources (e.g., regular laptops).
- Scalability: The system that can handle a large volume of transactions.
- Security: Security against attackers using limited resources.
Greedy Heaviest-Observed Subtree (GHOST)
- Concurrent work allowing for shorter inter-block times.
- Blocks that refer to uncle blocks.
- The heaviest branch considered valid.
Block Directed Acyclic Graph (DAG)
- Non-conflicting transactions from uncle blocks are incorporated in the main chain.
- Selection rules can choose from heaviest subtree or longest chain.
Segregated Witness (SegWit)
- Separates signatures (witnesses) from the input fields of blocks.
- Reduced transaction size leading to more transactions per block.
- First implemented in Litecoin, then Bitcoin.
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Description
This quiz focuses on Week 8 of the IS4302 Blockchain and Distributed Ledger Technologies course. It covers essential topics such as NFTs, smart contract security, blockchain protocols, and interoperability. Test your knowledge on the key concepts, use cases, and challenges associated with these technologies.
