Decentralization and Blockchain Technology

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10 Questions

What is the fundamental principle that underpins blockchain technology?

Decentralization

In a traditional centralized system, who usually holds the keys to all operations?

A single entity or authority

What could be a potential risk in a centralized system if the central authority becomes corrupt or fails?

Lost records and financial instability

What role do participants play in maintaining and validating data in a decentralized system like blockchain?

Nodes or participants

How do consensus mechanisms work in the blockchain network?

They enable all participants to agree on transaction validity

What does the consensus mechanism do in a blockchain network?

Validates transactions in harmony

What is the main goal of both proof of work and proof of stake in a blockchain network?

Maintain harmony in the network

How do cryptographic hash functions contribute to the security of a blockchain network?

Ensure every block has a unique fingerprint

Why are hash functions considered integral to fortifying the immutability of a blockchain ledger?

They convert data into unique strings

In what way do cryptographic hash functions resemble fingerprints in a blockchain?

Both provide unique identities

Learn about the fundamental principle of decentralization and how it relates to blockchain technology. Explore the concept of distributed control and maintenance in systems like libraries, banks, and government organizations.

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