Blockchain Flashcards
Etherium
Ethereum is a decentralized, open-source blockchain platform that enables developers to build and deploy smart contracts and decentralized applications (DApps).
Bitcoin
Bitcoin is a blockchain system providing a mechanism for transferring
monetary assets from one person to another, substituting digital cryptographic signatures for a central authority to solve the identity, solvency and double spending problems.
Corda
Corda is a distributed ledger platform developed by R3 for businesses. It is designed specifically for financial institutions and other enterprises to record, manage, and automate legal agreements between parties.
Blockchain
The blockchain is a distributed, decentralized ledger that records all transactions made with a particular cryptocurrency. Each transaction is grouped together in a block, which is then linked to the previous block, forming a chain of blocks - hence the term “blockchain.”
Draw out a feature comparison table comparing THREE features of Bitcoin and Corda
Decentralization
Bitcoin: Decentralized, peer-to-peer network
Corda: Permissioned, distributed ledger platform
Consensus Mechanism
Bitcoin: Proof of Work (PoW)
Corda: Pluggable consensus mechanisms
Smart Contract Support
Bitcoin: Limited support for basic scripting language
Corda: Extensive support for smart contracts
Bitcoin transactions can map one input to many outputs
True
Bitcoin transactions can map many inputs to one output
True
Bitcoin transactions can map many inputs to many outputs
True
The public ledger is the blockchain
True
Two problems that cryptocurrency technology solves
Identity and double-spending.
How does cryptocurrency technology solves the identity problem
Enabling pseudonymous transactions, leveraging digital signatures for authentication, and facilitating decentralised identity management systems
How does cryptocurrency technology solve the double-spending problem
By leveraging blockchain technology, consensus mechanisms, and cryptographic techniques to securely record and validate transactions, ensuring that funds cannot be spent multiple times.
Preventing Tampering with Transactions
Employ a technique called “Blockchain.”
- Transaction Verification: Verify and bundle transactions.
- Block Formation: Form blocks with headers and transactions.
- Hashing the Block: Hash block contents for uniqueness.
- Linking Blocks: Reference previous block’s hash.
- Consensus Mechanism: Miners solve puzzles to add blocks.
- Verification and Consensus: Nodes verify and agree on block validity.
- Immutability: Changes in a block affect subsequent blocks.
Importance of Sender Public Key in Blockchain Transactions
Verification:
Ensures transaction authenticity.
Allows anyone to verify sender’s identity.
Security and Integrity:
Prevents tampering with transaction data.
Validates transaction digital signatures.
Non-Repudiation:
Provides irrefutable proof of sender’s involvement.
Prevents sender from denying transaction initiation.
Accountability:
Enforces participant accountability.
Transactions are transparent and traceable.
Cryptographic Security:
Used in digital signature creation.
Integral for verifying transaction authenticity.
Importance of Timestamp in Blockchain Transactions
To establish order, preventing double spending, ensuring transparency, and facilitating dispute resolution.
Detecting Tampered Transactions in Blockchain
By verifying its digital signature, performing consistency checks, comparing transaction hashes, enforcing validation rules, and relying on the network consensus mechanism.
51% Attack on Blockchain
51% attack is a potential attack on a blockchain network where an entity or group of entities gains control of more than 50% of the network’s mining power, also known as hash rate. This majority control allows the attacker(s) to manipulate the blockchain ledger and potentially compromise its integrity.
Connecting Blocks in Blockchain
Each block in the blockchain contains a header that includes metadata such as the block’s timestamp, nonce, and a reference to the previous block’s hash.
The reference to the previous block’s hash is achieved through a hash pointer. This hash pointer contains the cryptographic hash of the header of the previous block.
Bitcoin Proof of Work Puzzle
- Miners solve Proof of Work (PoW) puzzles.
- Use cryptographic hash functions to find valid block hashes.
- Process involves trial and error with nonce.
- Validated blocks added to blockchain.
- Miners rewarded with cryptocurrency.
- Ensures security and integrity of blockchain.
Blockchain Infrastructure Components
Node Software, Consensus Mechanism, Peer-to-Peer Network, Blockchain Protocol
Blockchain Node Software
Essential for running nodes and facilitating communication, validation, and ledger maintenance.
Blockchain Consensus Mechanism
Protocol ensuring agreement on transaction validity and blockchain state, e.g., proof-of-work (PoW) in Bitcoin.
Blockchain Peer-to-Peer Network
Facilitates communication and data sharing between nodes in the blockchain network.
Blockchain Protocol
Defines rules governing blockchain operation, including transaction verification, consensus, and block addition.
Bitcoin and Central Banker Role
Decentralization:
Bitcoin operates on a decentralized network of nodes.
No single entity controls the entire system.
Blockchain Technology:
Utilizes blockchain for transparent transaction recording.
No central authority needed to validate transactions.
Bitcoin and Identity Problem
Pseudonymity:
Bitcoin addresses are pseudonymous, not directly linked to real-world identities.
Users can transact without revealing personal information.
Public Ledger:
Transactions are recorded on a public ledger (blockchain) but are pseudonymous.
Users are identified by wallet addresses rather than personal information.
Wallet Privacy:
Bitcoin wallets can be generated and managed without personal information.
Users can create new addresses for each transaction, enhancing privacy.
Decentralization:
No single entity controls user identities or transaction data.
Decentralized nature ensures no central authority for identity verification.
Bitcoin and Double-Spending Problem
Decentralized Consensus:
Bitcoin uses a decentralized network of nodes to validate transactions.
Nodes reach consensus on transaction validity through mechanisms like proof-of-work.
Public Ledger (Blockchain):
All confirmed transactions are recorded on a public ledger called the blockchain.
The blockchain is immutable and transparent, preventing double spending by ensuring each bitcoin can only be spent once.
Bitcoin transaction
Bitcoin transaction contains information about the sender, recipient, amount of bitcoin transferred, and transaction metadata such as fees and digital signatures. This data is recorded on the blockchain, providing a transparent and immutable record of all transactions on the Bitcoin network.
Blockchain in Education
Digital Credentials Creation:
Educational institutions issue digital credentials for academic achievements.
Credentials include student’s name, institution, type of credential, and issuance date.
Blockchain Record:
Digital credentials recorded as transactions on a blockchain network.
Blockchain ensures immutability and transparency of academic achievements.
Verification Process:
Employers and institutions verify credential authenticity by accessing the blockchain record.
Cryptographic techniques used to confirm legitimacy and prevent tampering.
Ownership and Portability:
Students own their digital credentials and can easily share them with relevant parties.
Streamlines processes such as job applications and admissions.
Privacy and Security:
Blockchain technology ensures privacy and security of credentials through decentralized storage and encryption.
Students control access to their credentials and grant verification permission as needed.
