Blockchain

Question 1

When does Satoshi Nakamoto publish his paper?

Answer 1

October 2008

Question 2

What solution does the paper presented?

Answer 2

The double-spending problem for digital currency

Question 3

What is the underlying technology revealed in his paper?

Answer 3

Blockchain

Question 4

What is the first simplest implementation of blockchain?

Answer 4

Bitcoin

Question 5

What does blockchain solve and how?

Answer 5

The double spending problem by replacing the trusted central ledger-keeper with a network of ledger-keepers.

Question 6

For what do the keepers use their replica of the ledger?

Answer 6

They used it to observe proposed changes and reach consensus about new ledger states

Question 7

How can a change made to a ledger be achivied?

Answer 7

By achieving network consensus

Question 8

What does bitcoin convincingly demonstrates?

Answer 8

That a network of nodes that don’t necessarily trust each other can form a consensus about transaction validation, transaction history and the resulting state.

Question 9

What does a well understood solution for retaining and monitor changes to a file with a verifiable unbroken history of al changes must use?

Answer 9

Cryptographic hash functions

Question 10

What are the 5 main properties the ideal cryptographic hash function has?

Answer 10

1. It is deterministic so the same message always result in the same hash
2. It is quick to compute the hash value for any given message
3. It is infeasible to generate a message from its hash value except by trying all possible messages
4. A small change to a message should change the hash value so extensively that the new hash value appears uncorrelated with the old hash value
5. It is unfeasible to find two different messages with the same hash value

Question 11

How does blocks of transactions get appended?

Answer 11

Using hashes of previous blocks as inputs into hashes of subsequent blocks.

Question 12

What are transaction blocks?

Answer 12

Logical units that wrap up a set of transactions in a specific order.

Question 13

How does bitcoin addresses the ordering of transactions?

Answer 13

By a process called proof of work which can be thought as a lottery.

Question 14

What does the lottery winners block become?

Answer 14

The network’s de facto official result about the order of transactions within the block

Question 15

What does a valid block contains?

Answer 15

A well ordered set of transactions, the hash of the previous block, and the nonce(winning lottery ticket).

Question 16

How does cryptographic hash functions empower all participants?

Answer 16

In that they can satisfy themselves that they possess an undistorted history of everything.

Question 17

What is eventual consensus?

Answer 17

Since all nodes can verify the chain independently, they can proceed on the assumption that all other nodes will eventually come into agreement about the history of everything.

Question 18

What are some specific attributes of a proof of work public blockchain?

Answer 18

Accessibility: client software and Internet connection

No hierarchy: All nodes and all miners are equal

Crypto economic incentives: transaction fees, miner rewards and prohibitively expensive cost associated with attacking the network.

Full decentralization: because they are non-hierarchical and fully accesible