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Blockchain Application for business > Chapter B1. Strengths and Weaknesses of Blockchain Technology > Flashcards

Chapter B1. Strengths and Weaknesses of Blockchain Technology Flashcards

1
Q

Benefits of blockchain for business:

A
  • get rid of the man in the middle&raquo_space; peer-to-peer network

* cutting costs&raquo_space; optimizing processes

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2
Q

Main issues that prevent business to implement blockchain:

A
  • lack of awareness and know-how

* Legal issues

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3
Q

advantage of a peer-to-peer system

A

The advantage of peer-to-peer systems over centralized systems is that direct interactions occur between contractual partners instead of indirect interactions through a middleman, hence, there is less processing time and lower costs.

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4
Q

What is disintemediation?

A

It also means to replace the middleman

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5
Q

What is an example of a centralized peer-to-peer system? Explain it.

A

An example of a centralized peer-to-peer system is Napster, which maintained a central database of all nodes connected with the system and the songs
available on these nodes.

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6
Q

The excitement about the blockchain is based on its ability to serve as a tool for achieving and maintaining integrity in _______ systems that have the potential to change whole industries due to ________.

A

purely distributed peer-to-peer

disintermediation

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7
Q

Peer-to-peer systems can be

A

centralized or purely distributed.

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8
Q

Explain the excitement about blockchain and peer-to-peer systems.

A

The excitement about the blockchain is based on its
ability to serve as a tool for achieving and maintaining
integrity in purely distributed peer-to-peer systems that
have the potential to change whole industries due to
disintermediation.

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9
Q

What is the major purpose of the blockchain?

A

maintaining integrity in distributed systems is the

major purpose of the blockchain.

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10
Q

what is integrity in the context of software systems?

A

integrity is a nonfunctional aspect of a system to be safe, complete, consistent, correct, and free of corruption and errors.

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11
Q

what is trust in the context of software systems?

A

Trust is also the firm belief of humans in the reliability, truth, or ability of someone or something without evidence, proof, or investigation.

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12
Q

Achieving and maintaining integrity in purely distributed systems depends on a variety of factors, some of the most important are:

A
  • Knowledge about the number of nodes or peers

* Knowledge about the trustworthiness of the peers

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13
Q

two major integrity threats in peer-to-peer systems:

A
  • Technical failures

* Malicious peers

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14
Q

The core problem to be solved by the blockchain is….

A

achieving and maintaining integrity in a purely distributed peer-to-peer system that consists of an unknown number of peers with unknown reliability and trustworthiness.

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15
Q

The core problem to be solved by the blockchain is also known as….

A

Byzantine general problem.

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16
Q

The most important technical limitations of the blockchain are:

A
  • Lack of privacy
  • The security model
  • Limited scalability
  • High costs
  • Hidden centrality
  • Lack of flexibility
  • Critical size
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17
Q

Nontechnical Limitations of the Blockchain:

A
  • Lack of legal acceptance

* Lack of user acceptance

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18
Q

Conflicting Goals of the Blockchain:

A
  • Transparency vs. privacy

* Security vs. speed

19
Q

The most secretive version of the blockchain is the….

A

private permissioned blockchain.

20
Q

Restricting reading or writing access to the history of transaction data impacts the following aspects of the blockchain:

A
  • The peer-to-peer architecture
  • The distributed nature
  • The purpose
21
Q

The transparency vs. privacy conflict has its root

in the allocation of …

A

reading access rights to the blockchain-data-structure.

22
Q

The security vs. speed conflict has its root in the allocation of …

A

writing access rights to the blockchain-data-structure.

23
Q

The distributed peer-to-peer system…

Select one or more:

a.
is a special kind of distributed system

b.
has no central point of coordination

c.
consists of different blockchains

d.
consists of individual computers

A

a, b and d

24
Q

The two main types of software architecture are…

Select one or more:

a.
Business-to-Business

b.
Distributed

c.
Centralized

d.
Peer-to-Peer

A

b and c

25
Q

In the centralized system the nodes connect with one another.

Select one:
True
False

A

False

26
Q

The distributed system has no central element.

Select one:
True
False

A

True

27
Q

Technical limitations of the blockchain are:

Select one or more:

a.
Lack of privacy

b.
Low costs

c.
Smart contracts

d.
Lack of flexibility

A

a and d

28
Q

Disadvantages of distributed systems are:

Select one or more:

a.
Higher program complexity

b.
Staff overhead

c.
Coordination overhead

d.
Security issues

A

a, c and d

29
Q

The Blockchain can be considered as a tool for achieving and maintaining integrity in distributed systems.

Select one:
True
False

A

True

30
Q

Integrity threats in peer-to-peer systems are:

Select one or more:

a.
Malicious peers

b.
Dependency on smart contracts

c.
Financial issues

d.
Technical failures

A

a and d

31
Q

Every industry with a middleman is vulnerable to being replaced by peer-to-peer systems.

Select one:
True
False

A

True

32
Q

The architectural decision and the functional aspect of the application layer are dependent on each other.

Select one:
True
False

A

False&raquo_space;

The architectural decision can be done independently from the functional aspects of the application layer. As a result, one can create distributed as well as centralized systems with identical functionality on the application layer. The architecture is only a means to an end when it comes to implementing a system.

33
Q

Peer-to-peer networks consist of individual computers, also called _____

A

nodes

34
Q

The decision _______ vs privacy” means deciding on whom to grant reading access.

A

transparency

35
Q

When do you need a blockchain?

A
  • need more than one participant need to be able to update the data
  • participants would not trust a third party
  • participants trust one another but redundant copies in multiple distributed computers is needed.&raquo_space; if data needs to be kept private&raquo_space; permissioned blockchain OR&raquo_space; if data can be public&raquo_space; public blockchain
36
Q

Problems with proof of work:

A
  • computational arms race
  • not green: huge electricity consumption
  • 51% attack: miners controlling 50% of the compute power can halt or even reverse transactions
  • slow
37
Q

Emerging alternatives to proof of work:

A
  • proof of stake
  • proof of importance
  • proof of space
38
Q

Ethereum Scaling Solutions:

A
  • Plasma
  • Sharding
  • Casper
39
Q

DAG-based solutions:

A
  • IOTA
  • HashGraph
  • Avalanche
40
Q

Emerging alternatives to “Proof of Work” are…

Select one or more:

a.
Proof of Space

b.
Proof of Room

c.
Proof of Stake

d.
Proof of Share

A

a and c

41
Q

Plasma is an Ethereum scaling solution to reduce on-chain data (similar to lightning network for bitcoin) by deploying a hierarchy of blockchains rooted in the main chain.

Select one:
True
False

A

true

42
Q

Sharding is a proof of stake scheme that requires mining nodes to put up ETH as stake that they could lose upon bad behavior.

Select one:
True
False

A

false

|&raquo_space; correct: nodes store just a part of the distributed registry; trades off security for throughput.

43
Q

Casper is a proof of stake scheme that requires mining nodes to put up ETH as stake that they could lose upon bad behavior.

Select one:
True
False

A

true

44
Q

Problems of “Proof of Work” include…

Select one or more:

a.
it is a computational arms race

b.
it is not green, e.g. results in huge electricity consumption

c.
slow

d.
threat of a 75% attack

A

a, b and c

Blockchain Application for business (14 decks)

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