Chapter B1. Strengths and Weaknesses of Blockchain Technology Flashcards
Benefits of blockchain for business:
- get rid of the man in the middle»_space; peer-to-peer network
* cutting costs»_space; optimizing processes
Main issues that prevent business to implement blockchain:
- lack of awareness and know-how
* Legal issues
advantage of a peer-to-peer system
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.
What is disintemediation?
It also means to replace the middleman
What is an example of a centralized peer-to-peer system? Explain it.
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.
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 ________.
purely distributed peer-to-peer
disintermediation
Peer-to-peer systems can be
centralized or purely distributed.
Explain the excitement about blockchain and peer-to-peer systems.
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.
What is the major purpose of the blockchain?
maintaining integrity in distributed systems is the
major purpose of the blockchain.
what is integrity in the context of software systems?
integrity is a nonfunctional aspect of a system to be safe, complete, consistent, correct, and free of corruption and errors.
what is trust in the context of software systems?
Trust is also the firm belief of humans in the reliability, truth, or ability of someone or something without evidence, proof, or investigation.
Achieving and maintaining integrity in purely distributed systems depends on a variety of factors, some of the most important are:
- Knowledge about the number of nodes or peers
* Knowledge about the trustworthiness of the peers
two major integrity threats in peer-to-peer systems:
- Technical failures
* Malicious peers
The core problem to be solved by the blockchain is….
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.
The core problem to be solved by the blockchain is also known as….
Byzantine general problem.
The most important technical limitations of the blockchain are:
- Lack of privacy
- The security model
- Limited scalability
- High costs
- Hidden centrality
- Lack of flexibility
- Critical size
Nontechnical Limitations of the Blockchain:
- Lack of legal acceptance
* Lack of user acceptance
Conflicting Goals of the Blockchain:
- Transparency vs. privacy
* Security vs. speed
The most secretive version of the blockchain is the….
private permissioned blockchain.
Restricting reading or writing access to the history of transaction data impacts the following aspects of the blockchain:
- The peer-to-peer architecture
- The distributed nature
- The purpose
The transparency vs. privacy conflict has its root
in the allocation of …
reading access rights to the blockchain-data-structure.
The security vs. speed conflict has its root in the allocation of …
writing access rights to the blockchain-data-structure.
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, b and d
The two main types of software architecture are…
Select one or more:
a.
Business-to-Business
b.
Distributed
c.
Centralized
d.
Peer-to-Peer
b and c
In the centralized system the nodes connect with one another.
Select one:
True
False
False
The distributed system has no central element.
Select one:
True
False
True
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 and d
Disadvantages of distributed systems are:
Select one or more:
a.
Higher program complexity
b.
Staff overhead
c.
Coordination overhead
d.
Security issues
a, c and d
The Blockchain can be considered as a tool for achieving and maintaining integrity in distributed systems.
Select one:
True
False
True
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 and d
Every industry with a middleman is vulnerable to being replaced by peer-to-peer systems.
Select one:
True
False
True
The architectural decision and the functional aspect of the application layer are dependent on each other.
Select one:
True
False
False»_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.
Peer-to-peer networks consist of individual computers, also called _____
nodes
The decision _______ vs privacy” means deciding on whom to grant reading access.
transparency
When do you need a blockchain?
- 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.»_space; if data needs to be kept private»_space; permissioned blockchain OR»_space; if data can be public»_space; public blockchain
Problems with proof of work:
- computational arms race
- not green: huge electricity consumption
- 51% attack: miners controlling 50% of the compute power can halt or even reverse transactions
- slow
Emerging alternatives to proof of work:
- proof of stake
- proof of importance
- proof of space
Ethereum Scaling Solutions:
- Plasma
- Sharding
- Casper
DAG-based solutions:
- IOTA
- HashGraph
- Avalanche
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 and c
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
true
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
false
|»_space; correct: nodes store just a part of the distributed registry; trades off security for throughput.
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
true
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, b and c
