Lecture 5 - Blockchain

Question 1

What is Blockchain?

Answer 1

An unique type of computerized ledger that relies on cryptographic techniques and new methods for consensus to capture and secure the data.

Question 2

What is the goal of blockchain?

Answer 2

The goal is to cut away the middle man (government, central bank). The authority is distributed.

Question 3

Applications of blockchain: (4)

Answer 3

1. Money transactions
2. Medical records
3. Buying and selling goods
4. Insurance policies

Question 4

What is so special about blockchain? (4)

Answer 4

1. Distributed
2. Consensus mechanism
3. Encrypted
4. Immutable

Question 5

Distributed is a good thing, because why is it controversial to have the ledger in a central location? (4)

Answer 5

1. Attack vulnerability
2. Single point of contact → even for online banking, if the bank’s servers are down you cannot reach your money
3. Rely on middle-men
4. Operational inefficiency

Question 6

Types of ledgers: (4)

Answer 6

1. Centralized: with middleman
2. Decentralized: multiple middlemans
3. Distributed: no middleman needed, every individual has access and can write on the ledgers.
4. Distributed yet centralized: same as distributed but the ledger is controlled by a central entitiy.

Question 7

What is special about blockchain consensus mechanism?

Answer 7

1. Self-regulating system

2. Distributed consensus

Question 8

How to update the ledger, the process of blockchain? (7)

Answer 8

1. Transaction
2. Transaction broadcasted to the network
3. Nodes / Peers validate the transaction
4. Validated transaction added to a new block
5. New block added to the blockchain
6. New block distributed to all nodes / peers
7. Transaction complete

Question 9

What is so special about blockchain - encrypted?

Answer 9

1. Public
2. Cannot be forged
3. Can be verified by anyone

Question 10

What does a block store? (7)

Answer 10

1. Timestamp
2. Block number
3. Difficulty
4. Hash
5. A parent hash
6. Transaction list
7. Nonce