PART – A (10 × 2 = 20 Marks)

1. What is Blockchain Technology?

Blockchain is a distributed and decentralized digital ledger that records transactions across
multiple computers in a secure, transparent, and immutable manner.
Each transaction is stored in a block, and blocks are linked together using cryptographic
hashes to form a chain.

2. Examine a Cryptographic Hash Function

A cryptographic hash function is an algorithm that converts input data into a fixed-length
hash value.

Characteristics:

 Deterministic (same input → same output)

 One-way function (cannot reverse the hash)

 Collision resistant

 Fast to compute

Example:
SHA-256 used in Bitcoin.

3. What is Digital Signature?

A digital signature is a cryptographic technique used to verify the authenticity and integrity
of a digital message or transaction.

It uses:

 Private key to create the signature

 Public key to verify the signature

It ensures:

 Authentication

 Data integrity

 Non-repudiation
4. Distinguish between Public and Private Blockchain

Public Blockchain Private Blockchain

Open to everyone Restricted access
Fully decentralized Controlled by an organization
Transparent transactions Limited visibility
Example: Bitcoin, Ethereum Example: Hyperledger

5. Define Cryptocurrency

Cryptocurrency is a digital or virtual currency secured by cryptography and operates on

blockchain technology.
It enables secure peer-to-peer transactions without a central authority such as banks.

Examples: Bitcoin, Ethereum, Litecoin.

6. What is Double Spending in Blockchain?

Double spending is the risk of spending the same cryptocurrency more than once.

Blockchain prevents this by:

 Transaction verification

 Consensus mechanisms

 Distributed ledger validation.

7. What are Bitcoin Payments?

Bitcoin payments are peer-to-peer digital payments made using Bitcoin cryptocurrency
through blockchain networks without intermediaries like banks.

Features:

 Low transaction cost

 Global transactions

 Fast and secure

8. Major Companies Accepting Bitcoin as Payment

Some companies accepting Bitcoin include:

 Microsoft
  Tesla

 PayPal

 Overstock

 Shopify

 AT&T

9. What is a Consensus Mechanism?

A consensus mechanism is a protocol used in blockchain networks to achieve agreement

among distributed nodes on the validity of transactions and blocks.

Examples:

 Proof of Work (PoW)

 Proof of Stake (PoS)

 Proof of Burn (PoB)

10. What is Proof of Burn (PoB)?

Proof of Burn is a consensus mechanism where miners permanently destroy (burn)

cryptocurrency to gain the right to mine new blocks.

Purpose:

 Demonstrates commitment to the network

 Reduces circulating supply

 Alternative to energy-intensive mining.

PART – B (16 Marks)

11 a) What is a Public Ledger? Explain Benefits and Applications of Blockchain

Public Ledger

A public ledger is a distributed database that records all blockchain transactions

transparently and permanently.
Every participant in the network can view and verify the transactions.

Example: Bitcoin Blockchain.

Benefits of Blockchain Technology

1. Decentralization

o No central authority controls the system.

2. Transparency

o Transactions are visible to all network participants.

3. Security

o Uses cryptography and distributed consensus.

4. Immutability

o Once data is recorded, it cannot be altered.

5. Efficiency

o Eliminates intermediaries.

6. Traceability

o Every transaction can be tracked.

Applications of Blockchain

1. Cryptocurrency

o Bitcoin, Ethereum transactions.

2. Supply Chain Management

o Tracking goods and logistics.

3. Healthcare

o Secure storage of medical records.

4. Digital Identity

o Identity verification systems.

5. Voting Systems

o Transparent electronic voting.

6. Smart Contracts

o Automated agreements without intermediaries.

11 b) Merkle Tree in Blockchain Voting System

Merkle Tree

A Merkle Tree is a binary hash tree used to verify large amounts of data efficiently.

Each leaf node contains a transaction hash, and parent nodes store combined hashes of
child nodes.

Working in Voting System

1. Each vote is treated as a transaction.

2. Votes are hashed.

3. Hashes are stored as leaf nodes in the Merkle tree.

4. Parent nodes store combined hashes.

5. Final root hash (Merkle Root) is stored in the block.

Advantages in Voting

1. Data Integrity

 Any change in votes changes the Merkle root.

2. Efficient Verification

 Only partial data required to verify votes.

3. Transparency

 Anyone can verify results.

4. Security

 Prevents vote tampering.

12 a) Explain Bitcoin and Compare Bitcoin with Blockchain

Bitcoin

Bitcoin is a decentralized digital currency introduced by Satoshi Nakamoto in 2008 that

allows peer-to-peer financial transactions without intermediaries.
Features of Bitcoin

 Decentralized

 Limited supply (21 million)

 Secure transactions

 Uses Proof of Work

 Global accessibility

Bitcoin Transaction Process

1. User initiates transaction.

2. Transaction broadcast to network.

3. Miners verify transaction.

4. Block is created.

5. Block added to blockchain.

Creation of Bitcoin (Mining)

Bitcoin is created through mining.

Steps:

1. Miners solve complex mathematical puzzles.

2. They use Proof of Work algorithm.

3. Successful miner adds block to blockchain.

4. Miner receives block reward (new bitcoins).

Difference Between Bitcoin and Blockchain

Bitcoin Blockchain

Digital currency Technology platform

Used for payments Used for recording transactions

First application of blockchain Underlying technology

Example cryptocurrency Can support many applications

12 b) Hardware Wallet vs Software Wallet & FORTH

Hardware Wallet

A hardware wallet is a physical device used to securely store cryptocurrency private keys
offline.

Examples:
Ledger Nano
Trezor

Advantages

 Very secure

 Offline storage

 Protected from malware

Disadvantages

 Expensive

 Requires device access

Software Wallet

A software wallet is a digital application used to store cryptocurrency on computers or

mobile devices.

Examples:
Exodus
Trust Wallet
MetaMask

Advantages

 Easy to use

 Free

 Quick access

Disadvantages

 Vulnerable to hacking

 Depends on internet security

Comparison

Hardware Wallet Software Wallet

Offline storage Online storage
More secure Less secure
Expensive Usually free
Physical device required App based

FORTH in Bitcoin

FORTH is a stack-based programming language used in Bitcoin scripting.

Purpose:

 Define transaction rules

 Validate transactions

Example Script

OP_DUP

OP_HASH160

<Public Key Hash>

OP_EQUALVERIFY

OP_CHECKSIG

This script ensures:

 Sender owns the private key

 Transaction is authenticated.

PART – C (8 Marks)

13 a) Analyze Bitcoin’s Proof of Work (PoW) System with Attack Types

Proof of Work (PoW)

Proof of Work is a consensus algorithm where miners solve complex mathematical puzzles
to validate transactions and create new blocks.

Steps:

1. Transactions collected.
 2. Miners compute hash value.

3. Hash must satisfy network difficulty.

4. Valid block added to blockchain.

5. Miner receives reward.

Advantages

 Strong security

 Prevents double spending

 Decentralized verification

Attack Types in PoW

1. 51% Attack

If a miner controls more than 50% of the network's computing power, they can:

 Reverse transactions

 Perform double spending

 Prevent new transactions

2. Selfish Mining

A miner secretly mines blocks and releases them later to gain advantage and earn more
rewards.

3. Double Spending Attack

An attacker tries to spend the same cryptocurrency twice before the network confirms the
transaction.

4. Sybil Attack

An attacker creates multiple fake nodes to manipulate the network.