Blockchain Architecture Design [BCS-063]
UNIT -1
Tutorial 1 - In-Depth Answers
1. What do you mean by blockchain? What are the properties/features of blockchain?
Blockchain is a type of distributed ledger technology (DLT) that stores records of transactions in a
decentralized manner across a peer-to-peer network. Each record is stored in a "block," and these
blocks are cryptographically linked to form a chain. Key features include decentralization,
transparency, immutability, security, consensus mechanisms, distributed ledger, and smart
contracts.
2. What is the motivation behind blockchain? Explain the need for blockchain.
The motivation for blockchain is to enable trusted peer-to-peer transactions without a central
authority. It increases transparency, security, cost-efficiency, auditability, and reduces reliance on
intermediaries.
3. List the advantages and disadvantages of public, private & consortium blockchain.
Public: Transparent and decentralized, but slow and resource-intensive.
Private: Efficient and controlled, but centralized.
Consortium: Balanced and scalable, but complex to govern.
4. Explain the major elements of the blockchain ecosystem in detail.
Elements include nodes, ledger, blocks, chains, transactions, smart contracts, consensus
algorithms, cryptographic algorithms, and wallets.
5. How does a blockchain work?
A transaction is broadcast to the network, validated via consensus, grouped into a block, and added
to the chain. The data becomes permanent and visible to all.
6. What is a blockchain database?
A decentralized, immutable database managed by a peer-to-peer network using consensus to
validate and add data.
7. What are the advantages/benefits of blockchain? Explain in detail.
Includes transparency, immutability, security, decentralization, cost reduction, traceability, and
efficiency.
8. What are the limitations of blockchain? Explain in detail.
Limitations include scalability, energy use, data storage needs, complexity, legal uncertainty, and
lack of standardization.
9. What is digital money?
Digital money is any currency in digital form, including cryptocurrencies and electronic money.
10. What are distributed ledgers?
Databases duplicated across multiple locations to ensure redundancy and transparency. Blockchain
is a type of distributed ledger.
11. Differentiate digital money and distributed ledger.
Digital money is currency; a distributed ledger is the technology to record transactions.
12. What is a ledger? Is blockchain an incorruptible ledger? Explain common types of ledgers.
A ledger records transactions. Blockchain is incorruptible due to its immutability. Types: centralized,
decentralized, distributed.
13. How is blockchain distributed ledger different from a traditional ledger?
Blockchain is decentralized, immutable, real-time, and transparent, unlike traditional centralized
ledgers.
14. How will you handle risk management for securing transaction records?
Use cryptographic security, cold storage, multi-signatures, audits, monitoring, secure consensus,
and user education.
15. What is a dApp and how is it different from a normal application?
A dApp is decentralized, uses smart contracts, has immutable data, and often includes token-based
operations.
16. What do you know about blockchain? Difference between Bitcoin and Ethereum blockchain?
Bitcoin is for currency transfer with limited scripting. Ethereum supports dApps and smart contracts,
is more flexible and is moving to PoS.
17. What are blockchain protocols?
Rules for node communication, validation, and data storage. Examples: Bitcoin, Ethereum,
Hyperledger, Ripple.
18. Explain permissions in blockchain.
Permissionless blockchains allow open access. Permissioned ones restrict access to authorized
participants.
19. Explain blockchain architecture. Benefits of immutability?
Architecture includes data, network, consensus, and application layers. Immutability ensures
integrity, prevents fraud, and aids auditing.
20. Crypto primitives: Hash function and digital signature.
Hash functions secure data integrity. Digital signatures authenticate and validate transactions using
cryptographic keys.
21. Basic consensus mechanisms in blockchain systems:
- Proof of Work (PoW)
- Proof of Stake (PoS)
- Delegated PoS (DPoS)
- Proof of Authority (PoA)
- Practical Byzantine Fault Tolerance (PBFT)