1. WHAT IS BLOCKCHAIN?

A blockchain is a type of distributed ledger, which enables records to be stored and

sorted into blocks.
Blockchain adalah salah satu teknologi yang tidak menggunakan pihak ketiga
dalam suatu proses pertukaran data yang dalam hal ini terjadi pada proses
transaksi.

2. What is private, public, and consortium blockchain?

Public blockchains: Anyone that wants to read, write, or join a public blockchain can
do so. Public chains are decentralized meaning no one body has control over the
network, ensuring the data can’t be changed once validated on the blockchain.
Simply meaning, anyone, anywhere, can use a public blockchain to input transactions
and data as long as they are connected to the network. Example: Bitcoin

Private Blockchains: invitation-only network governed by a single entity.

Blockchains that are private or permissioned work similarly to public blockchains but
with access controls that restrict those that can join the network, meaning it
operates like a centralised database system of today that limits access to certain users.
Example: Hyperledger

Hyperledger is an open source collaborative effort created to advance cross-industry

blockchain technologies. It is a global collaboration, hosted by The Linux Foundation,
including leaders in finance, banking, Internet of Things, supply chains, manufacturing
and Technology.

Some critics claim private blockchains are not blockchains at all, but centralised
databases that use distributed ledger technology.

Consortium Blockchain: partly private. This platform would be great for organizational
collaboration. not just anyone with an internet connection could gain access to a
consortium blockchain. These types of blockchains could also be described as being
semi-decentralized. Example: Quorum

Control over a consortium blockchain is not granted to a single entity, but rather a
group of approved individuals. If different companies operate a blockchain together,
we speak of a consortium chain.
3. What is the difference between block records and transactional records?
Blockchains consist of a series of individual blocks, each in chronological order based
on the order of transactions. There are two parts to the information contained in a block.
The first part consists of the header elements that provide information about location
and data pertaining to transactions contained within a block. For example, a hash within
the header points to the previous block. There are no hashes for genesis blocks
because these blocks have no predecessor
And transcation record is contain from block chain which A transaction is a transfer of
cryptocurrency value that is broadcasted to the entire network and collected in blocks,
as previously mentioned

4. What are the differences between blockchain and traditional database?

There are several differences between blockchain and traditional database, blockchain itself
features:
1. Distributed Cosensus
Blockchain is a shared or “distributed” digital ledger of transactions over a
network of participating computers. Since blockchain technology embeds peer-to-peer
communications among the participating computers, the need for management of the
network by a central third party is eliminated.

2. No Single Point of Failure

The peer-to-peer shared nature of the blockchain ledger allows participants to
leave and rejoin the network at will (i.e., if one computer drops out of the network
through choice or failure, the rest of the network continues to operate). A transaction
system is thus created that does not have any single point of failure.
3. Built-In Security
a. Encryption
Blockchain technology uses public- and private-key cryptography to sign
transactions digitally.
 b. Timestamping and Irrevocability of Transactions All blocks are timestamped and
the chain is sequenced chronologically. Timestamped data storage in the
blockchain can therefore be used to prove the existence of records at a point in
time.
Once included in blocks, transactions are permanent records. New blocks carry
the cryptographic signature of previous blocks and copies are kept by all
participating systems (decentralized vs. centralized). As a result, it is very difficult
to alter earlier transactions in the blockchain. The blockchain is therefore
regarded as being more secure than traditional centralized databases.
4. Real-Time Transparency and Auditability
Because transactions within the blockchain can be traced to the authorized
originator, an audit trail is automatically created. Since transactions are permanent,
auditors, regulators, and others could gain unprecedented insight into the state of
accounts, which includes not only the most recent transaction but also a complete record
of all transactions.

5. What are the four key features of the blockchain?

(1) Decentralized System

A decentralized system allows users to accumulate assets in a network that can be transferred
and received anywhere in the world through the Internet. These assets could be a token,
contract, and other important documents. With a decentralized technology, the user has a
precise authority using a private key associated with the asset

(2) Distributed Ledger

A blockchain serves as a public ledger that presents the members’ information and
accomplished digital transactions. The blocks that have recorded dealings completely are then
counted to form a blockchain

(3) Promotes Safer and Secure Ecosystem

Blockchain has the ability to analyze and revise itself from time to time which stimulates its self-
reviewing process.

(4) Mining

“Mining” involves “miner” that solves a complex mathematical computation. Miners compete with
each other because of the reward they can get after deciphering the puzzle. Whoever solved it
first, gets the prize.

6. What are the components of blockchain

1. Ledger

Business ledgers are an important part of any business. Ledger contains all the

record of the transaction in both offline and online world. In Blockchain,

technology ledger contains the record of all transactions and participants are

given permission to oversee the transactions. There are two types of ledger

public and private or business ledger. In public network, all participants or

members are allowed to look at all the ongoing transactions. However, in some

cases, members are refrained from looking at the details of the transaction

between two members.

For example, let’s say there are two participants A and B indulge in a transition,

now C another participant wants to see the details of the transaction, however,
he won’t be permitted to look at the details of the transaction, but he can see

that transaction has happened between two members. The shared ledger is a

distributed network which lists down the rules every ledger contains to support

the security of the network. For example, if you are running the bitcoin

application then you have to follow the rule set by the network administrator for

bitcoin application.

2. Smart Contract

A smart contract is a legal document that allows sharing money, property, and

other valuable assets without the indulgence of the middleman. This is a great

technology because it reduces or devoid the chances of fraud or illegal

activities. A suitable way to define the smart contract is to compare it to the

vending machine.

Suppose if you want to create a driving license or buy property, you need to go

to the lawyer, however, with bitcoin technology, you need only to insert a coin

in the vending machine and you can escrow driving license and other

documents. In other words, the smart contract is like the traditional document

to define rules and regulations but it automatically enforces those obligations.

This feature has already helped many of the Blockchain users in a situation

where the legal proof is required.

3. Consensus Algorithm

Consensus algorithm is a group of rules and laws which run a Blockchain. The

term consensus refers to aggregate decision or agreement between different

people over the set of rules and regulation to conduct a Blockchain. A

distributed consensus is a system in which more than a computer or node is

allowed to take part in the overall decision making. All these nodes mutually

consent to reach out to a decision. The distributed consensus works parallel to

the way human work.

4. Membership

Every Blockchain is assigned a unique identity which differentiates it from the

other Blockchain service that is available for users. All participants of the

Blockchain are being given permission to use the network by assigning a unique

identity. There is a renowned agency or trusted agency which issues certificates

to Blockchain for operations.

5. Events

Events are also an important part of the Blockchain technology. It is useful

as it gives notifications of all the important operations on the Blockchain. For

example, if there is a transaction occurring in the Blockchain it will give you a

notification. However, event distribution is not the part of this technology.

6. System Management

It is also one of the prominent aspects of the Blockchain network. A system

management or manager define, create, modify or remove the rules. A system

manager has broad responsibility. He is being given authority to make sure that

error-free operations happen on the Blockchain.

7. Wallet
The wallet is also an important component of the Blockchain. Each member of

the Blockchain is being given a wallet which securely maintains all records of

the user. It confines security to all the details of the user and also secures the

credential of all the participants.

8. System Integration

Sometimes, it is required to combine a Blockchain bi-directionally with an

external system. It is not the part of the Blockchain system but can be used

with it.

Source: IBM

7. What are the benefits and challenges in Blockchain implementation?

Benefits:

1. Greater transparency
Transaction histories are becoming more transparent through the use of blockchain
technology. Because blockchain is a type of distributed ledger, all network participants
share the same documentation as opposed to individual copies. That shared version
can only be updated through consensus, which means everyone must agree on it. To
change a single transaction record would require the alteration of all subsequent
records and the collusion of the entire network. Thus, data on a blockchain is more
accurate, consistent and transparent than when it is pushed through paper-heavy
processes. It is also available to all participants who have permissioned access. To
change a single transaction record would require the alteration of all subsequent
records and the collusion of the entire network. Which can be, you know, a headache.

2. Enhanced security
There are several ways blockchain is more secure than other record-keeping systems.
Transactions must be agreed upon before they are recorded. After a transaction is
approved, it is encrypted and linked to the previous transaction. This, along with the fact
that information is stored across a network of computers instead of on a single server,
makes it very difficult for hackers to compromise the transaction data. In any industry
where protecting sensitive data is crucial — financial services, government, healthcare
— blockchain has an opportunity to really change how critical information is shared by
helping to prevent fraud and unauthorized activity.
3. Improved traceability
If your company deals with products that are traded through a complex supply chain,
you’re familiar with how hard it can be to trace an item back to its origin. When
exchanges of goods are recorded on a blockchain, you end up with an audit trail that
shows where an asset came from and every stop it made on its journey. This historical
transaction data can help to verify the authenticity of assets and prevent fraud.
4. Increased efficiency and speed
When you use traditional, paper-heavy processes, trading anything is a time-consuming
process that is prone to human error and often requires third-party mediation. By
streamlining and automating these processes with blockchain, transactions can be
completed faster and more efficiently. Since record-keeping is performed using a single
digital ledger that is shared among participants, you don’t have to reconcile multiple
ledgers and you end up with less clutter. And when everyone has access to the same
information, it becomes easier to trust each other without the need for numerous
intermediaries. Thus, clearing and settlement can occur much quicker.
5. Reduced costs
For most businesses, reducing costs is a priority. With blockchain, you don’t need as
many third parties or middlemen to make guarantees because it doesn’t matter if you
can trust your trading partner. Instead, you just have to trust the data on the blockchain.
You also won’t have to review so much documentation to complete a trade because
everyone will have permissioned access to a single, immutable version.

Challenges and Risk:

● There remain risks of hacking of the blockchain and its applications, especially
as the power of new computing techniques are introduced.
● While blockchain automatically validates transaction
formats, it does not ensure the accuracy of the data
underlying the digital record. Participants to a transaction must confirm the information
posted to the
blockchain. However, errors that participants may not always identify could occur in the
input of the information.
● The blockchain stores data but does not store the
underlying supporting documents.
● There are concerns over the privacy and accessibility
of data on public blockchains.
● Blockchains are not yet as scalable as existing commercial transaction systems and
there are questions
regarding costs and computing power needed to
maintain blockchains.
● Blockchains may not be deemed secure or transparent enough by financial regulators
and governments.
● As with many advanced encrypted applications, there are concerns that blockchains
could facilitate fraudulent or illegal activities due to the anonymity of blockchain
participants
● There could be integration issues among blockchain applications and existing systems
within the same large organization.
● There could be obsolescence issues for early blockchain versions. Upgrades could be
challenging.