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Blockchain is a decentralized ledger technology that records transactions securely and transparently, eliminating intermediaries. It operates through transaction initiation, validation, block formation, and distribution, and features decentralization, transparency, immutability, and security. Key applications include cryptocurrencies, supply chain management, and healthcare, with challenges such as scalability and regulatory uncertainty.

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0% found this document useful (0 votes)
12 views5 pages

Ques Answer

Blockchain is a decentralized ledger technology that records transactions securely and transparently, eliminating intermediaries. It operates through transaction initiation, validation, block formation, and distribution, and features decentralization, transparency, immutability, and security. Key applications include cryptocurrencies, supply chain management, and healthcare, with challenges such as scalability and regulatory uncertainty.

Uploaded by

gaurav vats
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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1. What is Blockchain?

Optimized Answer:
Blockchain is a decentralized, distributed ledger technology that
records transactions in an immutable and transparent manner. Each
block contains a list of transactions, a timestamp, and a cryptographic
hash of the previous block, forming a secure chain. This eliminates
the need for intermediaries and ensures trust among participants.

2. How does Blockchain work?


Optimized Answer:
Blockchain operates in four key steps:
1. Transaction Initiation – A user initiates a transaction, which is
broadcasted to the network.
2. Transaction Validation – Nodes in the network validate the
transaction using a consensus mechanism (e.g., Proof of Work,
Proof of Stake).
3. Block Formation – Once validated, the transaction is added to a
block.
4. Block Addition & Distribution – The new block is added to the
blockchain and distributed across all nodes, ensuring
transparency and security.

3. What are the key features of Blockchain?


Optimized Answer:
 Decentralization – No single authority controls the network.
 Transparency – Transactions are publicly verifiable.
 Immutability – Once recorded, data cannot be altered.
 Security – Uses cryptographic hashing and digital signatures.
 Consensus Mechanisms – Ensures all participants agree on
transactions.
4. What is a Smart Contract?
Optimized Answer:
A smart contract is a self-executing program on a blockchain that
automatically enforces the terms of an agreement when predefined
conditions are met. It eliminates intermediaries, reducing costs and
improving efficiency.
Example: Ethereum smart contracts written in Solidity.

5. What are the types of Blockchains?


Optimized Answer:
 Public Blockchain – Open to everyone (e.g., Bitcoin,
Ethereum).
 Private Blockchain – Access restricted to specific users (e.g.,
Hyperledger Fabric).
 Consortium Blockchain – Controlled by multiple organizations
(e.g., R3 Corda, Quorum).

6. What is the difference between Bitcoin and Blockchain?


Optimized Answer:
 Bitcoin – A cryptocurrency that uses blockchain as its
underlying technology.
 Blockchain – A distributed ledger technology that powers
Bitcoin and many other applications (e.g., supply chain,
healthcare).

7. What is a Consensus Mechanism?


Optimized Answer:
A consensus mechanism is a protocol that ensures all participants in a
blockchain network agree on transaction validity. Common types:
 Proof of Work (PoW) – Miners solve puzzles to validate
transactions (e.g., Bitcoin).
 Proof of Stake (PoS) – Validators are chosen based on the
number of tokens staked (e.g., Ethereum 2.0).
 Delegated Proof of Stake (DPoS) – Token holders vote for
delegates to validate transactions.

8. What are the advantages of Blockchain?


Optimized Answer:
✅ Enhanced Security – Cryptographic techniques prevent fraud.
✅ Decentralization – Eliminates central points of failure.
✅ Transparency – Transactions are publicly verifiable.
✅ Efficiency – Reduces intermediaries, lowering costs.
✅ Tamper-proof Ledger – Data cannot be altered once recorded.

9. What are the challenges of Blockchain?


Optimized Answer:
❌ Scalability – Networks like Bitcoin process only a few transactions
per second.
❌ Energy Consumption – PoW-based blockchains require high
computational power.
❌ Regulatory Uncertainty – Governments are still defining legal
frameworks.
❌ Interoperability – Difficulties in connecting different blockchains.

10. What is a 51% Attack?


Optimized Answer:
A 51% attack occurs when a single entity controls more than 50% of
a blockchain’s computing power, allowing them to:
 Double-spend coins.
 Prevent new transactions from being confirmed.
 Rewrite the blockchain’s history.
Bitcoin and other PoW networks are vulnerable to this attack.
11. What is the role of Cryptography in Blockchain?
Optimized Answer:
Cryptography ensures blockchain security through:
 Hashing – Converts transaction data into a fixed-length output
(e.g., SHA-256 in Bitcoin).
 Digital Signatures – Verifies sender authenticity.
 Public & Private Keys – Used in wallet security and identity
protection.

12. What are some real-world applications of Blockchain?


Optimized Answer:
💰 Cryptocurrencies – Bitcoin, Ethereum, and stablecoins.
📦 Supply Chain – IBM Food Trust for tracking goods.
🏥 Healthcare – Securing patient records.
🏦 Finance – Cross-border payments, DeFi (Decentralized Finance).
🗳 Voting – Blockchain-based election systems for transparency.

13. What is a Distributed Ledger?


Optimized Answer:
A distributed ledger is a decentralized database that records
transactions across multiple locations. Blockchain is a type of
distributed ledger that ensures tamper-proof and transparent record-
keeping.

14. What is the difference between Blockchain and a traditional


database?
Feature Blockchain Traditional Database
Control Decentralized Centralized
Immutability Data cannot be changed Data can be modified
Security Cryptographic protection Standard encryption
Trust Trustless system Requires a trusted authority
Feature Blockchain Traditional Database

Blockchain is ideal for trustless and transparent applications,


whereas traditional databases work well for centralized data storage.

15. What is the future of Blockchain?


Optimized Answer:
🔹 Mainstream Adoption – Industries like finance, healthcare, and
logistics integrating blockchain.
🔹 Scalability Improvements – Layer 2 solutions (e.g., Lightning
Network, Polygon).
🔹 Energy Efficiency – Shift from PoW to PoS (Ethereum 2.0).
🔹 Regulatory Frameworks – Governments defining clearer
blockchain regulations.
🔹 Decentralized Web (Web3) – Moving towards a more open and
user-controlled intern

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