(A) Short Answer Questions:

1. Define Blockchain. Blockchain is a decentralized digital ledger technology that

securely records transactions across multiple computers, ensuring that all copies of the
ledger are the same and immutable.
2. What are the types of Blockchain?
o Public Blockchain: Open and accessible to everyone (e.g., Bitcoin).
o Private Blockchain: Restricted access controlled by a single organization
(e.g., Hyperledger).
o Consortium Blockchain: Managed by a group of organizations (e.g., R3
Corda).
o Hybrid Blockchain: Combines public and private elements (e.g.,
Dragonchain).
3. Define block and chain.
o Block: A block is a data structure that contains a set of transactions, a
timestamp, and a reference to the previous block.
o Chain: A chain is a series of linked blocks, forming a chronological sequence
of all transactions.
4. Define cryptocurrency. Cryptocurrency is a digital or virtual currency that uses
cryptography for security and operates on a blockchain, allowing secure and
anonymous transactions.
5. What is Bitcoin? Bitcoin is the first and most well-known cryptocurrency, created in
2009 by an anonymous person or group known as Satoshi Nakamoto. It enables peer-
to-peer transactions without a central authority.
6. What is consensus? Consensus is a mechanism used in blockchain networks to
ensure that all participants agree on the validity of transactions and the state of the
ledger.
7. Why is Blockchain a trustworthy approach? Blockchain is trustworthy due to its
decentralized nature, transparency, and immutability, making it difficult to alter or
tamper with data.
8. What is Ethereum? Ethereum is a decentralized platform that enables the creation of
smart contracts and decentralized applications (DApps) using its native
cryptocurrency, Ether (ETH).
9. Define hashing. Hashing is the process of converting input data into a fixed-size
string of characters, known as a hash, which uniquely identifies that data.
10. Define digital signature. A digital signature is a cryptographic technique used to
validate the authenticity and integrity of a digital message or document.
11. Define database. A database is an organized collection of data that allows for easy
access, management, and updating.
12. What is nonce? A nonce is a number that is used only once in cryptographic
communications to ensure security and prevent replay attacks.
13. Define smart contracts. Smart contracts are self-executing contracts with the terms
directly written into code, which automatically enforce and execute agreements when
certain conditions are met.
14. What is cryptography? Cryptography is the practice of securing information by
transforming it into an unreadable format for unauthorized users, ensuring
confidentiality and integrity.
(B) Long Answer Questions:

1. What is Blockchain? Explain its importance/need. Also state its advantages and
disadvantages. Blockchain is a revolutionary technology that creates a decentralized
and secure way to record transactions. Its importance lies in the need for transparency,
security, and trust in transactions without the need for intermediaries.

Advantages:

o Decentralization: Reduces reliance on a single authority, minimizing risks of

fraud.
o Security: Uses cryptographic techniques to secure data.
o Transparency: All transactions are visible and verifiable by participants.
o Immutability: Once data is added to the blockchain, it cannot be altered
easily.

Disadvantages:

o Scalability: Difficulty in processing a large volume of transactions quickly.

o Energy Consumption: High energy requirements, particularly for proof-of-
work systems.
o Regulatory Challenges: Uncertain legal frameworks in many jurisdictions.
2. Explain the following Blockchains with examples:
o Public Blockchain: Open to anyone and fully decentralized (e.g., Bitcoin
allows anyone to join and validate transactions).
o Private Blockchain: Access is restricted, typically for internal use by a single
organization (e.g., Hyperledger Fabric).
o Consortium Blockchain: Controlled by a group of organizations that share
authority (e.g., R3 Corda used in finance).
o Hybrid Blockchain: Combines features of both public and private
blockchains (e.g., Dragonchain allows public access for some data while
keeping other data private).
3. What is a block? Explain its structure diagrammatically. A block consists of:
o Header: Contains metadata such as the previous block's hash, timestamp, and
nonce.
o Body: Contains the transaction data.
o Hash: A unique identifier for the block.

Structure Diagram:

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---------------------
| Header |
---------------------
| Body |
---------------------
| Hash |
---------------------
4. What is Cryptocurrency? List its examples. Cryptocurrency is a digital currency
that uses cryptographic techniques to secure transactions and control the creation of
new units. Examples include:
o Bitcoin (BTC)
o Ethereum (ETH)
o Ripple (XRP)
o Litecoin (LTC)
5. What is the difference between blockchain and database?
o Blockchain: Decentralized, immutable, and secure; data is stored in linked
blocks and managed collectively.
o Database: Centralized, mutable, and typically managed by a single entity,
allowing for easier modifications and access control.
6. Define key. Differentiate between public and private key. A key is a piece of
information used in cryptography for securing data.
o Public Key: Can be shared with anyone and is used to encrypt data or verify
digital signatures.
o Private Key: Kept secret and used to decrypt data that was encrypted with the
corresponding public key or to create digital signatures.
7. Explain the Digital signature with its working. A digital signature uses asymmetric
cryptography. The sender generates a hash of the message and encrypts it with their
private key to create the signature. The recipient can then decrypt the signature using
the sender's public key to verify that the message has not been altered and is
authentic.
8. Describe the Consensus mechanisms in detail. Consensus mechanisms ensure all
nodes in a blockchain agree on the validity of transactions. Key mechanisms include:
o Proof of Work (PoW): Requires computational effort to validate transactions
(e.g., Bitcoin).
o Proof of Stake (PoS): Validators are chosen based on the amount of
cryptocurrency they hold (e.g., Ethereum 2.0).
o Delegated Proof of Stake (DPoS): Stakeholders elect delegates to validate
transactions on their behalf (e.g., EOS).
9. What is digital currency Bitcoin and Ethereum?
o Bitcoin: The first decentralized cryptocurrency, enabling peer-to-peer
transactions without intermediaries.
o Ethereum: A blockchain platform that supports smart contracts and DApps,
using Ether (ETH) as its native currency.
10. Explain the Blockchain generations.
o First Generation: Focused on digital currencies (e.g., Bitcoin).
o Second Generation: Introduced smart contracts and DApps (e.g., Ethereum).
o Third Generation: Aims to improve scalability, interoperability, and
sustainability (e.g., Cardano, Polkadot).
11. Write down on types of networks.
o Client-Server Network: Centralized structure where clients request services
from a server.
o Peer-to-Peer Network: Decentralized structure where each node can act as
both a client and a server, sharing resources directly.
12. What is hashing? Explain in detail. Hashing is the process of converting input data
into a fixed-size string of characters (a hash) using a hash function. This process is
irreversible, meaning you cannot retrieve the original data from the hash. Hashing is
 essential for maintaining data integrity and security in blockchain, as it ensures that
even minor changes in input lead to completely different hash outputs.
13. Write the Blockchain use cases.
o Supply Chain Management: Enhancing transparency and traceability.
o Healthcare: Securely managing patient records.
o Digital Identity: Verifying identities securely.
o Voting Systems: Ensuring transparent and tamper-proof voting.
o Financial Services: Enabling secure, instant transactions across borders.
o Real Estate: Simplifying property transactions and ownership verification.
14. What is the difference between client-server and peer-to-peer network?
o Client-Server: A centralized model where clients rely on a server for
resources, leading to potential bottlenecks and single points of failure.
o Peer-to-Peer: A decentralized model where all nodes share resources equally,
reducing reliance on any single node and increasing resilience.
15. Write a short note on: Evolution of Blockchain. The evolution of blockchain began
with Bitcoin in 2009, introducing decentralized digital currency. Following this,
Ethereum launched in 2015, enabling smart contracts and decentralized applications.
The technology has continued to evolve, focusing on addressing challenges like
scalability, interoperability, and energy efficiency, leading to innovations like proof-
of-stake consensus mechanisms and hybrid blockchain models.
16. Explain the layered architecture of Blockchain. The layered architecture of
blockchain typically includes:
o Application Layer: Where user applications and interfaces operate.
o Smart Contract Layer: Contains the logic for executing smart contracts.
o Protocol Layer: Defines the rules for consensus

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Chapter 2Short Answer Questions:

1. What is Blockchain? Blockchain is a decentralized digital ledger technology that

securely records transactions across a network of computers, ensuring data integrity
and transparency.
2. Define distributed P2P network. A distributed peer-to-peer (P2P) network is a
decentralized network where each participant (node) can act as both a client and a
server, sharing resources directly without a central authority.
3. Define ledger. A ledger is a record-keeping system that maintains a list of
transactions or entries, ensuring accuracy and accountability in financial and
operational processes.
4. Define nonce. A nonce (number used once) is a value that is added to a block during
mining to ensure that the resulting hash meets certain criteria, often used to maintain
security and prevent replay attacks.
5. What is competing chains? Competing chains occur when two or more versions of
the blockchain exist, usually due to simultaneous mining of blocks. This can lead to
forks where the network has to decide which chain to follow.

6->Define PoW. Proof of Work (PoW) is a consensus mechanism that requires

miners to solve complex mathematical problems to validate transactions and add new
blocks to the blockchain, thus securing the network.
 6. What is meant by consensus protocols? Consensus protocols are rules and methods
used in blockchain networks to achieve agreement among distributed nodes on the
state of the ledger and the validity of transactions.
7. Define mining. Mining is the process of validating transactions and adding them to
the blockchain by solving cryptographic puzzles, typically involving the generation of
a new block.
8. What is a cryptographic puzzle? A cryptographic puzzle is a challenging problem
that requires significant computational effort to solve, used in mining to secure the
blockchain and validate transactions.
9. Define immutable ledger. An immutable ledger is a record that cannot be altered or
deleted once written, ensuring the integrity and permanence of transaction history in a
blockchain.
10. What is SHA? SHA (Secure Hash Algorithm) is a family of cryptographic hash
functions designed to secure data by producing a fixed-size hash value from variable-
sized input data, commonly used in blockchain for integrity checks.

(B) Long Answer Questions:

1. What is a hash function? Explain its purpose and working. A hash function is a
mathematical algorithm that converts an input (or message) into a fixed-size string of
characters, which is typically a hash value. The primary purposes of hash functions
include:
o Data Integrity: Ensuring that data has not been altered by comparing hash
values.
o Security: Making it computationally infeasible to reverse-engineer the
original input from the hash.
o Uniqueness: Minimizing the probability of two different inputs producing the
same hash (collision resistance).

Working: When data is input into a hash function, it produces a hash value based on
that specific input. Even a slight change in the input will result in a completely
different hash, providing a way to verify integrity.

2. Is Blockchain an incorruptible ledger? Describe in detail. Blockchain is often

considered an incorruptible ledger due to its design features:
o Decentralization: Data is stored across multiple nodes, reducing the risk of
centralized manipulation.
o Immutability: Once a block is added, altering it requires consensus from the
network, making tampering extremely difficult.
o Cryptographic Security: Each block contains a hash of the previous block,
creating a chain that ensures that any attempt to modify a block will alter all
subsequent blocks, thus invalidating the chain.

While blockchain is highly resistant to corruption, it is not entirely immune. Human

factors, such as social engineering or poor security practices, can still pose risks.
3. What is the nonce? Explain diagrammatically. The nonce is a value used in the
mining process to generate a hash that meets specific criteria. It is adjusted by miners
to find a valid hash for a new block.

Diagram:

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+------------------+
| Block Data |
+------------------+
| Previous Hash |
+------------------+
| Nonce (variable)|
+------------------+
| Hash |
+------------------+

4. How is nonce used in mining? In mining, miners repeatedly modify the nonce value
in the block header to find a hash that meets the network's difficulty target. This
process involves:
o Combining the block data with the nonce.
o Running the combined data through a hash function.
o Checking if the resulting hash meets the required conditions (e.g., starts with a
specific number of zeros).
o If it doesn't meet the conditions, the miner changes the nonce and tries again.
5. Explain the distributed P2P network. A distributed P2P network consists of
multiple nodes that operate independently while sharing resources directly with each
other. Each node holds a copy of the entire blockchain, enabling:
o Resilience: No single point of failure; if one node goes down, others continue
to function.
o Scalability: New nodes can easily join the network, contributing resources.
o Transparency: All transactions are visible to all participants, promoting trust.
6. Explain Byzantine Fault Tolerance (BFT) in detail. Byzantine Fault Tolerance
(BFT) is a consensus mechanism designed to handle situations where some nodes in
the network may fail or act maliciously. BFT algorithms ensure that:
o A system can reach consensus even if a portion of nodes (up to one-third in
many cases) are faulty or compromised.
o Participants communicate and exchange information to validate transactions.
o The protocol can tolerate arbitrary failures while still achieving reliable
consensus, making it ideal for distributed systems.
7. What are Proof of Work and Proof of Stake? Compare them.
o Proof of Work (PoW): A consensus mechanism requiring miners to solve
complex mathematical puzzles to validate transactions and create new blocks.
It is energy-intensive and can lead to centralization of mining power.
o Proof of Stake (PoS): A consensus mechanism where validators are chosen to
create new blocks based on the number of coins they hold and are willing to
"stake." It is more energy-efficient and encourages holders to participate in
network security.

Comparison:
 o Energy Consumption: PoW is energy-intensive; PoS is more energy-
efficient.
o Security: PoW relies on computational power; PoS relies on economic
incentives.
o Centralization Risk: PoW can lead to centralization among large mining
pools; PoS can lead to wealth concentration but is generally less prone to
mining centralization.
8. Describe the term defense against attackers. Defense against attackers in
blockchain involves implementing security measures to protect the network from
various threats, including:
o Sybil Attacks: Where a single entity creates multiple identities to gain
influence. Solutions include requiring proof of work or stake.
o Double Spending: Prevented by the consensus mechanism ensuring that
transactions are validated and confirmed before being added to the ledger.
o DDoS Attacks: Mitigated through redundancy and decentralization, ensuring
no single point of failure.
9. What is the principle on which Blockchain technology is based? The principle of
blockchain technology is based on decentralization, transparency, and immutability. It
allows multiple parties to participate in a shared, secure, and tamper-proof ledger,
enabling trust and verification without the need for intermediaries.
10. With the help of an example, explain the competing chains. Competing chains
arise when two miners solve a block at nearly the same time, resulting in different
versions of the blockchain. For example, if Miner A finds Block 5 while Miner B also
finds Block 5, the network may split between these two chains temporarily.
Eventually, the chain that continues to receive more confirmations will be accepted as
the "longest" chain, and the other will be discarded.
11. Write a short note on: Cryptographic puzzle. A cryptographic puzzle is a complex
problem that miners must solve to add new blocks to the blockchain. The challenge
typically involves finding a nonce that, when combined with the block data and
hashed, produces a hash that meets predefined criteria (e.g., starts with a certain
number of zeros). This ensures that mining requires substantial computational effort,
thereby securing the network against attacks.
12. With the help of a diagram, describe the process of SHA-256. SHA-256 is a
cryptographic hash function that generates a fixed-size output (256 bits) from input
data of any size.

Diagram of SHA-256 Process:

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Input Data → [Pre-processing] → [Message Schedule] → [Compression Function]
→ Hash Output

• Pre-processing: Data is padded to ensure its length is a multiple of 512 bits.

• Message Schedule: Data is divided into blocks for processing.
• Compression Function: A series of operations transforms the input into the final
hash value.

Short Answer Questions:

 1. What is Ethereum? Ethereum is a decentralized blockchain platform that enables
developers to build and deploy smart contracts and decentralized applications
(DApps). It allows for programmable transactions through its native cryptocurrency,
Ether (ETH).
2. Define Ethereum network. The Ethereum network is a global decentralized network
of computers (nodes) that run the Ethereum software, facilitating the execution of
smart contracts and the processing of transactions on the Ethereum blockchain.
3. Define smart contract. A smart contract is a self-executing contract with the terms of
the agreement directly written into code. It automatically enforces and executes the
contract's terms when predefined conditions are met, reducing the need for
intermediaries.
4. What is EVM? The Ethereum Virtual Machine (EVM) is the runtime environment
for executing smart contracts on the Ethereum network. It provides a sandboxed
environment that allows developers to run code without affecting the network's
overall operation.
5. Define DAO. A Decentralized Autonomous Organization (DAO) is an organization
represented by rules encoded as a computer program, which is transparent and
controlled by its members rather than a central authority. DAOs operate through smart
contracts on the blockchain.
6. What is Ether? Ether (ETH) is the native cryptocurrency of the Ethereum platform.
It is used to facilitate transactions, pay for computational services, and serve as a unit
of account on the network.
7. What is fork? A fork is a change or divergence in the blockchain protocol, resulting
in the creation of a new version of the blockchain. This can occur due to
disagreements among developers or users about changes in protocol rules.
8. What is Gas? Gas is a unit that measures the computational effort required to execute
operations on the Ethereum network. It is used to allocate resources and incentivize
miners for validating transactions and executing smart contracts.

(B) Long Answer Questions:

1. What is the Ethereum Network? Explain with a diagram. The Ethereum Network
is a decentralized platform that allows developers to build and deploy applications
through smart contracts. It consists of nodes that maintain a shared ledger, enabling
peer-to-peer interactions without intermediaries.

Diagram:

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[User] ↔ [Smart Contract] ↔ [EVM]
↘ ↘
[Ethereum Nodes]

Components:

o Nodes: Validate and propagate transactions.

o Smart Contracts: Automated programs that run on the EVM.
o EVM: Executes smart contracts and manages state.
2. What are Smart Contracts (SC)? Describe their working. Smart contracts are
automated agreements written in code on the blockchain. They execute predefined
actions when specific conditions are met.

Working:

o Deployment: A smart contract is deployed on the Ethereum blockchain.

o Triggering: When conditions are met (e.g., payment received), the contract is
triggered.
o Execution: The contract automatically performs specified actions (e.g.,
transferring tokens).
o Finalization: Once executed, the transaction is recorded on the blockchain,
ensuring transparency.
3. What is DAO? Explain in detail. A DAO is an organization that operates through
smart contracts, allowing for collective decision-making and governance without a
central authority.

Key Features:

o Transparency: All transactions and rules are recorded on the blockchain.

o Voting Mechanism: Members can vote on proposals and changes, with voting
power often determined by the amount of tokens held.
o Autonomy: The organization functions automatically based on the code
without needing a centralized management structure.

Example: The DAO was an early venture capital fund created on Ethereum that
allowed token holders to vote on investments.

4. What is Gas? Why is it important in Ethereum? Gas is a fee required to conduct

transactions or execute smart contracts on the Ethereum network. It is essential
because:
o Resource Allocation: Ensures that computational resources are fairly
allocated among users.
o Incentive for Miners: Rewards miners for processing transactions,
maintaining network security.
o Cost Management: Users can prioritize transactions by offering higher gas
prices during times of network congestion.
5. Describe DApps in detail. Decentralized Applications (DApps) are applications that
run on a decentralized network rather than a centralized server. They leverage smart
contracts to enable user interactions directly on the blockchain.

Characteristics:

o Open Source: Code is available for anyone to inspect and contribute.

o Decentralized Storage: Data is stored on a peer-to-peer network, ensuring no
single point of failure.
o User Control: Users have control over their data and interactions without
intermediaries.

Examples: Uniswap (decentralized exchange), Cryptokitties (game).

6. What is a fork? What are some types of forking? Explain with a diagram. A fork
occurs when there is a divergence in the blockchain protocol, creating a new version
of the blockchain.

Types of Forking:

o Hard Fork: A permanent divergence that is not backward-compatible,

resulting in two separate blockchains (e.g., Bitcoin and Bitcoin Cash).
o Soft Fork: A temporary change that is backward-compatible, allowing for the
original chain to remain intact (e.g., upgrades to Bitcoin's protocol).

Diagram:

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Original Blockchain
────────────────
A ─ B ─ C ─ D
↘
E (Hard Fork)

7. Differentiate between hard copy and soft copy.

o Hard Copy: A physical representation of digital data (e.g., printed
documents).
o Soft Copy: A digital representation of data that can be viewed or edited on
electronic devices (e.g., PDFs, Word documents).
8. Why does it cost money to invoke a method on a smart contract? Invoking a
method on a smart contract incurs costs due to:
o Resource Consumption: Executing operations requires computational power,
which consumes network resources.
o Network Security: Fees (gas) incentivize miners to process transactions,
maintaining the integrity and security of the blockchain.
9. With the help of a diagram, describe EVM. The Ethereum Virtual Machine (EVM)
is the runtime environment for executing smart contracts on Ethereum.

Diagram:

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+-----------------------+
| EVM |
+-----------------------+
| Smart Contracts |
| Execution Layer |
+-----------------------+
| State Management |
+-----------------------+
| Gas Management |
+-----------------------+

Components:

o Execution Layer: Runs smart contracts.

o State Management: Keeps track of the current state of the blockchain.
o Gas Management: Calculates and enforces gas limits for transactions.