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Blockchain Module1 Answers

Blockchain is a decentralized digital ledger that records transactions across a network, ensuring security and transparency through characteristics like decentralization, immutability, and consensus-driven validation. It differs from Bitcoin, which is a cryptocurrency that operates on the blockchain, focusing solely on peer-to-peer value transfer, while blockchain technology can be applied in various fields beyond finance. Overall, blockchain revolutionizes record-keeping by eliminating intermediaries and reducing fraud.

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26 views1 page

Blockchain Module1 Answers

Blockchain is a decentralized digital ledger that records transactions across a network, ensuring security and transparency through characteristics like decentralization, immutability, and consensus-driven validation. It differs from Bitcoin, which is a cryptocurrency that operates on the blockchain, focusing solely on peer-to-peer value transfer, while blockchain technology can be applied in various fields beyond finance. Overall, blockchain revolutionizes record-keeping by eliminating intermediaries and reducing fraud.

Uploaded by

2023.aarya.gharmalkar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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1. Define Blockchain. Explain Blockchain with its characteristics.

(Ref: Pages
6-10, 20-23)

Blockchain is a decentralized, distributed digital ledger that records transactions across multiple computers
in a network, ensuring confidentiality, integrity, and privacy without relying on a central authority. Each
record in the blockchain is stored in a block, and each block is connected to the previous one using
cryptographic hash functions, forming an immutable chain of data. Once a block is added, altering its
contents requires altering all subsequent blocks, which is practically impossible, ensuring data security and
transparency. Key Characteristics of Blockchain: 1. Decentralization: Unlike traditional systems controlled
by a single authority, blockchain uses a peer-to-peer (P2P) network where each node maintains a copy of
the ledger. 2. Transparency: Every participant in the network can view and verify transactions, promoting
trust. 3. Immutability: Once data is recorded, it cannot be altered or deleted due to cryptographic linkage of
blocks. 4. Security: Uses cryptographic algorithms (like SHA-256) to secure transactions and protect data
integrity. 5. Consensus-Driven: Validity of transactions is maintained by consensus mechanisms such as
Proof of Work (PoW) and Proof of Stake (PoS). 6. Trustless Environment: Participants do not need to trust
each other; they trust the system’s verification process. Blockchain thus provides a revolutionary approach
to record-keeping, eliminating intermediaries, reducing fraud, and enabling applications in finance,
healthcare, supply chain, and beyond.

2. Difference between Bitcoin and Blockchain (Ref: Pages 6-8, 25-28)

Blockchain is the foundational technology, while Bitcoin is one of its applications. Blockchain provides the
decentralized ledger system, whereas Bitcoin is a cryptocurrency that operates on this ledger. Blockchain
can be implemented in various domains beyond finance, such as identity management, supply chain, and
IoT, while Bitcoin focuses solely on peer-to-peer value transfer. Additionally, Blockchain supports multiple
consensus protocols, while Bitcoin uses Proof of Work (PoW).

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