Module 1 - Introduction to Blockchain

What is the primary function of a blockchain?

• To serve as a distributed database of transactions

• To store data in a centralized manner

• To eliminate the need for digital currencies

• To create a single point of failure

Answer explanation

The primary function of a blockchain is to serve as a distributed database of transactions, allowing multiple parties to access and verify data without a central authority, ensuring transparency and security.

Which of the following is a benefit of using blockchain technology?

• Time-saving due to no central authority

• Centralized authority verification

• Higher latency in data access

• Increased transaction costs

Answer explanation

Using blockchain technology eliminates the need for a central authority, which streamlines processes and saves time. This is a key benefit, unlike the other options that suggest increased costs or delays.

What is a key characteristic of a distributed database?

• Data is less reliable than centralized databases

• Data is stored in a single location

• Data is stored across multiple locations

• Data is managed by one administrator

Answer explanation

A key characteristic of a distributed database is that data is stored across multiple locations, allowing for better scalability and reliability compared to centralized databases, which store data in a single location.

What does the Byzantine Generals Problem illustrate?

• The importance of third-party verification

• The benefits of centralized databases

• The difficulty of reliable communication in distributed systems

• The ease of achieving consensus in distributed systems

Answer explanation

The Byzantine Generals Problem illustrates the difficulty of reliable communication in distributed systems, highlighting how challenges arise when parties must reach consensus despite potential failures or malicious actors.

Which consensus mechanism requires miners to solve cryptographic puzzles?

• Proof of Stake

• Delegated Proof of Stake

• Proof of Authority

• Proof of Work

Answer explanation

Proof of Work is the consensus mechanism that requires miners to solve cryptographic puzzles to validate transactions and create new blocks, unlike Proof of Stake, Delegated Proof of Stake, and Proof of Authority.

What is the main advantage of blockchain over conventional distributed databases?

• Immutability of data

• Limited transparency

• Centralized management

• Higher maintenance costs

Answer explanation

The main advantage of blockchain is its immutability of data, meaning once information is recorded, it cannot be altered or deleted. This ensures a higher level of trust and security compared to conventional distributed databases.

Which of the following is NOT a type of blockchain?

• Public Blockchain

• Private Blockchain

• Centralized Blockchain

• Hybrid Blockchain

Answer explanation

A Centralized Blockchain is not a recognized type of blockchain. Public, Private, and Hybrid Blockchains are all decentralized or semi-decentralized, while Centralized implies a single point of control, contradicting blockchain principles.

What is the purpose of gas in blockchain transactions?

• To increase transaction fees

• To centralize transaction processing

• To measure computational work required

• To limit the number of participants

Answer explanation

Gas in blockchain transactions measures the computational work required to execute operations. It ensures that users pay for the resources consumed, preventing abuse of the network and maintaining efficiency.

Which cryptographic technique allows one party to prove a statement is true without revealing additional information?

• Ring Signatures

• Zero-Knowledge Proofs

• Public-Private Key Pair

• Merkle Trees

Answer explanation

Zero-Knowledge Proofs allow one party to prove the truth of a statement without revealing any additional information, making it the correct choice. Other options do not provide this specific capability.

What is the main challenge of using Proof of Work as a consensus mechanism?

• Decentralized validation

• Fast transaction processing

• Low energy consumption

• High energy consumption

Answer explanation

The main challenge of using Proof of Work is its high energy consumption. This mechanism requires significant computational power, leading to increased energy use, which raises environmental concerns and operational costs.