Understanding Blockchain Technology

What is a blockchain?

• A blockchain is a physical ledger used for accounting.

• A blockchain is a centralized database managed by a single entity.

• A blockchain is a decentralized digital ledger that records transactions in a secure and immutable way.

• A blockchain is a type of cryptocurrency.

How does blockchain ensure data integrity?

• Data integrity is ensured by regular backups.

• Blockchain relies on user passwords for security.

• Blockchain ensures data integrity by using cryptographic hashes, decentralized consensus, and immutable ledgers.

• Blockchain uses centralized servers for data storage.

What is the role of miners in a blockchain?

• Miners validate transactions and add them to the blockchain.

• Miners design blockchain protocols.

• Miners create new cryptocurrencies.

• Miners store user data securely.

What is a smart contract?

• A type of blockchain used for social media applications.

• A self-executing contract with terms written in code on a blockchain.

• A legally binding agreement signed by two parties in person.

• A digital wallet for storing cryptocurrencies.

Can blockchain be used for purposes other than cryptocurrency?

• No, blockchain is only for cryptocurrency.

• Blockchain can only be used for financial transactions.

• Blockchain is not applicable in supply chain management.

• Yes, blockchain can be used for purposes other than cryptocurrency.

What is the difference between public and private blockchains?

• Private blockchains are accessible to everyone without restrictions.

• Public blockchains are controlled by a single entity.

• Public blockchains are always faster than private blockchains.

• Public blockchains are open and decentralized, while private blockchains are restricted and controlled.

How does decentralization benefit blockchain technology?

• Decentralization eliminates the need for consensus mechanisms.

• Decentralization increases the cost of transactions.

• Decentralization benefits blockchain by increasing security, transparency, and trust while reducing risks of central control.

• Decentralization leads to slower processing times.

What is a cryptocurrency wallet?

• A cryptocurrency wallet is a digital tool for storing, sending, and receiving cryptocurrencies.

• A cryptocurrency wallet is a physical device for storing cash.

• A cryptocurrency wallet is a software for creating cryptocurrencies.

• A cryptocurrency wallet is a type of bank account for fiat currencies.

What are the main components of a blockchain?

• Transactions, Miners, Smart Contracts

• Ledgers, Validators, Tokens

• Blocks, Chain, Consensus Mechanism, Cryptographic Hashes, Nodes

• Databases, Servers, APIs

How does consensus work in a blockchain network?

• Consensus is determined by the fastest transaction processing time.

• Consensus in a blockchain network is achieved through mechanisms like Proof of Work or Proof of Stake, ensuring agreement on the blockchain's state.

• Consensus is achieved through random selection of nodes.

• Consensus relies solely on user votes.