Blockchain Fundamentals & Architecture Flashcards

What is the 'difficulty adjustment' mechanism in Bitcoin's Proof-of-Work?

Answer: An automatic recalibration every 2,016 blocks to keep average block time near 10 minutes

Every 2,016 blocks (~2 weeks), Bitcoin adjusts the PoW target so that if blocks came faster than 10 minutes the difficulty increases, and if slower it decreases.

In an account-based blockchain model (like Ethereum), how are balances tracked compared to Bitcoin's UTXO model?

Answer: Global state maps each address to a running balance, debited and credited with each transaction

Ethereum's account model stores a global state trie mapping addresses to account objects (balance, nonce, code hash), making balance checks simpler but requiring global state management.

What is a 'blockchain oracle' and why is it needed?

Answer: An external data feed service that provides real-world information to smart contracts

Smart contracts cannot access off-chain data on their own; oracles (e.g., Chainlink) securely bridge real-world data (prices, weather, sports results) onto the blockchain for contract execution.

What is the significance of the 'coinbase transaction' in each Bitcoin block?

Answer: It is the first transaction in a block that creates new Bitcoin as block reward for the miner

The coinbase transaction has no inputs and creates new BTC (block subsidy + fees) paid to the miner's address — it is the only transaction allowed to create coins from nothing.

What problem does the Lightning Network solve in Bitcoin?

Answer: It enables fast, low-fee off-chain payments via bi-directional payment channels settled on-chain

Lightning Network creates a Layer-2 network of payment channels where parties transact off-chain and only broadcast the opening and closing transactions on Bitcoin's base layer.

What is 'block propagation' and why does it matter for blockchain security?

Answer: The time it takes for a newly mined block to reach all network nodes; slower propagation increases fork risk

Slow block propagation increases the chance of temporary forks because two miners may solve blocks before either hears of the other's solution, wasting hash power and risking chain reorganization.

In the context of blockchain, what is a '51% attack'?

Answer: An attack where a single entity controls the majority of mining/staking power and can rewrite recent history

A 51% attack occurs when one entity controls over half the network's hash rate (PoW) or stake (PoS), enabling double-spend attacks by reorganizing recent blocks.