Blockchain Technology Flashcards

What is a blockchain?

Answer: A decentralized digital ledger

A blockchain is fundamentally a distributed, immutable ledger that records transactions across a network of computers. Unlike a central database, it operates without a central authority, with all participants having access to a synchronized copy of the ledger. This decentralized nature enhances security, transparency, and resistance to tampering.

What is the primary purpose of blockchain technology?

Answer: To record and verify digital transactions

The primary purpose of blockchain technology is to provide a secure and transparent way to record and verify digital transactions. Each transaction is grouped into a 'block,' which is then cryptographically linked to the previous block, forming a chain. This creates an unchangeable and verifiable record of all activities on the network, ensuring trust without intermediaries.

What is a block in a blockchain?

Answer: A container of transaction data

In a blockchain, a 'block' is a fundamental data structure that holds a collection of verified transactions. Each block also contains a timestamp, a reference to the previous block's hash, and a cryptographic hash of its own data. Once a block is filled and validated, it is added to the blockchain, becoming a permanent and immutable part of the ledger.

What ensures the integrity of a blockchain?

Answer: Cryptographic hash linking blocks

The integrity of a blockchain is primarily ensured by cryptographic hashing, which links each new block to the previous one. Each block contains a unique hash of its own data and the hash of the preceding block. Any attempt to alter a past transaction would change that block's hash, invalidating all subsequent blocks and making tampering immediately detectable and practically impossible.

What is a smart contract?

Answer: Code that executes agreements automatically

A smart contract is a self-executing contract with the terms of the agreement directly written into lines of code. These contracts run on a blockchain, automatically executing and enforcing the terms when predefined conditions are met, without the need for intermediaries. This provides transparency, immutability, and efficiency for various applications beyond simple currency transfers.

Which consensus mechanism is used by Bitcoin?

Answer: Proof of Work

Bitcoin, the first and largest cryptocurrency, utilizes the Proof of Work (PoW) consensus mechanism. In PoW, miners compete to solve complex cryptographic puzzles to validate new blocks of transactions and add them to the blockchain. This process requires significant computational power, securing the network and preventing fraudulent transactions by making it economically unfeasible to attack.

What is the benefit of decentralization in blockchain?

Answer: Greater transparency and resilience

Decentralization in blockchain technology offers significant benefits, primarily greater transparency and resilience. With no single point of control, all participants can view the ledger, fostering transparency. The distributed nature means the network is highly resistant to attacks or failures, as there's no central server to target, ensuring continuous operation even if some nodes go offline.

Which data structure does a blockchain resemble?

Answer: Linked list

A blockchain is fundamentally a type of linked list data structure. Each 'block' contains data and a pointer (in the form of a cryptographic hash) to the previous block. This sequential linking creates an ordered chain of blocks, where each new block is appended to the end, forming an immutable and chronological record.

Why is immutability important in blockchain?

Answer: To ensure records cannot be changed

Immutability is a core feature of blockchain technology, meaning once a transaction or data block is added to the chain, it cannot be altered or deleted. This permanence ensures the integrity and trustworthiness of the ledger, as all records are tamper-proof and verifiable. It is fundamental for maintaining a secure and transparent history of all cryptocurrency transactions.