Cryptocurrency Blockchain Technology Fundamentals 5 — Questions and Answers
Question 1: What is 'sharding' as a blockchain scalability solution?
- Splitting a single transaction across multiple blocks
- Partitioning the network so each node only processes a subset of transactions (Correct answer)
- Compressing old blockchain data to free disk space
- Replacing full nodes with lightweight validator sets
Correct answer: Partitioning the network so each node only processes a subset of transactions
Sharding divides the blockchain into parallel partitions (shards), each processing its own transactions, dramatically increasing total throughput without every node handling everything.
Question 2: What is a 'zero-knowledge proof' (ZKP) and how is it used in blockchain?
- A proof that a wallet has zero balance
- A cryptographic method to prove knowledge of data without revealing the data itself (Correct answer)
- A consensus algorithm requiring no computational work
- A smart contract that executes with no gas cost
Correct answer: A cryptographic method to prove knowledge of data without revealing the data itself
ZKPs let one party prove a statement is true (e.g., 'I know a valid transaction') to another party without disclosing any underlying information, enabling privacy and scaling solutions like zk-rollups.
Question 3: What does 'on-chain governance' mean in a blockchain protocol?
- Miners physically meeting to vote on protocol rules
- Protocol upgrade decisions are made and enforced through votes recorded on the blockchain itself (Correct answer)
- A smart contract that automatically patches security bugs
- The process of electing block producers in a PoS system
Correct answer: Protocol upgrade decisions are made and enforced through votes recorded on the blockchain itself
On-chain governance encodes voting and upgrade mechanisms directly in the protocol, allowing token holders to formally propose and ratify changes without relying on off-chain social consensus.
Question 4: What is a 'rollup' in the context of Ethereum scaling?
- A method of combining multiple wallets into one
- A Layer 2 technique that executes transactions off-chain and posts compressed proofs to the main chain (Correct answer)
- A process to roll back invalid blocks on the main chain
- A batching of validator rewards into a single payout
Correct answer: A Layer 2 technique that executes transactions off-chain and posts compressed proofs to the main chain
Rollups bundle many transactions off-chain, submit compressed data or validity proofs to Ethereum's Layer 1, inheriting its security while dramatically increasing throughput and reducing fees.
Question 5: What is 'selfish mining' in Proof-of-Work blockchains?
- A miner keeping all block rewards without sharing with a pool
- A strategy where a miner withholds discovered blocks to gain a disproportionate share of rewards (Correct answer)
- Mining only high-fee transactions and ignoring small ones
- Using more hash power than allowed by the protocol
Correct answer: A strategy where a miner withholds discovered blocks to gain a disproportionate share of rewards
In selfish mining, a pool withholds a newly found block, continues mining secretly, and releases the longer chain later, wasting honest miners' work and earning outsized rewards.
Question 6: What is the 'blockchain trilemma' as described by Vitalik Buterin?
- The three stages of a blockchain transaction: broadcast, validate, confirm
- The trade-off between achieving decentralization, security, and scalability simultaneously (Correct answer)
- Three types of attacks: 51%, Sybil, and Eclipse
- The conflict between miners, developers, and users in governance
Correct answer: The trade-off between achieving decentralization, security, and scalability simultaneously
Buterin's trilemma states that blockchains can typically optimize for only two of three properties — decentralization, security, and scalability — at the expense of the third.
Question 7: What is an 'oracle problem' in blockchain smart contracts?
- The difficulty of predicting future block hashes
- The challenge of securely feeding real-world data into a trustless smart contract (Correct answer)
- An error in Solidity that causes a contract to drain funds
- The inability of older nodes to validate new contract types
Correct answer: The challenge of securely feeding real-world data into a trustless smart contract
Smart contracts can only access on-chain data; oracles bridge external real-world information (prices, weather, events) to the chain, but introduce a trusted intermediary that can be a single point of failure.
Cryptocurrency Blockchain Technology Fundamentals 5
What is 'sharding' as a blockchain scalability solution?