Blockchain

i) What is ICO? An Initial Coin Offering (ICO) is a fundraising method where a company or
project sells tokens to investors in exchange for cryptocurrency (typically Bitcoin or Ether) or
fiat money. It's similar to an Initial Public Offering (IPO) in stocks but for cryptocurrencies.

j) Who owns the Blockchain? No single entity owns a blockchain. It is a decentralized network
maintained by participants (nodes) who validate and record transactions through consensus
mechanisms.

a) What is Gas & Gas Limit?

Gas: In Ethereum, gas refers to the fee required to execute a transaction or smart
contract. It compensates miners for the computational work they perform.
Gas Limit: This defines the maximum amount of gas a user is willing to spend on a
transaction. If the gas limit is too low, the transaction may fail due to insufficient gas.

b) What is Public & Private Blockchain?

Public Blockchain: Anyone can join, read, write, and participate in the network. Examples
include Bitcoin and Ethereum.
Private Blockchain: Permissioned, where only authorized participants can access and
interact with the blockchain. It is often used by enterprises.

c) List & Explain Value Data Types in Solidity:

1. Boolean: Represents true or false.

2. Integer (int/uint): Represents signed (int) or unsigned (uint) integers. Different sizes are
available (e.g., uint8, uint256).
3. Address: Represents a 20-byte Ethereum address.
4. Bytes: A dynamically-sized byte array or fixed-length byte array (e.g., bytes32).
5. String: A dynamically-sized UTF-8 encoded string.
6. Enum: User-defined types for variables that take on a set of predefined values.

e) What is Stream Cipher and Block Cipher?

Stream Cipher: Encrypts data one bit or byte at a time. It is used for real-time systems.
Block Cipher: Encrypts fixed-size blocks of data (e.g., 64-bit or 128-bit blocks). Common
examples are AES and DES.

a) Write a short note on Crypto Wallet: A crypto wallet is a tool that allows users to store,
send, and receive cryptocurrencies. There are two types: hot wallets (connected to the
internet) and cold wallets (offline storage). Wallets store private keys, which give users
control over their assets.

b) What are the tasks of miners? Miners validate transactions, bundle them into blocks, and
add them to the blockchain. They compete to solve cryptographic puzzles (in Proof of Work)
and are rewarded with cryptocurrency for their efforts.
c) Which are the components of Blockchain?

1. Node: A device connected to the blockchain.

2. Block: Data structure containing transactions.
3. Ledger: Immutable record of all transactions.
4. Consensus Mechanism: The process of validating transactions (e.g., Proof of Work or
Proof of Stake).

b) What are the advantages of Smart Contracts?

1. Automation: Self-executing without intermediaries.

2. Transparency: All participants have access to the terms.
3. Security: Encrypted on a blockchain, making them hard to tamper with.
4. Cost-efficient: Reduces the need for third-party intermediaries.

c) What are the layers of Blockchain?

1. Infrastructure Layer: Physical network of nodes.

2. Data Layer: The underlying ledger that stores data.
3. Network Layer: Facilitates communication between nodes.
4. Consensus Layer: Ensures network agreement on transactions.
5. Application Layer: Provides the interface for developers to build applications (DApps).

a) Define Transaction and explain its structure: A transaction in blockchain represents data
exchange or an agreement between two parties, often involving cryptocurrency or smart
contracts.
Structure:

1. Transaction ID: Unique identifier.

2. Inputs: Source of the funds.
3. Outputs: Destination of the funds.
4. Signature: Ensures the transaction is authorized.

d) What are the uses of the SHA algorithm? SHA (Secure Hash Algorithm) is used to:

1. Hash data: Securely store data in a fixed-length format.

2. Digital Signatures: Verify the integrity of digital documents.
3. Proof of Work: Miners solve cryptographic puzzles.
4. Blockchain Address Generation: Create wallet addresses.

e) What is a Smart Contract? A smart contract is a self-executing contract with the terms
directly written into code. It automates and enforces agreements between parties on a
blockchain.

a) Difference between Public and Private Blockchains:

Public Blockchain: Open, decentralized, permissionless.

Private Blockchain: Closed, controlled, permissioned.
b) Blockchains are slower compared to databases. Justify: Blockchain requires consensus
from multiple nodes, cryptographic verification, and decentralized data management, which
makes it slower than traditional databases that centralize control and avoid these overheads.

c) What is P2P Crypto Exchange? A Peer-to-Peer (P2P) exchange allows users to trade
cryptocurrencies directly with each other without an intermediary.

e) What is Hybrid Blockchain? A hybrid blockchain combines aspects of both public and
private blockchains, offering controlled access while maintaining some level of
decentralization and transparency.

b) What is Hard & Soft Forks?

Hard Fork: A permanent divergence in the blockchain, where nodes running the new
software are incompatible with the old.
Soft Fork: A software upgrade that is backward-compatible, meaning non-upgraded
nodes can still interact with upgraded ones.

a) Write a short note on challenges of Blockchain:

Scalability: Difficulty in handling large transaction volumes.

Energy Consumption: High resource demand for consensus (especially in Proof of Work).
Regulation: Uncertainty in legal frameworks.
Security Risks: Vulnerabilities like 51% attacks.

j) Different Value Data Types in Solidity: These are similar to the previous answer (See
question c).

a) Write a short note on First Generation Blockchain: First-generation blockchains, like

Bitcoin, introduced the concept of decentralized digital currency. They focused on financial
transactions with Proof of Work consensus, but lacked the ability to execute complex
applications (smart contracts).

b) Describe EVM with the help of a neat diagram: The Ethereum Virtual Machine (EVM) is a
decentralized computational engine that executes smart contracts. It reads bytecode from
smart contracts and runs them in an isolated environment.

c) What is DApp? A Decentralized Application (DApp) is an application that runs on a

blockchain network, utilizing smart contracts and operating without centralized control.

i) What is Plain Text and Cipher Text?

Plain Text: The original, readable data.

Cipher Text: Data that has been encrypted and is unreadable without a decryption key.

a) What are the advantages of Smart Contract? Answered above (See question b).
b) What is Hard Fork and Soft Fork? Answered above (See question b).

c) What is PoS? Which Blockchain uses PoS? Proof of Stake (PoS) is a consensus mechanism
where validators are chosen based on the amount of cryptocurrency they "stake" as
collateral. Examples include Ethereum 2.0 and Cardano.

d) Explain Symmetric & Asymmetric Key Cryptography:

Symmetric Cryptography: Uses the same key for both encryption and decryption.
Asymmetric Cryptography: Uses a pair of keys (public and private); one encrypts, the
other decrypts.

e) Explain the structure of Blocks in Blockchain: Each block contains:

1. Block Header: Metadata (hash of previous block, timestamp, etc.).

2. Block Data: The list of transactions.
3. Nonce: A value used in Proof of Work.
4. Hash: The unique identifier of the block.

a) Which are the different types of Blockchain?

1. Public Blockchain: Permissionless and open to anyone.

2. Private Blockchain: Permissioned, controlled access.
3. Consortium Blockchain: Controlled by a group of organizations.
4. Hybrid Blockchain: Combines features of public and private blockchains.

b) What are the challenges of Blockchain? Answered above (See challenges of blockchain).

a) Different Data Types in Solidity? Answered above (See question c).

b) Differentiate between Blockchain and Database:

Blockchain: Decentralized, immutable, consensus-driven.

Database: Centralized, mutable, controlled by a single entity.

e) What is Consensus? Consensus is the process by which blockchain participants agree on

the validity of transactions (e.g., PoW, PoS).

f) What is Full Node? A full node stores the complete copy of the blockchain and participates
in the validation of transactions and blocks.

g) What is Remix? Remix is an online IDE for writing, testing, and deploying Solidity smart
contracts on Ethereum.

h) What is Immutable Ledger? An immutable ledger is a permanent, unalterable record of

transactions stored on a blockchain.

j) What is EVM? EVM is the Ethereum Virtual Machine that executes smart contracts in a
decentralized environment.

a) Define Symmetric and Asymmetric Key Cryptography: Answered above (See symmetric
and asymmetric key crypt

e) Explain the structure of Blocks in Blockchain: Each block contains:

1. Block Header: Metadata (hash of previous block, timestamp, etc.).

2. Block Data: The list of transactions.
3. Nonce: A value used in Proof of Work.
4. Hash: The unique identifier of the block.

a) Which are the different types of Blockchain?

1. Public Blockchain: Permissionless and open to anyone.

2. Private Blockchain: Permissioned, controlled access.
3. Consortium Blockchain: Controlled by a group of organizations.
4. Hybrid Blockchain: Combines features of public and private blockchains.

b) What are the challenges of Blockchain? Answered above (See challenges of blockchain).

a) Different Data Types in Solidity? Answered above (See question c).

b) Differentiate between Blockchain and Database:

Blockchain: Decentralized, immutable, consensus-driven.

Database: Centralized, mutable, controlled by a single entity.

e) What is Consensus? Consensus is the process by which blockchain participants agree on

the validity of transactions (e.g., PoW, PoS).

f) What is Full Node? A full node stores the complete copy of the blockchain and participates
in the validation of transactions and blocks.

g) What is Remix? Remix is an online IDE for writing, testing, and deploying Solidity smart
contracts on Ethereum.

h) What is Immutable Ledger? An immutable ledger is a permanent, unalterable record of

transactions stored on a blockchain.

j) What is EVM? EVM is the Ethereum Virtual Machine that executes smart contracts in a
decentralized environment.

a) Define Symmetric and Asymmetric Key Cryptography: Answered above (See symmetric
and asymmetric key cryptography).

b) What is Stream Cipher & Block Cipher? Answered above (See stream cipher and block
cipher).
c) List the Applications of Hash Function:

1. Data integrity verification.

2. Digital signatures.
3. Proof of Work in mining.
4. Address generation in cryptocurrency.

d) What is Gas and Gas Limit? Answered above (See question a).

a) Compare Client-Server & Peer-to-Peer Architecture:

Client-Server: Centralized model where a server provides services to clients.

Peer-to-Peer (P2P): Decentralized model where each node has equal responsibility and
communicates directly with others.

b) Write a short note on ICO: Answered above (See question i).

c) Explain Forking with Types:

Forking: When the blockchain splits into two separate paths due to changes in protocol.
Hard Fork: A permanent divergence (non-compatible with the previous version).
Soft Fork: A backward-compatible upgrade.