Aktu Btech Blockchain Architecture Design KIT-061/KCS-714 Short Question, Notes Pdf

Find out more about B.Tech AKTU Quantum Book Short Question Notes on Blockchain Architecture Design. Discover the fundamentals of distributed ledgers and encryption, as well as insights into secure and transparent data management.

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Unit-I: Introduction to Blockchain (Short Question)

Q1. What do you mean by blockchain? 

Ans. A blockchain is a sort of database. Blockchain is a distributed, immutable ledger that makes it easier to record transactions and track assets.  

Q2. What is the principle on which blockchain technology is based on ?  

Ans. It allows information to be transmitted across users without being copied. 

Q3. What are the properties of blockchain ?

Ans. Following are the properties of blockchain:

• 1. Programmable 
• 2. Secure  
• 3. Immutable 
• 4. Distributed
• 5. Decentralized  
• 6. Time-stamped 

Q4. What do you mean by blocks in blockchain technology ? 

Ans. Blocks are data structures within the blockchain database, where transaction data are permanently recorded. These blocks are linked using cryptographic hash of previous block, timestamp, and list of transactions.

Q5. Explain the need for blockchain. 

Ans. Need for blockchain is due to the following reasons : 

• 1. Faster settlements.  
• 2. Enables secured transactions. 
• 3. Immutable.  
• 4. Ensures transparency. 

Q6. What are the different types of blockchain ? 

Ans. Blockchain technologies can be divided into following three types: 

• 1. Public blockchain 
• 2. Private blockchain 
• 3. Consortium blockchain  

Q7. Why is blockchain a trusted approach ?

Ans. Blockchain is a trusted approach due to the following reasons: 

• 1. Due to its open-source nature, it is easily interoperable with various business apps. 
• 2. It is secure, hacker-proof, and encrypted. 
• 3. There is no centralised authority to control it.
• 4. All participants agreed on how a transaction would be entered onto the blockchain. 
• 5. The transaction is immutable, which means it cannot be changed once it is entered into the blockchain. 

Q8. Name the major elements of the blockchain ecosystem. 

Ans. Following are four main elements of the blockchain ecosystem : 

• 1. Network of nodes. 
• 2. Distributed database.
• 3. Shared ledger. 
• 4. Cryptography. 

Q9. What is a blockchain database ?  

Ans. A blockchain database is one that makes use of blockchain technology to generate an immutable ledger of transactions.  

Q10. What is the difference between blockchain and database ? 

Ans. 

Q11. Name some organizations that use blockchain technology. 

Ans. Following are some organizations that use blockchain technology : 

• 1. Bank and Finance: HSBC, Barclays, VISA.
• 2. Supply Chain: Walmart, Unilever. 
• 3. Healthcare: Pfizer, Change Healthcare, CDC. 

Q12. What are the advantages of blockchain ?

Ans. Following are the advantages of blockchain:

• 1. Accuracy of the chain. 
• 2. Cost reductions. 
• 3. Decentralization. 
• 4. Efficient transactions.  
• 5. Secure transactions. 
• 6. Transparency. 

Q13. Is there any disadvantage to using a blockchain ?

Ans. Following are the disadvantages of blockchain :

• 1. Scalability is an issue. 
• 2. Consume too much energy. 
• 3. Data is immutable. 
• 4. Not completely secure.  
• 5. Cost of implementation. 

Q14. Define digital money.  

Ans. Digital money (or digital cash) is any method of payment that is entirely electronic. Digital money, unlike currency, is not a physically tangible item. Online systems are used to account for and transfer it. Consider Bitcoin. 

Q15. Define cryptocurrency. 

Ans. Cryptocurrency is a digital asset (currency) that allows parties to exchange value. It secures and verifies financial transactions while also controlling the issue of new units of that currency. It does not exist in the physical sense. Bitcoin, Litecoin, Ethereum, Monero, Dash, and other major cryptocurrencies are listed here. 

Q16. What is a ledger ? 

Ans. A ledger is the primary book or computer file used to record and add economic transactions in terms of monetary units. A ledger is a file that is always developing. It keeps a permanent record of all transactions that occur between two parties on the blockchain network. 

Q17. Explain common types of ledgers that are used in blockchain.

Ans. Following are the ledgers used in blockchain:

• A. Centralized ledgers  
• B. Decentralized ledgers 
• C. Distributed ledger

Q18. What are distributed ledgers ?

Ans. A distributed ledger is a database that is shared and synchronised by several persons across multiple sites, institutions, or regions.

Q19. How is blockchain distributed ledger different from a traditional ledger ?  

Ans. 

Q20. What is Bitcoin ?

Ans. Bitcoin is a cryptocurrency that is both digital and global in nature. It enables people to transfer and receive money through the internet. It is the first of its kind technology that allows digital currency to be transferred across the internet without the use of a third party. 

Q21. Name the two types of records that are present in the blockchain database ?

Ans. Following are two types of records in a blockchain database: 

• 1. Transactional Records 
• 2. Block Records 

Both the records can easily be accessed and can integrate with each other without following any complex algorithm. 

Q22. What are on-chain and off-chain transactions ? 

Ans. On-chain transactions: On-chain transactions are those that take place on the blockchain itself. 

Off-chain transactions: Off-chain transactions are those that take place outside of the blockchain rather than on it. 

Q23. What is Ethereum ? 

Ans. Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ethereum is a blockchain-based platform that is best known for its cryptocurrency, Ether, or ETH, or simply Ethereum. 

Q24. What is Ethereum Virtual Machine (EVM) ? 

Ans. The Ethereum Virtual Machine (EVM) is a processing engine that functions as a decentralised computer with millions of executable projects.

Q25. What is a dapp ?

Ans. A decentralized application (dapp) is an application built on a decentralized network that combines a smart contract and a frontend user interface. 

Q26. What is the concept of double spending ?

Ans. 1. Double-spending is a potential problem in a digital currency scheme that allows the same digital token to be spent more than once. 

2. Unlike cash, a digital token is made out of a digital file that may be copied or manipulated.

3. The fundamental reason for double-spending is that digital currency is extremely easy to replicate. 

Q27. What is the difference between Bitcoin blockchain and Ethereum blockchain ?
Ans. 

Q28. What are tokens ?

Ans. A token is a monetary unit issued and defined by a specific organisation and accepted by a specified group of buyers and sellers.  

Q29. What are the different types of tokens ?

                                    OR

What are the different types of tokens used in blockchains ? 

Ans. There are essentially two types of tokens used in blockchains 

• 1. Utility Tokens: Utility tokens are cryptocurrencies that are used for a specified purpose, such as purchasing a specific commodity or service. 
• 2. Security Tokens: A security token represents ownership in an underlying real-world asset. 

Q30. What are blockchain protocols ?

Ans. Blockchain protocols are critical components of blockchain technology that allow information to be transferred automatically and securely across cryptocurrency networks.

Q31. Give examples of blockchain protocols. 

Ans. Following are the examples of blockchain protocols :  

• 1. Hyperledger 
• 2. Multichain 
• 3. Enterprise Ethereum 
• 4. Corda 
• 5. Quorum

Q32. What are Consensus Protocols ?

Ans. Anyone can submit data for storage on a blockchain. As a result, it is critical to have protocols in place to guarantee that everyone agrees on what information to add and what to eliminate. These guidelines are referred to as consensus procedures. 

Q33. Explain permissions in blockchain.

Ans. Access to the network is restricted in some blockchains. This means that permission and roles must be assigned to each node. These blockchains can be regarded of as closed ecosystems that only those with permission can access. 

Q34. What are the benefits of immutability in blockchain ? 

Ans. Following are the benefits of immutability : 

• 1. Complete data integrity. 
• 2. It simplifies auditing. 
• 3. It increases efficiencies. 
• 4. It can be used as Proof of Fault. 

Q35. What do you mean by crypto primitives ?

Ans. Cryptographic primitives, often known as crypto primitives, are low-level cryptographic algorithms that serve as the foundation of a protocol. Hash functions and digital signatures are two common examples of crypto primitives in the blockchain. 

Q36. What is a genesis block ? 

Ans. The genesis block, often known as block 0, is the first block on the Blockchain. It is the only block in blockchain that does not refer to the previous block. It defines the Blockchain parameters for mining blocks, such as the level of difficulty, consensus process, and so on. 

Q37. Define hash chain.

Ans. A hash chain is typically defined as the repeated use of a cryptographic hash function on a given piece of data. This sort of hash cryptography is highly valuable in security configurations. Hash chains make it more difficult for a hacker to steal data by using a single input by giving a succeeding chain. 

Q38. What is Consensus algorithm ?

Ans. A consensus method/algorithm is a fault-tolerant mechanism used in blockchain systems to obtain the necessary agreement among distributed processes on a single data value or network state. 

Q39. Give the types of Consensus algorithm.

Ans. Following are the basic consensus mechanisms used in blockchain systems : 

• 1. Proof of Work (PoW)
• 2. Proof of Stake (PoS)
• 3. Practical Byzantine Fault Tolerance
• 4. Proof of Activity (PoA)
• 5. Proof of Burn Time
• 6. Proof of Capacity
• 7. Proof of Importance 

Q40. Give the steps that are involved in the blockchain project implementation.  

Ans. The blockchain development process consists of the following six stages :

• 1. Identify the goal. 
• 2. Choose the right blockchain platform. 
• 3. Brainstorming and blockchain ideation.
• 4. Proof of Concept (PoC). 
• 5. Visual and technical designs. 
• 6. Development.

Unit-II: Consensus (Short Question)

Q1. What do you understand by consensus ?

Ans. Consensus is the process by which distrusting nodes agree on a final state of data. Different algorithms can be employed to obtain consensus.

Q2. What do you understand by consensus mechanisms ?

Ans. A consensus mechanism is a series of processes taken by all nodes to agree on a proposed state or value. 

Q3. What are the requirements for the consensus protocols ?  

Ans. Following are the various requirements for the consensus protocols : 

• 1. Agreement
• 2. Termination  
• 3. Validity
• 4. Fault tolerant  
• 5. Integrity

Q4. Discuss Proof of Work (PoW). 

Ans. Proof of Work (PoW) was the first consensus protocol utilised in the blockchain network. In each round of consensus, computing power competition picks one node to create a new block. Because it ensures eventual consistency, PoW belongs to the probabilistic-finality consensus procedures. 

Q5. Give advantages of Proof of Work (PoW).  

Ans. Following are the advantages of Proof of Work (PoW): 

• 1. It is highly scalable. 
• 2. High level of security.
• 3. Provides a decentralized method of verifying transactions. 
• 4. Allows miners to earn crypto rewards. 

Q6. Give disadvantages of Proof of Work (PoW). 

Ans. Following are the disadvantages of Proof of Work (PoW): 

• 1. Probability of a “51% attack”. 
• 2. Inefficient with slow transaction speeds and expensive fees. 
• 3. High energy usage. 
• 4. Mining often requires expensive equipment. 

Q7. Why is Proof of Work (PoW) in Bitcoin necessary ?

Ans. PoW is required for security, which prevents fraud and allows for trust. This safeguard ensures that independent data processors (miners) cannot fabricate information about a transaction. PoW is used to safeguard the transaction history of Bitcoin while increasing the difficulty of changing data over time.  

Q8. Give the approaches for improving the scalability of blockchain consensus protocols. 

Ans. Following approaches exist for improving the scalability of blockchain consensus protocols: 

• 1. Increasing the block size. 
• 2. Reducing the transaction size. 
• 3. Reducing the number of transactions processed by nodes.  

Q9. What are permissioned blockchains ?  

Ans. Permissioned blockchains are blockchain networks that require authorization to join. These blockchains can be regarded of as closed ecosystems that only those with permission can access. 

Q10. What are the key characteristics of permissioned blockchains ?

Ans. Following are the key characteristics of permissioned blockchains : 

• 1. Controlled transparency based on the goals of participating organizations. 
• 2. Development by private entities. 
• 3. Lack of anonymity. 
• 4. Lack of a central authority, but a private group authorizes decisions.  

Q11. What are the benefits of permissioned blockchains ?  

Ans. Following are the benefits of permissioned blockchains: 

• 1. Efficient performance 
• 2. Proper governance structure 
• 3. Decentralized storage 
• 4. Cost-Effective  

Q12. What are the drawbacks of permissioned blockchains ? 

Ans. Following are the drawbacks of permissioned blockchains: 

• 1. Compromised security 
• 2. Control, Censorship, and Regulation 

Q13. Differentiate between permissioned and permissionless blockchain.  

Ans. 

Q14. Give the names of consensus protocol for permissioned blockchain networks. 

Ans. Following are various types of consensus protocol for permissioned blockchains: 

• 1. Practical Byzantine Fault Tolerance (PBFT) Consensus. 
• 2. Federated Consensus.  
• 3. Round Robin Consensus. 

Unit-III: Hyperledger Fabric (Short Qiestion)

Q1. What is Hyperledger Fabric ?

Ans. Hyperledger Fabric is intended to provide as a modular, scalable, and secure platform for industrial blockchain solutions. It promotes a collaborative approach to blockchain technology development through a community mechanism that promotes open development and the acceptance of essential standards. 

Q2. Mention the key design features of Hyperledger Fabric model. 

Ans. Following are the key design features of Hyperledger Fabric model : 

• 1. Assets  
• 2. Chaincode
• 3. Ledger Features 
• 4. Privacy
• 5. Security and Membership Services
• 6. Consensus 

Q3. What are the advantages of Hyperledger Fabric ? 

Ans. Following are the advantages of Hyperledger Fabric :

• 1. Rich queries 
• 2. Modular architecture  
• 3. Protection of digital keys and sensitive data
• 4. Permissioned data
• 5. Performance and scalability

Q4. Differentiate between blockchain and hyperledger. 

                                                    OR

Differentiate between the term hyperledger and blockchain ? 

Ans. 

Q5. What do you mean by Identity in a blockchain network ?

Ans. 1. A blockchain network has many actors such as peers, orderers, client applications, administrators, and others. 

2. Each of these actors possesses a digital identity that is protected by an X.509 digital certificate.

3. In a blockchain network, these identities establish the exact permissions over resources and access to information that actors have. 

Q6. What do you mean by Membership Service Provider (MSP) ?

Ans. MSPs are used to identify organisations that network members trust. MSPs also serve as the mechanism by which members are assigned roles and rights within the network. The mechanism that allows you to participate in a permissioned blockchain network is known as the MSP. 

Q7. What is a policy ?

Ans. A policy is a set of rules that outline the structure for making decisions and achieving particular results. 

Q8. Name the components of Hyperledger Fabric.

Ans. A Hyperledger Fabric network has following components:

• 1. Assets
• 2. Shared ledger
• 3. Smart Contract  
• 4. Peer nodes
• 5. Ordering service 
• 6. Channels
• 7. Hyperledger Fabric CA (Certificate Authority) 

Q9. What is Chaincode ?  

Ans. Chaincode refers to programmes that run on top of the blockchain to execute the business logic that governs how applications interact with the ledger. 

Q10. Mention the parameters required in chaincode design. 

Ans. Following are the parameters required in chaincode design: 

• 1. Composite keys 
• 2. Range queries
• 3. State queries and CouchDB
• 4. Indexes 
• 5. ReadSet and WriteSet  
• 6. Multiversion concurrency control 

Q11. Mention the steps involved in the implementation of chaincode functions. 

Ans. Following steps are involved in the implementation of chaincode functions:

• 1. Defining chaincode assets
• 2. Coding chaincode functions  
• 3. Creating an asset
• 4. Reading and modifying an asset 
• 5. Main function

Q12. Mention the steps involved in chain code design and implementation. 

Ans. Following steps are involved in chaincode design and implementation : 

• Step 1: Setting up the development environment. 
• Step 2: Creating a chaincode. 
• Step 3: Access control. 
• Step 4: Implementing chaincode functions.
• Step 5: Testing chaincode. 

Q13. What are Hyperledger Fabric SDKs ?

Ans. Applications can communicate with a Fabric blockchain network using the Hyperledger Fabric SDK. It provides a simple API for submitting transactions to a ledger or querying its contents with minimal code. 

Q14. What is Fabric front-end ?  

Ans. The front-end is often built in HTML and serves as the application’s user interface. A blockchain application’s front-end is quite similar to that of a standard web application. Front-end devices can access the same CDNs and libraries as traditional web applications. 

Q15. What is Hyperledger Composer tool ? 

Ans. Hyperledger Composer is a collection of collaboration tools for constructing blockchain business networks. It speeds up the creation and deployment of smart contracts and blockchain applications across a distributed ledger. 

Q16. What are the components of Hyperledger Composer ? 

Ans. Hyperledger Composer includes the following main components: 

• 1. Business network archive. 
• 2. Composer playground. 
• 3. REST API support and integration capabilities. 

Q17. What are the benefits of using Hyperledger Composer tool ? 

Ans. Following are the benefits of using Hyperledger Composer tool: 

• 1. More rapid development of blockchain applications. 
• 2. Eliminating the enormous effort necessary to create blockchain apps from the ground up. 
• 3. Risk reduction through well-tested and efficient design 
• 4. Develops reusable assets using best practises. 
• 5. More flexibility since higher-level abstractions make it much easier to iterate.

Unit-IV: Use Case 1 & 2 (Short Question)

Q1. What is the role of smart contract in financial transactions ? 

Ans. A smart contract enables financial transactions to be conducted without the use of an intermediary. It offers the potential to automate the management of securities, deeds, settlements, and claims. 

Q2. What is the feature of blockchain that make its application useful in financial services ?  

Ans. Blockchain employs digital signatures to ensure the transaction’s provenance. The protection of distributed ledger is the primary benefit of blockchain’s resilient design. 

Q3. Mention the benefits of blockchain technology in financial sector.

Ans.

• 1. Transparency 
• 2. Security 
• 3. Secure platform 
• 4. Prevents payment scams 
• 5. Transactions in minutes 

Q4. What is settlement ? 

Ans. Settlement is the process of transferring funds from payer to payee via a central agency with the assistance of their respective banks. 

Q5. How blockchain is used with respect to settlements ?

Ans. Peer-to-peer (P2P) transactions on the blockchain are feasible. It eliminates the need for middlemen. As the system’s “layers” are eliminated, instant payment settlements will be made possible. As a result, blockchain enables rapid settlements in financial services.  

Q6. Discuss the problems associated with KYC (Know Your Customer). 

Ans. 1. The KYC procedure takes a lengthy time because each piece of data must be collected and uploaded individually into the system. 

2. It is believed that 80% of KYC efforts are spent on data collection and processing. 

3. There is also a considerable probability of data entering errors and duplication. 

Q7. How blockchain eliminates the problems associated with KYC (Know Your Customer)? 

Ans. By storing the data in a central repository and generating a reference number, blockchain eliminates inefficiencies and duplication in KYC processes. This reference number is communicated in near real time by all banks and financial organisations. This eliminates the need to collect and verify KYC information on a regular basis.  

Q8. Mention the benefits of blockchain in KYC process. 

Ans. The benefit of a blockchain solution for KYC are: 

• 1. Data quality 
• 2. Lowered turnaround time 
• 3. Reduced manual labor 
• 4. Validation of information accuracy 
• 5. Real-time updated user data 
• 6. Distributed data collection 

Q9. Is blockchain solutions the answer to KYC issues ? 

Ans. No, blockchain cannot solve all of the problems associated with KYC. After acquiring the data, financial institutions must validate the information. Other appropriate technologies must be used for this. 

Q10. Discuss the application of blockchain with respect to Capital Markets. 

Ans.

• 1. Blockchain is essential at every level of the transaction. 
• 2. The blockchain system makes it easier to perform Know Your Customer (KYC) checks. 
• 3. It increases transparency and verification of assets while lowering credit risk. 
• 4. During the trading stage, it ensures real-time transactions in a more transparent and secure manner, as well as automatic reporting. 
• 5. In post-trade, blockchain eliminates the requirement for central clearance, which is required for real-time cash transactions. 

Q11. How investors in capital markets are benefitted from blockchain ?

Ans. 1. Blockchain technology drastically lowers the cost of creating new assets or financial products. 

2. Because to blockchain, the cost of issuing new shares has decreased while the speed of issuance has increased. 

3. Issuers will be able to design new instruments to the demands of each investor by using blockchain. 

Q12. How is blockchain transforming the insurance sector ?

Ans. Blockchain is revolutionising the insurance industry by improving business operations and information exchange with greater efficiency, security, and transparency. 

Q13. Name some insurance verticals that are benefited by blockchain technology. 

Ans. Blockchain technology provides benefits to following insurance verticals:  

• 1. Health insurance 
• 2. Life insurance
• 3. Auto insurance
• 4. Travel insurance 

Q14. How blockchain technology can be used for claims settlements in insurance sector? 

Ans. 1. Claims can be settled with the use of a custom smart contract. 

2. This smart contract takes multiple insurance policy details and automates the operation using trustless identity verification mode. 

3. A smart contract can process cash for claim settlement via a distributed ledger technology.  

Q15. How blockchain technology can be used for underwriting in insurance sector ? 

Ans. Underwriting entails calculating the level of coverage on the policy for the policyholder as well as the annual premium charge. It is a time-consuming process that requires a high level of data analysis. Data analysis can be done automatically with the help of blockchain tools. 

Q16. How blockchain technology can be used for reinsurance in insurance sector ?  

Ans. The term “reinsurance” refers to “insurance of insurance companies.” Blockchain can be used in reinsurance by automating all computations, balances, and reconciliation. It can assist insurance companies in analysing financial risks and enhancing their overall reinsurance strategy. 

Q17. How blockchain technology can be used in trade/supply chain ? 

Ans. 1. The logistics industry, freight, trucking, shipping, and other types of transportation are all interwoven into the supply chain. 

2. There is an urgent need to streamline and transparent its system. 

3. Blockchain is ideal for supply chain management, allowing for real-time tracking of items. 

Q18. What are the benefits of decentralization of supply chain management ?

Ans. Following are the benefits of decentralization of supply chain management :

• 1. Bringing traceability and transparency in the system. 
• 2. Improved inventory management. 
• 3. Lower courier costs.  
• 4. Less paperwork. 
• 5. Faster issue identification. 

Q19. What do you mean by “provenance of goods” in supply chain ?

Ans. In the supply chain industry, “provenance of goods” refers to the ability to identify the origin location of a product. 

Q20. How blockchain technology can be used in provenance of goods ? 

Ans. 1. Due to the start of globalisation, determining the provenance (origin) of items has become exceedingly difficult.

2. Using embedded sensors and RFID tags, blockchain enables provenance tracking and quick access to product information. 

3. Blockchain can give total data visibility and a single source of truth by documenting the provenance of items to a single shared ledger.  

Q21. What does visibility in supply chain mean?  

Ans. The capacity to track individual components, subassemblies, and finished goods as they journey from supplier to manufacturer to consumer is referred to as supply chain visibility (SCV). 

Q22. Explain how blockchain helps in supply chain visibility (SCV) ? 

Ans. 1. Blockchain has the ability to provide upstream visibility in supply chains. 

2. This is largely due to the technology’s decentralised, consensus-based trust mechanism. 

3. Blockchain technologies improve decision-making by allowing stakeholders to see timely, accurate, and reliable information. 

Q23. What do you understand by supply chain finance ?

Ans. Supply Chain Financing (SCF) is a financial management solution that increases working capital for both suppliers and purchasers.

Q24. What are the advantages of blockchain in supply chain finance ? 

Ans.  Advantages of blockchain in supply chain finance include : 

• 1. Decentralized and secure databases. 
• 2. Anonymous and inexpensive transactions. 
• 3. Smart contracts and product traceability. 

Q25. What are the limitations of blockchain in supply chain finance ?  

Ans. Limitations of blockchain in supply chain finance : 

• 1. Validation of successful adoption of blockchain technology. 
• 2. Integration with existing IT systems. 
• 3. Scalability. 
• 4. Lack of computing power. 
• 5. Regulatory and legal governance. 

Q26. What is invoice management/processing ?

Ans. Invoice management (also known as invoice processing) is the process by which businesses track and pay supplier bills. 

Q27. Describe the role of blockchain in invoice management. 

Ans. Blockchain technology has the potential to simplify invoice processing, save costs, shorten payment times, and increase corporate agility.

Q28. What is invoice discounting ? 

Ans. Invoice discounting is a financial option offered to businesses by finance companies. During the invoice discounting procedure, the company leverages its customers’ unpaid invoices as collateral to obtain cash advances that enhance its working capital and cash flow position. 

Q29. Describe the role of blockchain in invoice discounting.  

Ans. 1. The use of blockchain technology improves the overall invoice discounting process. 

2. The blockchain’s trust and security features eliminate the need for on-site audits of receivables and debtors. 

3. Blockchain adoption will also enable faster and less expensive value transfer. 

Unit-V: Use Case 3 (Short Question)

Q1. What are the benefits of blockchain-based government ?

Ans. A blockchain-based government enables the following advantages : 

• 1. Security of government, citizen, and commercial data. 
• 2. Decrease in labor-intensive processes. 
• 3. Reduction of unnecessary costs connected with responsibility management. 
• 4. Less opportunity for corruption and misuse. 
• 5. Enhanced trust in the government and online civic systems. 

Q2. What are the problems associated with existing digital identity management system? 

Ans. 1. Due to the lack of a centralised infrastructure for digital identity management, individuals must verify and authenticate their identities at all times and in all locations. 

2. Current digital identity management systems rely on biometric identification, which is password-protected and kept in an unprotected system. 

3. These vulnerable systems are vulnerable to data theft and hacking. 

Q3. Discuss the role of blockchain in overcoming existing identity management problems. 

Ans. By establishing a new model of identity management utilising BCT, blockchain’s decentralized process of identity management aids in the resolution of all existing challenges. To improve security, cryptography is used to segregate data from individuals’ identities. 

Q4. Name some use cases for blockchain application in identity management. 

Ans. Following are some use cases for blockchain application in identity management :

• 1. Data collection and its analysis 
• 2. E-Residency 
• 3. Immigration and identity 
• 4. Self-sovereign identities 

Q5. What are the factors contributing to the growing problems of land records ? 

Ans. Factors contributing to the growing problems of land records are : 

• 1. Discrepancies with the paperwork. 
• 2. Forged documents and counterfeit titles. 
• 3. Occasional loss of all documents.  

Q6. Discuss the role of blockchain in overcoming existing problems of land records ? 

Ans. 1. Due to its transparency, blockchain is an effective technology for use in public record systems, title registration, and land right management. 

2. Blockchain technology enables users to effortlessly secure transaction deeds by entering the data and submitting them to distributed document storage with immutable records.

Q7. What type of records can be kept in a blockchain ? 

Ans. Following are two types of records that can be kept in the blockchain: 

• 1. Transactional Records 
• 2. Block Records 

Both these records can be easily accessed. It is also possible to integrate them without following the complex algorithms. 

Q8. What are the benefits of blockchain in healthcare ?

Ans. Blockchains in healthcare can be envisaged in five primary areas: 

• 1. Managing electronic medical record (EMR) data. 
• 2. Protection of healthcare data. 
• 3. Personal health record data management. 
• 4. Point-of-care genomics management. 
• 5. Electronics health records data management.  

Q9. Name some of the notary services.

Ans. Following are some of the notary services : 

• 1. Birth and death details, 
• 2. Documentation for new identity, 
• 3. Receiving educational certificate, 
• 4. Transfer of ownership titles. 

Q10. Discuss the role of blockchain in notary services ? 

Ans. 1. Currently, many notary services are performed on private databases or through brick-and-mortar offices, both of which are prone to inaccuracies. 

2. All of these recorded data will be safely saved due to the encryption of the data and information stored in a blockchain. 

3. Only the owner or authorised persons will be able to view the recorded data. 

Q11. What do you understand by Public Distribution System (PDS) ?

Ans. The public distribution system is a government-sponsored chain of stores tasked with supplying basic food and non-food commodities to the needy sectors of society at extremely low costs. 

Q12. Mention the cryptographic algorithms used in blockchain. 

Ans. Blockchains mainly make use of two types of cryptographic algorithms:

• 1. Hash functions  
• 2. Asymmetric-key algorithms 

Q13. Give the privacy issues of blockchain technology.

Ans. Following are the privacy issues of blockchain technology:

• 1. The necessary bridge between the physical and cyberspace limits. 
• 2. Sensitive information that is actually stored on the blockchain. 
• 3. The very existence of blockchains. 

Q14. What are the key principles in blockchain that must be followed to eliminate security threats ? 

Ans.  The key principles in blockchain that must be followed to eliminate security threats are: 

• 1. Auditing 
• 2. Securing applications 
• 3. Securing testing and similar approaches
• 4. Database security 
• 5. Continuity planning 
• 6. Digital workforce training 

Q15. Explain the use of cryptography Hash function/Hashing in blockchain network.

Ans. 1. The hash function is a one-way function, which implies that it can be formed from plain text, but it is extremely difficult to derive the plain text from the hash.

2. A hash value is a fixed-length numeric value created by a cryptographic hash algorithm. 

3. It uniquely identifies the data, and the blockchain state is represented by the hash function SHA256. 

Q16. What are the application block identifiers in blockchaining? 

Ans. The cryptographic hash of the block’s header serves as its identify. The specific block is identified in a unique way using these block identifiers. This hash may be generated differently by different blockchains. Bitcoin, for example, employs the double hash of its header as its identification. 

Q17. What is Elliptic Curve Cryptography (ECC) ? 

Ans. Elliptic Curve Cryptography (ECC) is a key-based encryption technique. ECC focuses on pairs of public and private keys for blockchain network decryption and encryption. 

Q18. What is SHA-256 hashing algorithm ?

Ans. 1. The Bitcoin protocol’s hash function and mining method is Secure Hashing method (SHA)-256. 

2. It refers to the cryptographic hash function, which generates a 256-bit result. 

3. It moderates address generation and management, as well as transaction verification. 

4. It is a Secure Hashing Algorithm, which is widely used in digital signatures and authentication. 

Q19. What are encryption in blockchaining and its role in blockchain ?

Ans. Encryption is a method of encrypting data so that only authorised parties may decipher it. Blockchain employs public/private key encryption (RSA Security). This encryption is used by blockchain to keep data safe in the block, so that it can only be decoded by a user who has a valid private key. 

Q20. What are Merkle trees ? How important are Merkle trees in blockchain ?

Ans. A Merkle tree is a data structure that is used in computer science applications.

How important are Merkle trees in blockchain : 

Not at all. They are an optimisation that is utilised for efficiency – they make it quick to add/remove transactions when mining. However, you could easily serialise all transactions in an array, hash it, and include it in the header. However, when compared to arrays, trees are frequently the superior choice. 

Q21. What is Merkle Root ?  

Ans. Merkle root is the name of the tree’s root node. A Merkle root is a straightforward mathematical way for validating the facts on a Merkle tree. 

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