Blockchain Basics UPDATED ACTUAL
Exam Questions and CORRECT Answers
What does decentralization mean? - CORRECT ANSWER - Decentralization means the
network operates on a user-to-user (or peer-to-peer) basis.
what is a distributed immutable ledger? - CORRECT ANSWER - A Distributed Immutable
Ledger means the data doesn't sit on one all-powerful server and the data stored in it cannot be
deleted or edited
Transactions bring about transfer of value in Bitcoin Blockchain. The concept UTXO defines the
inputs and outputs of such a transaction.
Once a block is verified and algorithmically agreed by the miners, it is added to the chain of
blocks, viz., the blockchain.
What is UTXO? - CORRECT ANSWER - An Unspent Transaction Output (UTXO) can be
spent as an input in a new transaction.
The main operations in a blockchain are transaction validation and block creation with the
consensus of the participants. Yet, there are many underlying implicit operations, as well.
What is a smart contract? - CORRECT ANSWER - A Smart Contract provides the very
powerful capability of "code execution" for embedding business logic on a Blockchain.
Significant innovations such as smart contracts have opened up broader applications for
blockchain technology. Private and permissioned- blockchains allow for controlled access to the
blockchain, enabling many diverse business models.
Explain private vs public blockchain - CORRECT ANSWER - In a Private Blockchain,
access to the Blockchain is limited to selected participants.
, Permissioned or Consortium Blockchain has the benefits of a public blockchain with allowing
only users with "permission" to collaborate and transact.
Address - CORRECT ANSWER - In cryptocurrency, these are used to send or receive
transactions on the network, they usually present themselves as a string of alphanumeric
characters.
ASIC (Application Specific Integrated Circuit) - CORRECT ANSWER - Often compared
to GPUs these are specially made for mining and may offer significant power savings
Bitcoin - CORRECT ANSWER - The first decentralized, open source cryptocurrency that
runs on a global peer to peer network, without the need for middlemen and a centralized issuer.
Block - CORRECT ANSWER - These are packages of data that carry permanently
recorded data on the blockchain network.
Blockchain - CORRECT ANSWER - a shared ledger where transactions are permanently
recorded by appending blocks. These serve as a historical record of all transactions that ever
occurred, from the genesis block to the latest block, hence its name.
Block Explorer - CORRECT ANSWER - An online tool to view all transactions, past and
current, on the blockchain. They provide useful information such as network hash rate and
transaction growth.
Block Reward - CORRECT ANSWER - A form of incentive for the miner who
successfully calculated the hash in a block during mining. Verification of transactions on the
blockchain generates new coins in the process, and the miner is rewarded a portion of those.
Central Ledger - CORRECT ANSWER - A ledger maintained by a central agency.
Confirmation - CORRECT ANSWER - The successful act of hashing a transaction and
adding it to the blockchain.
Exam Questions and CORRECT Answers
What does decentralization mean? - CORRECT ANSWER - Decentralization means the
network operates on a user-to-user (or peer-to-peer) basis.
what is a distributed immutable ledger? - CORRECT ANSWER - A Distributed Immutable
Ledger means the data doesn't sit on one all-powerful server and the data stored in it cannot be
deleted or edited
Transactions bring about transfer of value in Bitcoin Blockchain. The concept UTXO defines the
inputs and outputs of such a transaction.
Once a block is verified and algorithmically agreed by the miners, it is added to the chain of
blocks, viz., the blockchain.
What is UTXO? - CORRECT ANSWER - An Unspent Transaction Output (UTXO) can be
spent as an input in a new transaction.
The main operations in a blockchain are transaction validation and block creation with the
consensus of the participants. Yet, there are many underlying implicit operations, as well.
What is a smart contract? - CORRECT ANSWER - A Smart Contract provides the very
powerful capability of "code execution" for embedding business logic on a Blockchain.
Significant innovations such as smart contracts have opened up broader applications for
blockchain technology. Private and permissioned- blockchains allow for controlled access to the
blockchain, enabling many diverse business models.
Explain private vs public blockchain - CORRECT ANSWER - In a Private Blockchain,
access to the Blockchain is limited to selected participants.
, Permissioned or Consortium Blockchain has the benefits of a public blockchain with allowing
only users with "permission" to collaborate and transact.
Address - CORRECT ANSWER - In cryptocurrency, these are used to send or receive
transactions on the network, they usually present themselves as a string of alphanumeric
characters.
ASIC (Application Specific Integrated Circuit) - CORRECT ANSWER - Often compared
to GPUs these are specially made for mining and may offer significant power savings
Bitcoin - CORRECT ANSWER - The first decentralized, open source cryptocurrency that
runs on a global peer to peer network, without the need for middlemen and a centralized issuer.
Block - CORRECT ANSWER - These are packages of data that carry permanently
recorded data on the blockchain network.
Blockchain - CORRECT ANSWER - a shared ledger where transactions are permanently
recorded by appending blocks. These serve as a historical record of all transactions that ever
occurred, from the genesis block to the latest block, hence its name.
Block Explorer - CORRECT ANSWER - An online tool to view all transactions, past and
current, on the blockchain. They provide useful information such as network hash rate and
transaction growth.
Block Reward - CORRECT ANSWER - A form of incentive for the miner who
successfully calculated the hash in a block during mining. Verification of transactions on the
blockchain generates new coins in the process, and the miner is rewarded a portion of those.
Central Ledger - CORRECT ANSWER - A ledger maintained by a central agency.
Confirmation - CORRECT ANSWER - The successful act of hashing a transaction and
adding it to the blockchain.
