Blockchain Exam 2 UPDATED ACTUAL
Exam Questions and CORRECT Answers
How does Proof-of-Work work? - CORRECT ANSWER - Challenger provides puzzle and
solver expends resources to solve puzzle
PoW for blockchains - CORRECT ANSWER - PoW is the cornerstone of open
blockchains: some waste, effective security.
Bitcoin used PoW for sybil protection with a direct monetary compensation for solving the
puzzle
Bitcoin PoW - CORRECT ANSWER - Block created every 10 mins
Automatically adjusting difficulty for miners
Pool mining - CORRECT ANSWER - A group of miners who share their processing
power over a network, to split the reward equally
How are open pools and centralization a problem for bitcoin? - CORRECT ANSWER -A
threat to the blockchain's premise because if these pools grow and control 51% of the mining;
they would have control of the network.
Factors influencing revenue - CORRECT ANSWER - less miners ==> reduced difficulty
Is honest pool mining an Equilibrium? - CORRECT ANSWER - Honest pool mining is
NOT an equilibrium.
A single feasible equilibrium point would mean both pools are attacking each other.
The miners dilemma - CORRECT ANSWER - if poolOne attacks and poolTwo doesnt
then poolOne has a leverage.
,if poolOne attacks and poolTwo attacks then both pools are at equilibrium
PoW architecture leads to what surprising properties? - CORRECT ANSWER - - The
miner's dilemma
- pooled mining
- industrial mining
- selfish mining
- non-standard proof-of-work
- proof of work outsourcing
- proof of work in face of chain forks
How does selfish mining work? - CORRECT ANSWER - if we gain a lead: withhold
blocks mine on private chain
else if lead shrinks, but is still at least 2: reveal blocks to keep abreast with public chain
else if lead drops below 2: reveal all blocks mine on public chain
(If blocks are put at the same time hope the honest miners will mine on top of it)
the selfish mining strategy is more profitable than the honest strategy depending on how many
honest miners there are)
Finding mining profitability - CORRECT ANSWER - ((Your Hashrate / Network
Hashrate) * (Block Reward * Block Time) * Coin Price) - (Price per kWh * Rig kWh
Consumption) = Your expected net profit
Describe the 'nothing-at-stake' problem? - CORRECT ANSWER - If someone has nothing
to lose, regarding the transaction, there is no reason for them to not act maliciously. Therefore an
individual could attempt to cause havoc within the network via attack methods with little risk to
themselves.
, What was the first coin to implement proof of stake? - CORRECT ANSWER - Peercoin
was the first coin to implement proof of stake.
How does proof of burn work? - CORRECT ANSWER - In proof of burn, a person will
"pay" for the privilege of mining by sending coins to a "burn" address where the coins are
irretrievable. By "burning" these coins, the person is eligible for mining privileges via random
selection.
What is the main problem with proof of elapsed time? - CORRECT ANSWER - The
primary issue with this proof is that you must put all your trust in Intel which effectively
centralizes the proof, going against the foundations of public blockchains.
What are the main components of the stellar consensus model? - CORRECT ANSWER -
The main components of the Stellar consensus model are the Nodes, the Quorum slices, and the
Quorum intersections.
Can you explain how quorum is reached? - CORRECT ANSWER - In a distributed
system, a potential solution is presented by a node. Another node, that trusts the presenting node,
validates and reaches agreement on said solution. This continues until all nodes are in agreement
of the solution (Quorum Intersection) or there is a disagreement between the nodes (Disjointed
Quorum).
what is the main challenge SCP solves? - CORRECT ANSWER - SCP solves the problem
of lockup of the Quorum due to Disagreement between the nodes.
How would you improve the SCP? - CORRECT ANSWER - Limit the number of
Quorums that can be made between nodes is a possible solution, or finding a way to lower
divergence between nodes.
What does SCP stand for? - CORRECT ANSWER - Stellar Consensus protocol
Proof-of-work vs Proof-of-stake - CORRECT ANSWER - PoW: Miners have voting
power proportional to the computational power.
Exam Questions and CORRECT Answers
How does Proof-of-Work work? - CORRECT ANSWER - Challenger provides puzzle and
solver expends resources to solve puzzle
PoW for blockchains - CORRECT ANSWER - PoW is the cornerstone of open
blockchains: some waste, effective security.
Bitcoin used PoW for sybil protection with a direct monetary compensation for solving the
puzzle
Bitcoin PoW - CORRECT ANSWER - Block created every 10 mins
Automatically adjusting difficulty for miners
Pool mining - CORRECT ANSWER - A group of miners who share their processing
power over a network, to split the reward equally
How are open pools and centralization a problem for bitcoin? - CORRECT ANSWER -A
threat to the blockchain's premise because if these pools grow and control 51% of the mining;
they would have control of the network.
Factors influencing revenue - CORRECT ANSWER - less miners ==> reduced difficulty
Is honest pool mining an Equilibrium? - CORRECT ANSWER - Honest pool mining is
NOT an equilibrium.
A single feasible equilibrium point would mean both pools are attacking each other.
The miners dilemma - CORRECT ANSWER - if poolOne attacks and poolTwo doesnt
then poolOne has a leverage.
,if poolOne attacks and poolTwo attacks then both pools are at equilibrium
PoW architecture leads to what surprising properties? - CORRECT ANSWER - - The
miner's dilemma
- pooled mining
- industrial mining
- selfish mining
- non-standard proof-of-work
- proof of work outsourcing
- proof of work in face of chain forks
How does selfish mining work? - CORRECT ANSWER - if we gain a lead: withhold
blocks mine on private chain
else if lead shrinks, but is still at least 2: reveal blocks to keep abreast with public chain
else if lead drops below 2: reveal all blocks mine on public chain
(If blocks are put at the same time hope the honest miners will mine on top of it)
the selfish mining strategy is more profitable than the honest strategy depending on how many
honest miners there are)
Finding mining profitability - CORRECT ANSWER - ((Your Hashrate / Network
Hashrate) * (Block Reward * Block Time) * Coin Price) - (Price per kWh * Rig kWh
Consumption) = Your expected net profit
Describe the 'nothing-at-stake' problem? - CORRECT ANSWER - If someone has nothing
to lose, regarding the transaction, there is no reason for them to not act maliciously. Therefore an
individual could attempt to cause havoc within the network via attack methods with little risk to
themselves.
, What was the first coin to implement proof of stake? - CORRECT ANSWER - Peercoin
was the first coin to implement proof of stake.
How does proof of burn work? - CORRECT ANSWER - In proof of burn, a person will
"pay" for the privilege of mining by sending coins to a "burn" address where the coins are
irretrievable. By "burning" these coins, the person is eligible for mining privileges via random
selection.
What is the main problem with proof of elapsed time? - CORRECT ANSWER - The
primary issue with this proof is that you must put all your trust in Intel which effectively
centralizes the proof, going against the foundations of public blockchains.
What are the main components of the stellar consensus model? - CORRECT ANSWER -
The main components of the Stellar consensus model are the Nodes, the Quorum slices, and the
Quorum intersections.
Can you explain how quorum is reached? - CORRECT ANSWER - In a distributed
system, a potential solution is presented by a node. Another node, that trusts the presenting node,
validates and reaches agreement on said solution. This continues until all nodes are in agreement
of the solution (Quorum Intersection) or there is a disagreement between the nodes (Disjointed
Quorum).
what is the main challenge SCP solves? - CORRECT ANSWER - SCP solves the problem
of lockup of the Quorum due to Disagreement between the nodes.
How would you improve the SCP? - CORRECT ANSWER - Limit the number of
Quorums that can be made between nodes is a possible solution, or finding a way to lower
divergence between nodes.
What does SCP stand for? - CORRECT ANSWER - Stellar Consensus protocol
Proof-of-work vs Proof-of-stake - CORRECT ANSWER - PoW: Miners have voting
power proportional to the computational power.
