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Block chain- A blockchain is a digital ledger of transactions maintained by a network of computers in a way
that makes it difficult to hack or alter.

Blockchain Generations -Blockchain is commonly associated with Bitcoin and cryptocurrency and while
that is a lot more to the technology than digital currency.1)First-Generation Blockchain: Bitcoin in the first
generation, blockchain specifically Bitcoin was created which is a dig. By empowering people with the
technology to perform with one another at a peer-to- peer level, they do not need to depend on
centralized entities such as banks and any financial organization.2)Second-Generation Blockchain:
Ethereum In first generation of blockchain design allows, to send, receive and trade the transactions. But
if any terms and conditions we want in our transactions. Bitcoin is simply can not server that, thus
Ethereum introduced.3)Third-Generation Blockchain: Cardano/Polkadot/Ethereum 2.0 In first and second
generation are exceptional in innovation, there are some fundamental growing problems.

Evolution of Blockchain Technology-1)Bitcoin: Bitcoin is first decentralized cryptocurrency uses peer-to-

peer network without the need for intermediaries.The bitcoin blockchain is a public ledger that records
Bitcoin transactions.2)Litecoin: Litecoin was created in 2011 by Charlie Lee, a former employee of Google.
He designed it to improve on Bitcoin technology, with shorter transaction times, lower fees, more
concentrated miners.3)Ethereum: Ethereum was launched in July 2015 by Vitalik Buterin. Ethereum is the
currently holds the second-largest cryptocurrency after Bitcoin. Ethereum is a blockchain platform with its
own cryptocurrency, called Ether (ETH).4)NEO: It is formerly called Antshares and developed in China, NEO
is very aggressively looking to become a major global cryptocyrrency player. Its focus is smart contracts
(digital contracts) that allow users to create and execute agreements without the use of an intermediary.

Blockchain-1)A Blockchain is a chain of blocks which contain information.2)A Blockchain stores

information in data structures called ‘blocks’.3)A Blockchain is a P2P decentralized Distributed
ledger.4)Blockchain uses a peer to peer distributed network.5)Blockchain Uses Read and Write operation.
Database -1)A Database is a collection of related data.2)Database store data using ‘tables’, in the form of
rows and columns.3)Databases are centralized ledger.4)Database Use Client-server Network/system.
5)The database supports create, read, update and delete operations.

Types of blockchain -1)Public block chain network-The public Blockchain does not require permission and
does not have a single control Server, every transaction is public and users can remain anonymous, so it is
a very rellable type of Blockchain..2)Private Blockchain Network: A private Blockchain is a network
restricted to invited users and controlled by a single enterprise, which determines who can read the
Blockchain, send transactions to the Blockchain, and participate in the consensus process.3)Consortium
Blockchain Network: A consortium Blockchain is a type of semi-decentralized Blockchain network but it is
Permissioned too.4)Hybrid Blockchain Network:Hybrid Blockchain refers to a combination of the public
and private Blockchains. Hybrid Blockchains is a type of Blockchain combines the strong features of both
Private and public Blockchains.

Layered architecture of blockchain-1)Hardware or Infrastructure Layer:The first layer of the Blockchain is

the hardware or infrastructure layer. In the Blockchain the content is hosted in a server that resides in a
data center.2)Data Layer:Data structures of a Blockchain are represented as a linked list includes two
primary Elements i.e., pointers and a linked list of blocks where transactions are ordered.3)Network
Layer:The network layer is also known as the Peer-To-Peer (P2P) layer. It is the one that is Responsible for
inter-node communication and also called propagation layer.4)Consensus Layer:The consensus layer Is the
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essential to the existence of Blockchain platforms.5)Application Layer:Application layer is divided into two
sub layers ie application layer and execution .

Components of blockchain -1)Node Application:A node application specify that every computer,
connected to the internet, if its wants to participate in.Examples of node application are bitcoin wallet
application and bankchain application.2)Distributed/Shared Ledger (Database):The distributed ledger
means the shared databases and contents accessible to the participants of a particular Blockchain
system.3)Consensus algorithm -consensus algorithms are one of major components of a Blockchain
system and they play a vital role in the Blockchain performance and security.

Client-Server Systems -Client-server system/computing/network is architecture of distributed

applications in which most of the resources and services consumed by users (clients) are managed and
exhibited by a centralized server.The server Is an entity that is purely responsible for offering services to
the client; servers provide services like storage, data processing, deploying applications, etc.Clients are the
individual entities which are connected in a network. Client sends a request/query to server and server
responds accordingly.

Peer-to-Peer (P2P) Systems- Peer-to-peer system/network is an architecture, that work is assigned equally
to all system or nodes ie., in the network and all nodes are considered to have the same authority.P2P
system is a network of inter-connected systems in which they are capable of sharing resources and
information. Every system connected to the network is referred to as a node or “peer”.P2P system can be
used in Blockchain technology, transportation services, education. E-commerce, banking and finance, etc.

CRYPTOGRAPHY-Cryptography is an essential for Blockchain technology. The role of cryptography in

Blockchain in terms of maintaining the trust and eliminating intermediates.Types-1)Symmetric Key
Cryptography:Symmetric cryptography is a ‘simple’ form of cryptography which uses a single key to
encrypt and decrypt data.2)Asymmetric Key Cryptography:Blockchain mainly uses asymmetric
cryptography, also known as public-key Cryptography.

Key -A key In cryptography is a piece of information, usually a string of numbers or letters that are stored
in a file, which, when processed through a cryptographic algorithm, can encode or decode cryptographic
data. Types-1)Public key -Public keys, by their nature, are designed to be public and do not need to be
protected. They can be freely given to anyone or even posted on the Internet.2) Private key -The private
key must be kept confidential and never shared.a private key always kept secret whereas a public key can
be shared publically.

Hashing-Hashing plays a very important role in cryptography. Hashing refers to the concept of Taking an
arbitrary amount of input data, applying some algorithm to it, and Generating a fixed-size output data
called the hash.The data is mapped to a fixed size using hashing. In a Blockchain network hash value of
one transaction is the input of another transaction.Hashing is a cryptographic technique which simply
converts a data of any size into a unique fixed size output. The input can be a text, file or image and the
output is fixed size alpha-numeric string.

Digital signature -Digital signature is a digital code which included with an electronically transmitted
document, with this digital code we can verify first of all whether the content of the document is
authenticated or not.Digital signatures are used in Blockchain where the transactions are digitally signed
by senders using their private key before broadcasting the transaction to the network. A digital signature
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is generated using asymmetric cryptography, which is more secure than handwritten signatures that can
be easily Forged. A digital signature is used to prove that a message originates from a specific individual
and not from someone else.

CONSENSUS MECHANISMS-Consensus mechanisms (also known as consensus protocols or consensus

algorithms) allow distributed systems (networks of computers) to work together and stay secure.
Consensus ensures the correct set of operations in the presence of trustless individuals In a distributed
environment.The consensus protocols differ with different Blockchain networks. There are three core
consensus techniques including:1)Proof of Work (PoW) which is the initial Blockchain consensus
mechanism and Was first used by Bitcoin.2)Proof of Stake (POS) which solves the lag of computing power
in PoW. This consensus protocol is more environmentally friendly and is a randomized process used to
determine who will produce the next block. 3)Byzantine Fault Tolerant (BFT) protocols that instrument a
three-phase commit Scheme for Blockchain enlargement.

CRYPTOCURRENCY-Cryptocurrency is a digital currency that works on the decentralized concept and uses
encryption techniques to verify the transactions, maintain the historical records of the entire transactions
and generate new units of currency without the necessity of a central regulatory body to oversee the
process

SMART CONTRACTS-Smart contracts assist we exchange cash, property, shares, or something important
in A very clear, conflict-free means whereas avoiding the services of a middleman. Smart contracts are
translations of an agreement consisting of terms and conditions Into a computational code, which is script.
Application -1)Insurance: Smart contracts can identify false claims and prevent forgeries.2. Copy Righted
Content: Smart contracts can protect ownership rights such as music or books.3. Transportations:
Shipment of goods can be easily tracked using smart contracts. 4. Employment Contract: Smart contracts
can be helpful to facilitate wage Payments.

Blockchain use cases -Blockchain in Capital Markets: Blockchain technology has fundamentally changed
the way financial institutions are exchanging value and building market infrastructure.Blockchain in Energy
and Sustainability: Blockchain technology has the potential to transform the energy sector.Blockchain in
Financial Services: The financial industry is recognizing the transformative impact of Blockchain technology
to generate new revenue.Blockchain in Government and the Public Sector: Governments and public sector
organizations leverage Blockchain technology to move away from siloed and inefficient centralized
systems.Blockchain in Insurance: Blockchain technology will bring about significant Efficiency gains, cost
savings, transparency, faster payouts, and fraud mitigation.

SHA 256 Hash -The Secure Hash Algorithm (SHA) is a family of cryptographic hash functions published by
the National Institute of Standards and Technology (NIST). Cryptographic hash function SHA-256 takes
input of any size and the output is always A fixed size 256 bits (32 bytes).SHA-2 is a widely used standard
in modern cryptographic applications. Bitcoin uses The SHA-256 variant as a hashing algorithm to solve
Proof-of-Work (PoW) puzzles. SHA-3 is the latest family of hash functions with 224, 256-, 384- and 512-bit
variants.

Hash function -A hash function maps the data of any arbitrary size to data of fixed size. Bitcoin uses SHA-
256 hash function that produces a hash (output) of size 256 bits (32 bytes). The process of applying a hash
function on the data is called hashing.
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IMMUTABLE LEDGER -Blockchain is a decentralized, distributed and immutable ledger technology that
operates over a peer-to-peer network. Immutability is defined as the ability of a Blockchain ledger to
remain unchanged/unaltered/modified.Immutable ledger resides in the concept of the hash. If hacker
tries to alter anything in the block its hash will change.

Distributed p2p network -Peer-to-Peer (P2P) network is a decentralized network consists of a group of
devices (nodes) that collectively store and share files where each node acts as an individual Peer.P2P is
known as peer-to-peer network is a decentralized network communications! Model that consists of a
group of devices or nodes that store and share data or file pros where each node acts as an individual
peer.P2P is known as peer-to-peer network is a decentralized network communications Model that
consists of a group of devices or nodes that store and share data or files Where each node acts as an
individual peer.

Nonce-Nonce stands for “Number used only once” i.e., Nonce refers to a number or value that can only
be used once.Nonce is a 32-bit (4 byte) random number which can be used one time. Nonce is often Used
on cryptographic hash functions and authentication protocols.

Cryptographic puzzle- In a cryptographic puzzle, miners generate the hash of a newly created block along
With a cryptographic nonce. The nonce is varied until the hash value becomes smaller Than or equal to
the target value.The target value is a 256-bit number with initial few zeros (e.g., initial 40 zeros). The
Cryptographic hash function used in Bitcoin is Secure Hash Function-256 (SHA-256).The process of solving
the cryptographic puzzle is referred to as Proof-of-Work (POW). PoW is necessary in order to build
consensus among miners in the Blockchain network

BFT -Byzantine Fault Tolerance (BFT) is the ability of a distributed computer network to Function as desired
and correctly reach a sufficient consensus despite malicious Components (nodes) of the system failing or
propagating incorrect information to Other peers.Byzantine Fault Tolerance (BFT) is one of the features of
a distributed network to reach consensus or agreement on the same value even when some of the nodes
in the network fail to respond or respond with incorrect data or information.

Proof of Work (PoW) -The Proof-of-Work (PoW) is a common consensus algorithm used by the most
popular cryptocurrency networks like Bitcoin and Litecoin.The PoW system, Blockchain validators take data
from a block header as an input, and continuously run it through a cryptographic hash function. The PoW
is a common consensus algorithm used by the cryptocurrency networks like Bitcoin and Litecoin.

Proof of Stake (POS) -Proof of Stake (POS) protocols are the consensus mechanisms for Blockchains that
work by selecting validators in proportion to their quantity of holdings in the associated
cryptocurrency.Pos are proof of stake consensus algorithms used by cryptocurrencies to validate
blocks.Proof of Stake (POS) system may execute the algorithm in different ways, in general, the
Blockchain is secured by a pseudo-random election process that considers a nodes allocation and the
allocation determining the commitment of the party to ensure the network.

ETHEREUM NETWORK -Ethereum is the hottest cryptocurrency in the Blockchain at present.

Cryptocurrency is the word that’s used to describe decentralized digitized currencies.The nodes of the
network run the Ethereum Virtual Machine (EVM) and execute the instructions according to the smart
contracts. Ethereum nodes run the EVM to maintain consensus across the Blockchain.An Ethereum
network has all the nodes connected to each other using the P2P network and each node keeps the
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latest copy of the Ethereum Blockchain ledger.Ethereum works as an open software platform
functioning. This Blockchain is hosted on many computers around the world, making it decentralized.

SMART CONTRACT -A smart contract is a self-enforcing agreement embedded in computer code

managed By a Blockchain.The code contains a set of rules under which the parties of that smart contract
agree to interact with each other.

Working -A smart contract is a special kind of program that encodes business logic that runs on a special
purpose virtual machine burn into a Blockchain or other type of distributed ledger.The process of
creating a smart contract starts with business teams working with Developers to describe their
requirements for the wanted, behavior of the smart Contract in response to various events or
occurrences.After the application is developed, it is handed off to another team for a security review.
This could be an internal expert or a firm that specializes in review smart contract security.After the
smart contract is deployed, it is configured to listen to event updates from an oracle, which is essentially
a cryptographically secured streaming data source. The smart contract executes once it receives the
suitable mix of events from one or more oracles.

Advantages Smart Contracts:1)Cost Efficiency: Smart contracts promise to automate business processes
that span organizational boundaries. This can eliminate many operational expenses and save resources,
including the personnel needed.2)Processing Speed: Smart contracts can improve the processing speed
of business processes that run across multiple enterprises.3)Autonomy: Smart contracts are performed
automatically by the network and reduce the need for a third party to manage transactions between
businesses.4)Reliability: Smart contracts can also take advantage of blockchain ledgers and other
distributed ledger technologies to maintain a verifiable record of all activity related to execution of
complex processes

Ethereum Virtual Machine (EVM) -EVM stands for Ethereum Virtual Machine. The purpose of EVM is to
serve as a runtime environment for smart contracts built on Ethereum.EVM is the core engine that runs
the Ethereurn Platform. It is the runtime enviro ment that executes all the smart contracts on the
Ethereum network. The EVM can be considered a Turing complete virtual machine, which means it can
perform any logical step of a computational function.

Ether (ETH):Ethereum uses blockchain technology to allow network users to send and receive payments.
Ether (ETH) is the currency unit of the Ethereum network.Ether is used to pay for transaction fees and
computational services.

Gas:The key concept in Ethereum is that of gas. All transactions on the Ethereum Blockchain are required
to cover the cost of computation they are performing.The gas is used to allocate resources of the
Ethereum virtual machine so that decentralized applications such as smart contracts can self execute in a
secured but decentralized fashion.

DApps -DApp is an abbreviation for decentralized application. A DAPP has its backend code running on a
decentralized peer-to-peer (P2P) network such as the Ethereum blockchain network.A DApp is an
application built on a decentralized network that combines a smart contract and a frontend user
interface. DApps can run on a P2P network or a blockchain network.A DApp has Its backend code
running on a decentralized peer-to-peer network. Contrast this with an app where the backend code is
running on centralized servers.
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DECENTRALIZED AUTONOMOUS ORGANIZATIONS (DAO) -The DAO stands for Decentralized

Autonomous Organization. As the name implies, it is an organization which is both autonomous and
decentralized.DAO runs through rules encoded as a computer program called Smart Contracts. A Smart
Contract is an entity that lives on the internet and exists autonomously.A DAO is an entity with no central
leadership. Decisions get made from the bottom-up, governed by a community organized around a
specific set of rules enforced on Blockchain.

Fork -A fork (new branch of sequence of blocks) in Blockchain is to impart change in the previous version
or divergence from the existing protocol of the Blockchain. Types -1)Hard Fork:A hard fork or hardfork,
as it relates to Blockchain technology, is a radical change to a Network’s protocol that makes previously
invalid blocks and transactions valid, or Vice-versa.A hard fork requires all nodes or users to upgrade to
the latest version of the protocol software.2)Soft Fork:A soft fork is a change to the protocol that is
backward compatible means that the new rules do not exclude the protocol rules that already existed up
to the time of the soft fork. As a result, all nodes and are still capable of generating blocks and joining
the Blockchain.

INITIAL COIN OFFERINGS -An Initial Coin Offering (ICO) or initial currency offering is a type of funding
using cryptocurrencies.It is often a form of crowd-funding, (funding a project or venture by raising small
amounts of money from a large number of people, typically via the Internet).In an ICO, a quantity of
cryptocurrency is sold in the form of “tokens” (“coins”) to Speculators or investors, in exchange for legal
tender or other (generally established And more stable) cryptocurrencies such as Bitcoin or Ether.The
tokens are promoted as future functional units of currency if or when the ICO’s funding goal is met and
the project successfully launches.

Mining -Mining, in the context of Blockchain technology, is the process of adding transactions to the
large distributed public ledger of existing transactions.Blockchain mining is used to secure and verify
Bitcoin transactions. Mining is the process by which new Bitcoin is added to the money supply.The
process of new coin generation is called mining. Bitcoin mining is the process of creating new Bitcoin by
solving a computational puzzle.Mining is serves to secure the Bitcoin system against transactions or
fraudulent transactions spending the same amount of Bitcoin more than once, known as a double-
spend.

Digital currency Bitcoin -Bitcoin is a digital money which means it does not exist in the physical form
completely or even in digital form. Bitcoin is an open source international currency and also the first
cryptocurrency.Bitcoin is the first P2P cryptocurrency that permits two participants to exchange their
payments without any third-party intervention.Bitcoin () is a decentralized digital currency, without a
central bank or single administrator, that can be sent from user to user on the peer-to-peer Bitcoin
network without the need for intermediaries.

Digital Currency Ethereum- Ethereum was invented in 2013 by programmer Vitalik Buterin. Ethereum is
a decentralized, open-source Blockchain with smart contract functionality.Ethereum, like Bitcoin, is a
public ledger based on Blockchain technology. Ether (ETH) Is the native cryptocurrency of the platform;
among cryptocurrencies, it is second only To Bitcoin in market capitalization. Ethereum is a Blockchain
platform with its own cryptocurrency, called Ether (ETH) or Ethereum, and its own programming
language, known as Solidity.
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 What is blockchain? Explain its importance/need. Also state its Advantages and
Disadvantages. [ 1) Blockchain combines the terms “block” and “chain”. – A block can be
seen as file that contain information about all transactions that have been processed. – A
chain, the blocks are arranged in linear sequence. 2) a) Blockchain Offers New Career
Opportunities : -There are a lot of reasons why blockchain is important. -there aremany
opportunities to develop applications on top of blockchain platforms.
b) Blockchain Democratizes Access to Finance : -There are a lot of reasons why blockchain is
important. -Blockchain is changing the role of financial institutions in the movement of
money. Blockchain Increases Transparency 3)Advantages Of Blockchain : a) -Immutability :
Blockchain supports immutability. b)-Transparency : Blockchain is changing the role of
financial institutions in the movement of money. Blockchain Increases Transparency.
4)Disadvantages Of Blockchain : a) - Speed and performance : Blockchain is considerably
slower than the traditional database. b) -High implementation cost : Blockchain is costlier
compared to a traditional database.]

 Explain Following Blockchain with example. i) Public ii) Private iii) Consortium iv)
Hybrid [ i) Public Blockchain : -Bitcoin is an example of a public blockchain. -The data on
public blockchains can be accessed by everyone. -Examples of public blockchains: Bitcoin,
Ethereum, Bitcoin, Cash, Litecoin, IOTA. ii) Private Blockchain : -Multichain is an example of
a private blockchain. -The most applications a private blockchain is not necessary. -Examples
of a private blockchain : Multichain iii)Consortium Blockchain : -Consortium blockchain also
called federated blockchains. -The transcation speed is LIghter and faster. -Examples of
Consortium Blockchain: Hyperledger. iv) Hybrid blockchain : -Hybrid blockchain is often
referred to as a combination of both public blockchain and private blockchain. -The hybrid
blockchain owned by a private entity cannot modify the transactions. -Examples of Hybrid
Blockchain: IBM hybrid blockchain, IBM Food Trust.

 What is a Block? Explain its structure diagrammatically. [ 1) Blockchain combines the

terms “block” and “chain”. – A block can be seen as file that contain information about all
transactions that have been processed. 2)- Hash: a hash is the result of a hash function. -
Block heighte : The block height of a block is defined as the number of blocks preceding it in
the Blockchain. – Nonce : A nonce is a random number the miners use to solve a
mathematical puzzle in the mining process. Difficulty : Difficulty in a block is a value that
measures the degree of difficulty to find a hash value for a given target, which represents
the difficulty of mining. - Timestamp : A timestamp in a block is a sequence of characters or
encoded information identifying when a certain event occurred, usually giving date and time
of day. -Merkle : The Merkle tree also known as the hash tree.

 What is a Cryptocurrency? List its examples.[ 1)- Cryptocurrency is a digital currency. –

it is a an alternative form of payment created using encryption algorithum. 2)- 1. Bitcoin
(BTC):One of the most commonly known currencies, Bitcoin is considered an original
cryptocurrency. -2. Litecoin (LTC) : Litecoin was launched in 2011 as an alternative to Bitcoin.
-3. Ethereum (ETH) : Created in 2015, Ethereum is a type of cryptocurrency that is an open
source platform based on blockchain technology. - 4. Bitcoin Cash (BCH) : Bitcoin Cash is a
type of digital currency that was created to improve certain features of Bitcoin.
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 Write a Short Note on Evolution of Blockchain.[-The evolution of Blockchain technology

started in 1991. -When research scientists Stuart Haber and W. Scott Stornetta. -Evolution
of blockchain Technology: 1. Bitcoin : -Bitcoin was launched in January 2009. -It is found
by Satoshi Nakamoto. -Bitcoin is a Digital currency for goods or sevices with vendors that
accept bitcoin as payment. - Bitcoin’s market share had declined to 39.6%. 2.Litecoin : -
Litecoin was created in 2011 by Charlie Lee, a former employee of Google. 3.Ethereum:
Ethereum was launched in July 2015 by Vitalik Buterin. . Ethereum is the the second-largest
cryptocurrency after Bitcoin. 4.Ripple: Ripple is a type of cryptocurrency operates on an
open-source. 5.IOTA: Launched in 2016, IOTA stands for Internet of Things (IoT) application
Billions of devices were connected to the Internet by 2020.]

 Write down the type of networks.[ 1) Public Blockchain: Public Blockchain network is
accessible to the public without any limitations of validation and participants.
2) Private Blockchain: It is a restrictive network, only authorised people have access to it.
- some critics believe that a private blockchain is not a blockchain at all.
3)Consortium Blockchain: It is a process where the consensus process is controlled by a pre-
selected set of nodes.a semi- decentralised network where multiple entities operate.
4)Hybrid Blockchain: It is a network that possesses properties of both private and public
blockchain networks.]

 What is a Hash Function ? Explain its purpose and working.[ - A hash function
converts strings of different length into fixed-length strings known as hash values or digests.
- A cryptographic hash function has two main features:
1. Pre-image Resistance: The hash function works in only one direction i.e., we cannot
deduce the input from the output. 2. Collision Resistance: When a hash function produces
the same or identical output for two different inputs, this is called a collision.
-Types of Cryptographic Hash Functions: 1. Secure Hashing Algorithm (SHA-2 and SHA-3).
2. RACE Integrity Primitives Evaluation Message Digest (RIPEMD). 3. Message Digest
Algorithm 5 (MD5). 4. BLAKE2.]

 Explain the Distributed P2P Network. [-P2P network stand for peer to peer network. -
peer to peer Network is a distributed peer to peer Network. – the peer to peer network is a
decentralized all cryptocurrency. – peer to peer network is a decentrialized network
communication.-communication is done without any central administratio or sever.- a peer
to peer network is a decentralized commnication model between two peers also known as
nodes.]

 Describe the defense against attackers.[- Blockchain system is protected with the help
of ledgers and cryptographic keys, attacking and manipulating it becomes extremely
difficult. -Blockchain technology enables decentralization through the participation of
members across a distributed network. - There is no single point of failure and a single user
cannot change the record of transactions. -However, Blockchain technologies differ in some
critical security aspects. -Generally, risk identification, threat prevention, equipment and IT
infrastructure are included in this defense.- Principle of security in blockchain: 1) Penetration
Security 2) Maximum Prerogative 3) Vulnerabilities Detection 4) Patches Control.]
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 Write the note on Cryptographic puzzle. [ - A mathmatical puzzel that miners must
solve on proof of work blockchain in order to add their block to the chain.- To mine Bitcoins
and append transactions to the Blockchain, miners solve a cryptographic puzzle. - The
process of solving the cryptographic puzzle is referred to as Proof-of-Work (POW). - PoW is
necessary in order to build consensus among miners in the Blockchain network. -Pow, the
miner with more computational resources has better chance to append its block to the
Blockchain ledger by being the first to solve the cryptographic puzzle. -The Pow consensus
mechanisms required to compute the puzzle are miners to solve complex cryptographic
puzzles so they can add a block to the Blockchain.]

 What is a Ethereum Network. Explain with diagram. [-Ethereum is the hottest

cryptocurreny in the blockchain at present. – The first cryptocurrency created in 2008 is
know as Bitcoin and ethereum is new cryptocurrency invented in 2013.-It is a blockchain
based open source platfrom. – That give the developers the opportunity to build Dapp and
deploy them. – ETH is a transcations token that faciliates operation on the Ethereum
network. – ETH is a ether.-Ethereum is a digital money.]

 What is a Smart Contract.Describe its Working. [- A smart contract is a self-enforcing

agreement embedded in computer code managed by a blockchain. - Smart contract are a
digital contract. – That stored on a blockchain that are automatacally executed. - Working
of Smart Contract : - Smart contracts work by following simple “if/when…then…”
statements that are written into code on a blockchain. - A user initiates a transaction from
their blockchain wallet. - The transaction arrives at the distributed database, where the
identity is confirmed.]

 What is DAO.Explain in details. [ -The DAO stand for the Decentralized Autonomous
Orgnization. -A DAO is the most complex form a smart contract. – A smart contract is a
computer program that autonomously exits on the internet. -A DAO is an entity with no
cental leadership. – Decentralized Autonomous Orgnization are fully autonomous and
transparent. As they are built on open source blockchain anyone can view their code. -
Example of DAOs: i) A Charity: -The world and group can decide how they to spend
donations. ii) A Freelancer Network: We could create a network of contractors who pool
their fuds for office spaces and software subscriptions. iii) Ventures and Grants: We a create
a venture funds that pools investment capital and vote on ventures to back.]

 What is a gas? Why is important in Ethereum. [-Gas is the name for the execution fee
from sender of transaction need to pay for every operation made on an ethereum
blockchain. -Transaction Fee=Total Gas Used*Gas Price. ii)Gas is very important in a
Ethereum : - The key concept in Ethereum is that of “Gas”. -Ethereum is a decentralized
computing platform that uses ETH also called ether to pay transactions fees or “Gas”. –
“Gas” is the name for the execution fee from sender of transaction need to pay for every
operation made on an ethereum blockchain.]
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 What is a Fork. What are some of the type of forking.Explain with diagram. [ i) -A
fork is a change the digital currency software which create two differtent path of the
blockchain with a shared History. ii)There are two type of fork in blockchain: a) Hard Fork : A
hard fork requires all nodes or users to upgrade to the latest version of the protocol
software. - A hard fork is a non-backward compatible change in the blockchain software that
introduces a new rule to the network b) Soft Fork : - Updates which are backwards
compatible with prior versions of the Blockchain software are known as soft forks. - A soft
fork is a backward-compatible change in the blockchain software where the rules become
stricter, and less is permitted than in the situation before.]

 Describe EVM with the help of diagram. [ -EVM stand for the Ethereum Virtual Machine.
-EVM is apirce of software that Ethereum network after each new block is added to the
chain. – the purpose of EVM is to serve as a runtime environment for smart contract build
on Ethereum. - EVM is the core engine that runs th ethereum Platfrom. – it is the run time
environment that executes all the smart contracts on the Ethreum network. – the global
super computer executes all the smart contract.The functionality of EVM is restricted to
virtual machine. – Ethereum required a programming language for the EVM.

 Why Does it Cost Money to Invoke a Method of a Smart Contract. [ - Some methods,
which do not modify the state of the contract and have no logic other than returning a
value, are free. -Apart from sending ether as a payment, invoking methods that make
change the state cost money also because they require gas for execution. - Since miners
execute contract code on their machines, they must cover their costs from executing the
code requested by a caller.]

 Explain RSA Algorithm. [ RSA algorithm is an asymmetric cryptography algorithm.

Asymmetric actually means that it works on two different keys i.e. Public Key and Private
Key. >> Generating Public Key: -Select two prime no's. Suppose P = 53 and Q = 59. -Now
First part of the Public key : n = P*Q = 3127. -We also need a small exponent say e : -But e
Must be. -An integer. -Not be a factor of n. -1 < e < Φ(n) [Φ(n) is discussed below],
Let us now consider it to be equal to 3. - Our Public Key is made of n and e.
>> Generating Private Key: -We need to calculate Φ(n) : -Such that Φ(n) = (P-1)(Q-1) -
so, Φ(n) = 3016 -Now calculate Private Key, d : -d = (k*Φ(n) + 1) / e for some integer k
-For k = 2, value of d is 2011. -Now we are ready with our – Public Key ( n = 3127 and e = 3)
and Private Key(d = 2011) Now -we will encrypt “HI” : -Convert letters to numbers : H = 8
and I = 9 - Thus Encrypted Data c = 89e mod n. -Thus our Encrypted Data comes out to
be 1394 -Now we will decrypt 1394 : - Decrypted Data = cd mod n. -Thus our Encrypted
Data comes out to be 89 -8 = H and I = 9 i.e. "HI".]

 Describe a Dapp in details. [ - Dapp means Decentralized Application. – Dapp are a digital
application or program that exit and rum on a blockchain or P2P network on a single
computer. -Advantages of Dapp: 1. Zero Downtime. 2.Privacy. 3.Resistance to Censorship.
4.Complate Data Integrity .5.Trustless Computation. - Operations of Dapps: Dapp can be
achived using consensus algorithms such as Proof of Work and Proof of Stake. -Example of
DApp : 1.KYC-Chain -KYC Means Know Your Customer. -It is provide the KYC data in a secure
and convenient way based on smart contract. 2.Open Bazaar: It allow the commercial
 11

activies directly between seller and buyers. 3.Lazooz: This is a decentralized equivalent of
Uber.]

 What is the principle on which Blockchain technology is based on? [1.

1.Decentralization :Blockchain is a P2P network where no single participant(user) controls
the transaction.2. Integrity: The tight integrity is observed in the way every user gets
incentivized for their effort and also in the way this entire P2P network functions.
3. Cryptography :Cryptography is a method of securing data from unauthorized access.
4. Security : Blockchain being a distributed network, there is no one central point of failure
and also no single person can behave recklessly to damage the entire chain of the network.
-Blockchain Technology Use Case: 1.Financial Sector: Financial Sector is a service providers,
and regulators. 2.Non-Financial Sector: Non-Financial Sector is a Healtcare. ]

 Explain Byzantine Fault Tolerance(BFT) in detail. [- Byzantine Fault Tolerance (BFT) is a

consensus approach that resists a system to get into the Byzantine Generals’ problem. -It
also means the system should stay intact even if one of the nodes (or general) fails. -
addition, BFT aims to reduce the effect of malicious byzantine nodes (or general) on the
network. -Barbara Liskov and Miguel Castro introduced a Practical Byzantine Fault Tolerance
(pBFT. -Beyond the blockchain industry, a few use cases of BFT systems include the aviation,
space, and nuclear power industries.]

 Describe Process of SHA-256. [ -SHA-2 (Secure Hash Algorithm 256), of which SHA-256 is
a part, is one of the most popular hash algorithms around. -The NSA, or National Security
Agency, designed and published SHA-256 and the rest of the SHA-2 family of hash functions
in 2001. -SHA-256 generates a 256-bit (32-byte) signature. -Step 1 - Pre-Processing. ... -Step
2 - Initialize Hash Values (h) ... -Step 3 - Initialize Round Constants (k) ... -Step 4 - Chunk Loop.
.. -Step 5 - Create Message Schedule (w) ...-Step 6 - Compression. - Step 7 - Modify Final
Values -Step 8 - Concatenate Final Hash.]

 What is the Nonce. How is Nonce used in Mining. [1. A nonce is a random or
semirandom number that is generated for a spacific use. – It is stand for “Number used
once”,or”number once”. – Nonce is a 32-bit random number which can be used one time. -
The nonce is a bitcoin block is 32-bit field. 2. Miners must guess the valid nonce and add it to
the hash of the existing header, followed by rehashing the value and comparing the value to
the target hash. When the resulting hash value meets the requirements, miners can receive
rewards for the block.]

 Explain the competing chains. [ -Blockchain forks are an important concept in

Blockchain. - A fork refers to competing or coexisting side chains within the same network.
Simply, because of the decentralized structure of the network, the occurrence of forks
seems to be natural. - The reason is that one group of miners will find a next solution first,
even if the computer power within the network is evenly distributed among the several
competing groups. The next solution will be shared among the network nodes, accepted and
spread through the network.]
 12

 Explain the Digital Signature with is working. [ 1.-Digital Signature are a fundamental
building block in blockchain, used mainly to authenicate transcation. -Digital signature is a
digital code. 2. -Working of Digital Signature : A digital signature presenting the
authnticity of digital messages or doucment. – A digital signature is a cryptographic analogue
of a handwritten signature to validate the authenticity integrity and non repudiation of a
message or document transferred over a digital medium. – a digital signature gives a recipiet
reason to believe that the message was created by a known sender.]

 Describe the Consensus mechanisms in details.[- A consensus mechanism is a fault-

tolerant mechanism that is used in computer and blockchain systems. -There are different
kinds of consensus mechanism algorithms, each of which works on different principles. -The
consensus protocols differ with different Blockchain networks.- There are three core
consensus techniques including: 1. Proof of Work (PoW) which is the initial Blockchain
consensus mechanism and was first used by Bitcoin. 2 Proof of Stake (POS) which solves the
lag of computing power in PoW. 3. Byzantine Fault Tolerant (BFT) protocols that instrument
a three-phase commit scheme for Blockchain enlargement.]

 What is a Digital Currency Bitcoin and Ethereum.[- Ether (ETH), the native
cryptocurrency of the Ethereum network, is the second most popular digital token after
bitcoin (BTC). – Bitcoin : -Bitcoin was launched in January 2009. -It is found by Satoshi
Nakamoto. -Bitcoin is a Digital currency for goods or sevices with vendors that accept bitcoin
as payment. - Bitcoin’s market share had declined to 39.6%. Ethereum : - Ethereum
enables building and deploying smart contracts and decentralized applications (dApps). -
Ethereum is a deentralized global software platfrom powerby blockchain techonology. -It is
most commonly knows for its native cryptocurrency,ether(ETH).]
 13
BlockChain_Techology_ch_1 :

- blockchain technology is one of the grestest innovation.

- blockchain based application are fast and can be used in financial service, education system, healthcare, IOT, & may
more.
- Blockchai is a pear-topear distributed ledger that permanently record transcation .
Block : a block ca be a file that contain all information about transaction.
Chain : a chain arrage the block in liner sequence.

Clint Server System :

- clint server system is architecture of distributed application in
which most of the resources and service consumed by user
- the server is responsible for offering service to the clint.
- the server provide services like, storage , data processing.
- clint are indvisual entites which are connected in a etwork.
- clint sent a reqwest to the server and server respond
accordingly.
- the server is most powerfull then clint.
- now a days most of websites use clint server architecture.

Peer-to-Peer (P2P) Systems :

- Peer-to-Peer (P2P) Systems system is an architecture that work equally to all the system or nodes.
- pear-to-pear system I sinter-connected system I which they are capable of shearing resources and
information.
- P2P system ca be used in Blockchain Technology, transportion service, education e-commers, baking &
finance.
- P2P system can refers to the decentralized architecture.
- in P2P system there is no central control to serve the requwest.
- in The peer-to-peer architecture of Blockchain allows all crnto-currencies to be trasfered all over word.
Advantages- P2P system can be easily install.
- it cost is less.

BLOCKCHAIN vs DATABASE :

BlockChain : DataBase :

- a blockchain is chain of block which contain iformation. - a database is collection of related data.
- a blockchain store information I block data structure. - its store data in form of table (row,column).
- a blockchain is a P2P decentralized layer. - database is cetrlized layer.
- blockchain use P2P distributed system. - database use clint-server system.
- blockchain use reed and write operation. - it support create, reed, delete, update operation.
- blockchain are hard to implement. - database is easy to implement.
- blockchain is slower. - database is extremely faster.
- blockchain is decentralized in nature - database is centralized I nature.
- every blockchain may be consider database. - every databse can not considred as blockchain

Why We Need Blockchain :

- automated operation , open source technology, secure, distributed architecture , flexible.
 14
Structure Of Blockchain technology.
- a blockchain is a comprised chain of block.
- blocks are the basic unit of blocks.
- a block is a basic data structure in a blockchain for transaction control.
- in the blockchain there contain a block header which verifies the validy of block.
And metadata which describe the block.
- A None is a radom number use to solve mathmaticle puzzle.
- Dificulty in a block that messure degree of deficulty to find a hash value for given
value.
- A Timestamp in a block is a sequence of character identifie when a certain event
occur
- A hash or hash value is the result of the hash funciton , A hash function take input
of any length
- A markle tree is also known as the hash tree. It encode the blockchain data in an
secure manner.

Blockchain Generation :
First Generation of blockchain : Bitcoin
- in first geeration of blockchain bitcoin was created which are digital currecy.
- bitcoin is first real use of blockchain technology and it main purpose if fiantial application.
- any user can send bill , digital money with hight security of transaction.
- bitcoin and blockchain both have stron g privacy.
Second Generation Of Blockchain : Ethereum
- In first generation of blockchain allow send, recive and trade the transaction
- Ethereum can conduct two things ie.inovation of smart contras .
- A smart contras offers the faster , more secure way of executing arguments .
Ethereum is actually behave less like a cryptocurecy .
Types of Blockchain :
1 Public Blockchain :
- A public Blockchain is a permissionless ledger technology where any one can join and do their transaction.
- every one can access the public blockchain,
- in public blockchain the verification of transaction is done by arrengment method ie. Proof-of-work (Pow),
Proof-of-stake (Pos).
- public blockchain are basically used for mining and exchanging cryptocurrency.
- public blockchain are more secure.
- Example : Bitcoin, Ethereum, Litecoin.
- Advantage : anyone can join public blockchain, it bring trust, not requires intermediaries to work,
- Disadvantages : less scalability.
2 . Private Blockchain :
- private blockchain is limiting permission blockchain.
- private blockchain are generally use within a compaies and enterprises.
- private blockchain are similar in use as a public blockchain, but private blockchain has a smoll network because private
blockchain have authorizations.
- private blockchain are developed for votig, supply management, digital identity.
- Advantages : private blockchain is fast, more scable.
- Disadvatages : private blockchain are not truly decentralized.
3. COsortium blockchain :
4 . Hybride Blockchain :
- hybride blockchain is a combination of the private blockchain and public blockchain.
- hybride blockchain use features of both blockchains.
- hybride blockchain system is flexible.
- Example : Dragonchain, Xin Fin’s Hybride Blockchain.
 15
**Challenges Of Blockchain :
Scalability :
- blockchain have large number of user on the etwork.there is
need of icrease capacity of the blockchain.
Public preceptio :
- preciption,blockchain holds in the eyes of people .
Security :
- the blockchain maintain confidatly to protect user from hackers .it provide privacy.
Cost :
- the blockchain technology does not come free.
- to Valid Transaction bitcoin uses the Proof-Of-Work (Pow) system.
Privacy :
- the bitcoin blockchain is designed to be publicaly visible.

Application of blockchain :
Banking, cloud storage, votig, supply chain management, cryptocurrency, healthcare, smart cotracts, Iot, digital identity
maagment.

Layerd architecture of blockchain :

Application and presentation layer, Consessun layer, Network layer, Data layer, Hardware/infrastructure layer

Components of blockchain :
1 . node application :
- a ode application specify that every computer coected to the internate.
- example of node application is bitcoin wallet application and bakchain application.
- node application not free from any restriction.
2 . distributed ledger. :
- the distributed ledger means the shared database.
- the shared ledger list the guidelines that need to be followed.
3 . Cosensus Algorithm .
- consensus algorithm is one of the major componend of blockchain system.
- the consensus algorithm provide stability and security to the data in the blockchain.
- it represent the status of the network.
- Core Component of blockchain :
- transaction, block, chain, node, consensus , miners.

* Symmetric key cryptography :

- symmetric key cryptography is a simple from of cryptography which use sigle key to icrept ad decrept the data.
- this key can incrept the data which can safely sent the network.
- to decrypt the data the reciver needs the key
* Asymmetric key Gryptography :
- asymmetric cryptography also known as public-key cryptography.
- public cryptography use the key in pair, public, and private key.
*Digital signature :
- digital signature is an initial generated block in blockchain.
- digital signature encrypt the signed doucuments.
- digital signature is geerated using symmetric cryptography.
*Smart Contras :
- smart contras use to exchange cash, property , shares,
- smart contras is a translation of arrengment .
- smart cotras are self executiong contras containing terms and coditions of an aggrement
- smart cotras executes o etheruem blockchain decentralization.
Advantages : it is fast, low cost, high security.
Application : insurance , copy righted content, trasportions, employmet contracts .
 BLOCK_CHAIN_CH_2 : HOW17
BLOCKCHAIN’S WORKS
-block-chain is the backbone technology of digital cryptocurrency bitcoin.
- we can store a bitcoin in digital wallet (or ewallet).
- a block-chain is a distributed database of records of all digital event.
HASHING :
- hashing is essential to block-chain in cryptocurrency.
- a hash is a athmatical function that converts an input of arbitrary length into an encrypted output.
- hashing in blockchain ensure that all blocks are well formed.
- the collision free, easy-to-generate, commitment function make blockchain data structure functilnality powerfull.
- a hash function is a function that takes one pice of information of any size and maps it to aother piece of data of
fixed size.
Hash function :
- a hash function takes any input like numbers, words, etc.. and through the use of an algorithm produces an
output of a specific length.
- a hash function maps the data of any arbitrary size to data of fixed size.
M
**SHA 256 HASH algorithm :
- the secure hash function (SHA) is a family of cryptographic hash functions.
- cryptographic hash function SHA-256 takes input of any size and the output is always a fixed size 256 bits.
- the SHA-0 is the first version of SHA algorithm.
- SHA-256 hash function commonly used in blockchain technology.
r.
- SHA-256 is also colled a secure hash algorithm 256.
- SHA-256 is a hashing algorithm used to convert text of any length into a fixed size string of 256 bits or 32
bytes.
- the top three SHA-256 blockchain projects by market capitalization are bitcoin(BTC), Bitcoin cash (BCH),
Bitcoin Satoshi’s vision(BSV).
R
*IMMUTABLE LEDGER :
- blockChain is a decentralized , distributed and immutable ledger technology that operates over a peer-to-
peer network.
- blockchain is a iutable ledger implemented in a distributed fasion without a central authority.
oh
- the imutability property of a blockchain means that the data which has been written once on the
blockchain connot be changed.
- immutable means cannot be changed and ledger is fancy term for record.
- imutable ledger resides in the concept of the hash.
*EXPLANE WORKING OF MINING :
- blockchain mining is a process to validate every step in the transactions while operating bitcoins.
it
- the people involved here are known as blockchain miner.
- the main objective of mining is to ensure the perpetuity and security of the decentralized network.
- blockchain mining is used to secure and verify bitcoin transactions.
- the process of new coin generation is colled mining.
- miners recive two types of rewards for mining that is new coins and transaction fees.
- to earn this reward the iners compete to solve a difficult mathematical problem based on a cryptographic
hash algorithm.
- the mining process starts when miners are trying to validate new transactions.
- miners recive rewards when they solve the complex mathmaticle problem.
*NONCE :
- nonce stand for number used only once.
- nonce is a 32 bit random number which can be used one time.
- the “nonce” in a bitcoin block is a 32-bit field whose value is adjusted by miners.
**BYZANTINE FAULT TOLERANCE : 18
- FAULT TOLERANCE REFERS TO THE ABILITY OF A SYSTEM TO CONTINUE OPERATING WITHOUT
INTERRUPTION.
- Byzantine fault tolerance facilities the distributed coputer network to achieve a incorrect information.
- Byzantine Fault Tolerance (BFT) is the ability of a distributed computer network .
- BFT is one of the features of a distributed network.
Proof-Of-Work (PoW) :
- The PoW is a common algorithm used by the ost popular cryptocurrency networks like bitcoin and
litecoin.
- The Pow system blockchain validators take data from a block header as an input, and continuously run it
through a cryptographic hash function.
- Pow need high level of electricity .
- It requires a participant node to prove that the work done and submitted by them.
- Specialized computers called ASIC’s are require to compute complex mathmaticle problems needed for
thr Pow System.
M
- The puzzle solver will create a hash value of the header, using the SHA 256 function.

Proof of Stake (PoS) :

- poS protocol is the machanisum for blockchain that work by selecting validators.
- PoS are Proof of Stake algorithm used by cryptocurrencies to validate blocks.
- the PoS is another common algorithm that envolved as a low-cost, low-energy consuming algorithm.
r.
- PoS and PoW has similar objectives, they have some fandamental difference and features.
- the PoS may execute the algorithm in different ways.
-
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