Question 1

What is blockchain technology?

Accepted Answer

Blockchain is a type of distributed ledger that records transactions across a network of computers. Transactions are grouped into blocks, secured with cryptography, and linked together so that the record is transparent, verifiable, and difficult to alter.

Question 2

How does a blockchain work?

Accepted Answer

A blockchain works by broadcasting transactions to network participants for validation. Once approved through a consensus mechanism, transactions are added to a block and connected to previous blocks using cryptographic hashes, creating a shared and tamper-resistant ledger.

Question 3

What is the difference between public and private blockchains?

Accepted Answer

A public blockchain is generally open for anyone to view, use, or help validate, while a private blockchain restricts participation to approved users. Consortium blockchains are governed by multiple organizations and are often used when businesses need shared control, privacy, and efficiency.

Question 4

Why is cryptography important in blockchain?

Accepted Answer

Cryptography protects blockchain data and user assets. Hash functions help secure the connection between blocks, while public and private keys and digital signatures verify ownership and authorize transactions without exposing sensitive private information.

Question 5

Which consensus mechanism is best?

Accepted Answer

There is no single best consensus mechanism for every blockchain. Proof of Work emphasizes strong security and open participation, while Proof of Stake can offer greater energy efficiency and scalability. The ideal choice depends on the network’s goals, governance model, security requirements, and performance needs.

Fundamentals of Blockchain