In what order are the blocks linked in the blockchain?
Blockchain always links each block in backward order. In other words, blockchain links each block with its previous block.
What are the types of consensus algorithms?
There are many types of consensus algorithms or techniques available. The most popular consensus algorithm is:
- Proof-of-Work(PoW)
- Proof-of-Stake(PoS)
- Delegated Proof-of-Stake(DPoS)
- Proof-of-Authority(PoA)
- Proof-of-Elapsed Time(PoET)
- Byzantine Fault Tolerance
What are the types of records that are present in the blockchain database?
There are two types of records in a blockchain database.
- Transactional Records
- Block Records
Both the records can easily be accessed and can integrate with each other without following any complex algorithm.
What do you mean by Coinbase transaction?
A Coinbase transaction is the first transaction in a block. It is a unique type of bitcoin transaction that can be created by a miner. The miners use it to collect the block reward for their work and any other transaction fees collected by the miner are also sent in this transaction.
How can blocks be identified?
Blocks can be identified by their block height and block header hash.
How does the security of a block works?
A blockchain is a chain of blocks that contain records of transactions. Block is the most secure part of a blockchain. The record of a blockchain is protected through a cryptographic hash algorithm. Each block is connected with all other blocks before and after it through a distinctive hash pointer which adds more security to the block. If the value within a block is modified, the hash value will also change. This hash is a security identifier which provides a reasonable level of security to the whole blockchain.
Ambitious hackers also need to know the hash key of the previous block to make changes to the block information. For those ambitious hackers, blockchains are decentralized and distributed across peer-to-peer networks that are continuously updated and keep syncing. Since these records are not contained in a central location, so blockchains don’t have a single point of failure and cannot be changed from a single computer.
What are the benefits of blockchain?
Settlement in real-time: In the financial industry, blockchain can allowing the quicker settlement of trades. It does not take a lengthy process for verification, settlement, and clearance because a single version of agreed-upon data is available between all stack holders.
Cost-saving: Blockchain allows peer-to-peer transactions to be completed without the need for a third party such as a bank which reduced overhead costs for exchanging assets.
Security and Resilience: Blockchain uses very advanced cryptography to make sure that the information which is going to lock inside the blockchain is secure against hacking attacks and fraud. It uses Distributed Ledger Technology where each party holds a copy of the original chain, so the system remains operative, even the large number of other nodes fall.
Immutability: A blockchain register transactions in chronological order, which mean every transaction happens after the previous one. The chronological order certifies the unalterability of all operations in the blockchain. It means when a new block is added to the chain of ledgers, it cannot be removed or modified.
User Pseudonymity: It is a state where the user has a consistent identifier which is not the real name of the user. The real identities are only available to administrators. It allows users to communicate with others in a generally anonymous way. It helps to maintain user privacy and enables free transactions without any security worries. In the blockchain, your pseudonym is the address to which you receive Bitcoin. Every transaction which involves that address is stored permanently in the blockchain. If your address is linked to your identity, every transaction will be linked to you. It is always good to every time use a new address for each transaction to avoid the transactions being linked to a common owner.
List the key features of blockchain?
The essential properties of a blockchain are:
- Decentralized Systems
- Distributed ledger
- Safer & Secure Ecosystem
- Fast
- Low Transaction Fees
- Fault-Tolerant
- Minting
What is Cryptocurrency?
Cryptocurrency is a digital asset(currencies) which can be used to exchange value between parties. It uses strong cryptography to secure and verify the financial transactions as well as control the creation of new units of that currency. As we know, it is a digital currency, so it doesn’t exist physically. Some popular cryptocurrencies are Bitcoin, Litecoin, Z-Cash, Monero, Dash, etc.
We know that the government prints the government currencies like fiat currency such as Dollar, Rupees, Yen or Yuan itself. It means there is a centralized institution exists which can create thousands or millions or billions more of that currency. Unlike government currencies like bitcoin, these type of currencies is created by the same mathematical formulas that make the cryptocurrency work. Thus, cryptocurrencies use decentralized control, which works through distributed ledger technology that serves as a public financial transaction database.
Can you modify the data in a block?
No, it’s not possible to modify the data in a block. In case any modification is required, you would have to erase the information from all other associated blocks too.