What is the difference between public and private key?
The private key is used to encrypt or lock a message or transaction which is sent on the blockchain network. The sender can send a message using the public key of the receiver. On the other hand, the receiver can decrypt the message or the transaction using his private key. By using the private and public key, the communication or transaction is kept safe and tamper-proof.
What are the Merkle trees? What is its importance in blockchain?
Merkle tree is a fundamental part of blockchain technology. It is a mathematical data structure composed of hashes of different blocks of data, and which serves as a summary of all the transactions in a block. It also allows for efficient and secure verification of content in a large body of data. It also helps to verify the consistency and content of the data. Both Bitcoin and Ethereum use Merkle Trees structure. Merkle Tree is also known as Hash Tree.
The Merkle tree plays a vital role in blockchain technology. If someone needs to verify the existence of a specific transaction in a block, then there is no need to download the entire block to verify the transaction in a block. He can only download the chain of block headers. It allows downloading a collection of a branch of the tree which contains this transaction is enough. We check the hashes which are relevant to your transactions. If these hashes check out is correct, then we know that this particular transaction exists in this block.
What is Double Spending? Is it possible to double spend in a Blockchain system?
Double spending means spending the same money multiple times. In a physical currency, the double-spending problem can never arise. But in digital cash-like bitcoin, the double-spending problem can arise. Hence, in Bitcoin transactions, there is a possibility of being copied and rebroadcasted. It makes it possible that the same bitcoin could be spent twice by its owner. One of the primary aims of Blockchain technology is to eliminate this approach up to the possible extent.
Blockchain prevents the double-spending problem by implementing a confirmation mechanism from multiple parties before the actual transaction added to the ledger.
Name some popular platforms for developing blockchain applications.
Some of the popular platforms for developing blockchain are:
- Ethereum
- Hyperledger Sawtooth
- Quorum
- Ripple
- R3 Corda
- Qtum
- IOTA
- EOS
What are the limitations of blockchain?
The major limitations of blockchain are:
Lack of Technical Talent
Today, there are a lot of developers available who can do a lot of different things in every field. But in the blockchain technology, there are not so many developers available who have specialized expertise in blockchain technology. Hence, the lack of developers is a hindrance to developing anything on the blockchain.
Network Size
Blockchains require a vast network of users. Therefore it is not much resistant to the wrong action as well as it responds to attacks and grows stronger. The blockchain is a robust network with a widely distributed grid of nodes, which makes it more difficult to reap the full benefit.
Security Flaw
Bitcoin and other blockchains are associated with one considerable security flaw known as a “51% attack.” This security flaw refers to a situation when a group of “miners” takes control of more than half of the blockchain network’s computing power. If the miners somehow acquire sufficient computational power, then there is no centralized authority to prevent them from influencing the entire Bitcoin network. It means the attacker can block new transactions from taking place or being confirmed. They are also able to reverse the transactions that have already validated during that same period. Due to this, they could spend coins twice.
For this reason, Bitcoin mining pools are closely monitored by the community who ensure that no one gains such network influence.
Speed and cost of transactions
The first few years of the existence of blockchain, transactions cost are “nearly free.” But as the network grows, it will NOT be the most cost-effective option of transferring money due to rising transaction costs in the network. From the end of 2016, it processes only seven transactions per second, and each transaction costs around 0.20$.
Consensus Mechanism
In the blockchain, we know that a block can be created in every 10 minutes. It is because every transaction made must ensure that every block in the blockchain network must reach a common consensus. Depending on the network size and the number of blocks or nodes involved in a blockchain, the back-and-forth communications involved to attain a consensus can consume a considerable amount of time and resources.
Can you remove a complete block from a network?
Yes, it is possible to remove a complete block from a network. There are times when only a specific portion of this online ledger is to be considered. There are default options and filters that can help us do this without making a lot of efforts.
Name the platforms that are actively developing Blockchain applications?
Blockchain technology was first used for financial transactions. But nowadays, its scope is increasing and applies in a variety of industries like e-commerce, data management, energy, gaming, e-governance, and many more. There are several commercial and open-source platforms available to provide the framework for creating applications that support a blockchain. Hyperledger and Ethereum are actively improving the blockchain ecosystem by creating advanced cross-industry blockchain technologies.
Hyperledger is an open-source collaboration that provides tools and techniques for developing an enterprise-grade blockchain solution. While Ethereum is an open-source and leading platform designed for developers, organizations, and business to build and deploy blockchain applications.
What is a ledger? Name the common type of ledgers that can be considered by users in Blockchain?
A ledger is a file that is constantly growing. It keeps a permanent record of all the transactions that have taken place between two parties on the blockchain network.
There are three common types of a ledger that can be considered by users in the blockchain:
- Centralized Network
- Decentralized Network
- Distributed Network
What do you mean by blocks in the blockchain technology?
A Blockchain consists of a list of records(some or all of the recent transaction). Such records are stored in blocks. Each time a block gets completed, a new block is generated. The block linked with other blocks constitutes a chain of blocks called Blockchain. Each block, after added into the blockchain, will be stored as a permanent database. We cannot delete or reverse any block from the blockchain.
What is a 51% attack?
The 51% attack on a blockchain network refers to a miner or a group of miners who are trying to control more than 50% of a network’s mining power, computing power or hash rate. In this attack, the attacker can block new transactions from taking place or being confirmed. They are also able to reverse transactions that have already confirmed while they were in control of the network, leading to a double-spending problem.