Intro to Blockchains

What problem is blockchain designed to solve?

The problem of centralisation and the need for a decentralised trust less system.

What is a blockchain?

A digital, distributed ledger allowing simultaneous access, validation and record updating across a network of computers.

What type of ledger is a blockchain compared to?

It is the decentralised evolution of digital ledgers.

What is a bit and what is a byte?

A bit is 0 or 1; 8 bits = 1 byte.

Why do blockchains use hexadecimal?

Hex is easier to read and 4x shorter than binary

What is the purpose of a cryptographic hash function?

To compress data into a fixed-length output that cannot be reversed.

Which hash function does Bitcoin use?

SHA-256

List the four properties of good cryptographic hash functions?

Deterministic, collision-resistant, pre-image resistant, avalanche effect

What is the avalanche effect?

A tiny change in input creates a completely different hash output.

What is a Merkle root?

The final hash representing all transactions in the block.

What is the purpose of a Merkle tree?

To hash transactions together efficiently and produce a single Merkle root for the block.

What is a public blockchain?

A blockchain open to anyone via nodes; transactions are visible to everyone.

What is a private (permissioned) blockchain?

A blockchain controlled by a central entity or consortium; requires KQC; fast and private

What is a hybrid/consortium blockchain?

A system combining public + private blockchain features, typically governed by multiple organisations.

What is Layer 1 in blockchain architecture?

The base blockchain itself

What is Layer 2?

Scalability solutions built on top of Layer 1, such as Lightning Network or rollups.

What is Layer 3?

The application layer hosting dApps (Uniswap, Lido)

What is Layer 0?

Interoperability infrastructure connecting different blockchains (eg Polkadot, Wormhole)

What is a light node?

A node that stores only block headers and uses Merkle proofs to verify transactions.

what is a full node?

A node storing full blockchain history; can be pruned or archival

What are block producer nodes?

Nodes that produce blocks

What is a masternode?

A node that helps govern and validate the network, requiring a large token stake.

What is a hard fork?

A non-backward-compatible protocol update causing a chain split if not all nodes upgrade.

What is a soft fork?

A backward-compatible upgrade requiring only majority to update; no chain split occurs.

What is the purpose of consensus mechanisms?

To agree on the next block in a decentralised network

Proof-of-Work: advantages + disadvantages?

Advantage: secure and reliable.

Disadvantages: high electricity use, slow, not scalable.

Proof-of-Stake: advantages + disadvantages?

Advantage: energy efficient, fairly fast.

Disadvantage: less decentralised, scalability issues.

Delegated Proof-of-Stake (DPoS): key idea?

Witnesses are elected via voting to validate blocks; very fast but more centralised.