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Blockchain

The document discusses blockchain technology, including: 1) What blockchain is and how it uses a decentralized digital ledger to record transactions across computers. 2) The differences between proof-of-work (PoW) and proof-of-stake (PoS) consensus mechanisms, with PoW used by Bitcoin and PoS used by some alternative cryptocurrencies. 3) The three main types of blockchains: public blockchains that anyone can access, private/permissioned blockchains that organizations control access to, and federated/consortium blockchains where a select group controls the consensus process. 4) That blockchains can be hacked due to errors, insufficient security of exchanges where cryptocurrency

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Seun Ogunla
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46 views

Blockchain

The document discusses blockchain technology, including: 1) What blockchain is and how it uses a decentralized digital ledger to record transactions across computers. 2) The differences between proof-of-work (PoW) and proof-of-stake (PoS) consensus mechanisms, with PoW used by Bitcoin and PoS used by some alternative cryptocurrencies. 3) The three main types of blockchains: public blockchains that anyone can access, private/permissioned blockchains that organizations control access to, and federated/consortium blockchains where a select group controls the consensus process. 4) That blockchains can be hacked due to errors, insufficient security of exchanges where cryptocurrency

Uploaded by

Seun Ogunla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1) What is blockchain: blockchain is a decentralized, distributed and public digital ledger that is used to

record transactions across many computers so that the record cannot be altered retroactively without
the alteration of all subsequent blocks and the consensus of the network.

2) Discuss PoS and PoW:

PoW: Proof-of-Work (PoW) is a mechanism Bitcoin uses to regulate the creation of blocks and the state
of the blockchain. Proof-of-Work provides an objective way for all members of the Bitcoin network to
agree on the state of the blockchain and all Bitcoin transactions.

PoS:Proof-of-Stake (PoS) is an alternative consensus mechanism to Proof-of-Work, developed and used


by a few alternative cryptocurrencies. In the Proof-of-Stake model, stakers—the PoS equivalent of
miners—lock up funds in a special smart contract. Every time a new block is needed by the network, an
algorithm grants a specific staker the opportunity to publish the next block. The algorithm selects the
staker via lottery, depending on each staker’s percentage of total staked funds. For example, if a single
staker controls 30% of all funds staked on a given network, they have a 30% chance of mining the next
block.

3) List the types of Blockchain we have and write a short note on each

• Public blockchain:

A public, or permission-less, blockchain network is one where anyone can participate without
restrictions. Most types of cryptocurrencies run on a public blockchain that is governed by rules or
consensus algorithms.

• Permissioned or private blockchain:

A private, or permissioned, blockchain allows organizations to set controls on who can access blockchain
data. Only users who are granted permissions can access specific sets of data. Oracle Blockchain
Platform is a permissioned blockchain.

• Federated or consortium blockchain:

A blockchain network where the consensus process (mining process) is closely controlled by a
preselected set of nodes or by a preselected number of stakeholders.

4) Can Blockchain be hacked? if YES state reason, if NO state reason

Yes, Blockchain can be hacked.

• Creation errors: Sometimes, there may be security glitches or errors during creation of blockchain. This
may be more common with larger, more intricate blockchains.

• Insufficient security: Many blockchain hacks have happened on exchanges, which is where users can
trade cryptocurrency. If the security practices surrounding the exchanges are weak, hackers will have
easier access to data.
• During the verification process, individuals referred to as “miners” will review the transactions to
ensure they are genuine. When one or more hackers gain control over half of the mining process, there
can be extremely negative consequences.

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