UNIT 3 Q1] Explain in detail the following blockchain platforms. 9] IOTA: 1.

9] IOTA: 1.Definition: IOTA is a cryptocurrency and a decentralized platform designed for the Internet of
1] Public Blockchain:1.Definition: A public blockchain is a decentralized and open network where anyone can Things (IoT). It aims to facilitate microtransactions between devices. 2.Tangle Technology: Unlike traditional
participate as a user or miner. 2.Transparency: All transactions are visible to all participants, promoting blockchain, IOTA uses a structure called Tangle a directed acyclic graph (DAG) where transactions are verified
transparency. 3.Security: Public blockchains rely on consensus mechanisms like proof-of-work to ensure by two previous transactions, improving scalability. 3.No Transaction Fees:IOTA eliminates transaction fees,
security. 4.Examples: Bitcoin and Ethereum are popular examples of public blockchains. 5.Use Case: Public making it ideal for microtransactions in IoT networks, where small payments are frequently needed.
blockchains are used in cryptocurrency, decentralized applications (dApps), and decentralized finance (DeFi). 4.Scalability: Since IOTA doesn’t rely on miners, the network can scale efficiently as more devices join,
2] Private Blockchain: 1.Definition: A private blockchain is a permissioned network controlled by a single improving transaction speed and reducing congestion. 5.Use Cases: IOTA is mainly used in IoT applications,
organization or entity. 2.Access Control: Only authorized participants can join, ensuring better control over such as smart cities, supply chain management, and machine-to-machine payments. 6.Security:The Tangle
data. 3.Efficiency: Private blockchains are more efficient than public blockchains due to fewer participants structure makes IOTA more resistant to attacks and ensures that data integrity is maintained even
and quicker consensus. 4.Security: While secure, private blockchains have a higher risk of centralization and U3 Q2] List different consensus algorithms used in Blockchain Technology.
less transparency. 5.Use Case: Used by enterprises for internal record-keeping and supply chain management. 1.Proof of Work (PoW):PoW is the algorithm used by Bitcoin and many other cryptocurrencies. It requires
3] Consortium Blockchain: 1.Definition: A consortium blockchain is a hybrid network where multiple miners to solve complex mathematical puzzles to validate transactions and add blocks to the blockchain.
organizations control the blockchain. 2.Access Control: Only a set of pre-approved participants can access the 2.Proof of Stake (PoS):PoS requires participants to "stake" their cryptocurrency as collateral to validate
network. 3.Collaboration: It allows multiple organizations to collaborate on common goals, such as shared transactions. The probability of validating a block is based on the amount of cryptocurrency a participant
data or transactions. 4.Efficiency: With multiple participants, it offers faster consensus and better scalability holds and is willing to lock up. 3.Delegated Proof of Stake (DPoS): In DPoS, stakeholders vote for a small
compared to public blockchains. 5.Use Case: Ideal for industries like banking, where multiple entities need group of delegates who are responsible for validating transactions. This system aims to improve scalability
secure and transparent collaboration.| and efficiency compared to traditional PoS. 4.Proof of Authority (PoA): PoA relies on trusted validators who
4] Ethereum: 1.Definition:Ethereum is a public, decentralized blockchain platform for building and running are authorized to create new blocks. These validators are typically pre-selected and must maintain their
smart contracts and dApps. 2.Smart Contracts:It enables developers to create decentralized applications reputation for continued participation. 5.Practical Byzantine Fault Tolerance (PBFT): PBFT is designed to work
using its built-in programming language, Solidity. 3.Ethereum Virtual Machine (EVM):Ethereum uses EVM to in systems where participants may act maliciously. It ensures consensus by having nodes work together to
execute smart contracts and run applications. 4.Decentralization: Ethereum is decentralized, making it reach an agreement on transaction validity, even with faulty or malicious nodes. 6.Proof of Space/Proof of
resistant to censorship and control by any single authority. 5.Use Case:Ethereum powers decentralized Capacity (PoSpace/PoC): PoSpace uses unused disk space to prove that a participant has space allocated for
finance (DeFi), NFTs, and other blockchain-based applications. the blockchain, making it more energy-efficient compared to PoW. 7.Proof of Elapsed Time (PoET): PoET is
5]Hyperledger: 1.Define: Hyperledger is an open source blockchain framework designed for business used in permissioned blockchains like Hyperledger Sawtooth. It randomly selects leaders by waiting for a
applications. 2.Permissioned Network: It supports permissioned networks, allowing only authorized specified "elapsed time," reducing energy consumption. 8.Hybrid Consensus: Some blockchains use a
participants to join.3.Modular Architecture: Hyperledger offers various modules for different use cases like combination of multiple consensus algorithms. For example, Proof of Work and Proof of Stake can be
Hyperledger Fabric, Sawtooth, and Indy. 4.Privacy:It focuses on providing privacy and confidentiality for combined to enhance both security and scalability.
enterprise applications.5.Use Case:Primarily used in supply chain, finance, and healthcare solutions. Q3] Explain consensus in blockchain in detail
6] Corda: 1.Definition:Corda is an open-source blockchain platform designed for financial institutions and i)Proof of Work (PoW): 1.Process:Miners solve complex cryptographic puzzles to validate transactions and
regulated environments. 2.Privacy Focused:Corda ensures privacy by allowing transactions to be visible only create new blocks. 2.Security: PoW ensures high security by making it computationally expensive to alter the
to relevant parties. 3.Not a Traditional Blockchain: It is not based on a traditional blockchain but instead uses blockchain. 3.Energy Consumption: PoW requires significant energy consumption due to the high
a unique data model that doesn’t require blocks or mining. 4.Interoperability: Corda is built for computational power needed for mining. 4.Example:Bitcoin and Ethereum (before Ethereum’s switch to PoS)
interoperability with other networks and systems, including existing financial infrastructures. 5.Use Case: use PoW. 5.Advantages (Pros): 1.Highly secure and decentralized. 2.Ensures transparency and immutability of
Corda is mainly used in financial services for secure and efficient transactions. the blockchain. 6.Disadvantages (Cons):1.High energy consumption. 2.Scalability issues due to slower
7] R3: 1.Definition: R3 is a blockchain platform for enterprises, best known for its Corda blockchain. transaction processing times.
2.Consortium Collaboration: R3 works with a consortium of financial institutions to create blockchain-based 2] Proof of Activity (PoA): 1.Process: PoA is a hybrid system where miners first solve a PoW puzzle, and then
solutions. 3.Permissioned Network:It is a permissioned platform, allowing control over who can access the validators are chosen through PoS to verify blocks.2.Security: The combination of PoW and PoS increases
network and participate in transactions. 4.Enterprise Focused:R3 provides tools and solutions to help security by making it harder for attackers to manipulate the system.3.Efficiency: The PoS component reduces
businesses adopt blockchain technology. 5.Use Case:R3's Corda is used mainly in finance, supply chain, and energy usage compared to traditional PoW-based systems. 4.Example:Dash and Decred use variations of
trade finance. PoA.5.Advantages (Pros):1.Balances security (PoW) with efficiency (PoS).2.More energy-efficient than PoW
8] Bitcoin: 1.Definition: Bitcoin is a decentralized digital currency, created in 2009 by an unknown person or while maintaining decentralization. 6.Disadvantages (Cons): 1.More complex and harder to implement. 2.
group under the pseudonym Satoshi Nakamoto. 2.Blockchain Technology: Bitcoin operates on a blockchain, a Still susceptible to centralization due to the reliance on validators for PoS.
public ledger that records all transactions made using Bitcoin. 3.Decentralization: It is not controlled by any 3] Proof of Burn (PoB): 1.Process:Participants "burn" a certain amount of cryptocurrency to prove their
central authority like a bank or government, making it resistant to manipulation or interference. 4.Mining: commitment to the network, allowing them to validate blocks. 2.Token Allocation:The number of tokens
Bitcoin transactions are verified by miners through a process called proof-of-work, where they solve complex burned determines the participant’s chances of validating a new block. 3.Security:Burning tokens makes an
cryptographic puzzles to validate transactions. 5.Limited Supply: The total supply of Bitcoin is capped at 21 attack financially unfeasible as it reduces the circulating supply, potentially increasing the value of remaining
million coins, making it a deflationary asset. 6. Use Cases:Bitcoin is used for peer-to-peer transactions, as a tokens. 4.Example:Slimcoin and Counterparty use PoB. 5.Advantages (Pros): 1.Energy-efficient compared to
store of value, and in some cases as a hedge against inflation. PoW.2.Reduces circulating supply, which may help increase the token's value. 6.Disadvantages (Cons):
1.Participants lose their tokens permanently, which could discourage participation. 2.May lead to U3 Q7] Explain types of Blockchain in detail. : Types of Blockchain: Blockchain technology can be categorized
centralization if only wealthy participants can afford to burn tokens. based on the level of access and the way data is stored and processed. There are three primary types of
4] Proof of Stake (PoS): 1.Process: Participants lock up a certain amount of cryptocurrency as collateral blockchain: Public, Private, and Consortium. Each type serves different use cases and offers various levels of
(stake). Validators are selected based on the size of their stake to create new blocks. 2.Energy Efficiency: PoS transparency, security, and control.
is much more energy-efficient than PoW because it doesn’t require intensive computational work. 3.Security: 1.Public Blockchain: Definition: A public blockchain is a decentralized and open network where anyone can
Validators are incentivized to act honestly, as they risk losing their staked tokens if they behave maliciously. participate in the validation process and view the transaction history. Access:It is fully accessible to anyone,
4.Example: 1. Ethereum transitioned to PoS with its Ethereum 2.0 upgrade. 5.Advantages (Pros):1. Energy- allowing anyone to join the network, validate transactions, and contribute to the blockchain.
efficient and scalable. 2.Faster transaction processing times compared to PoW.6.Disadvantages (Cons): 1.Can Examples:Bitcoin and Ethereum are prime examples of public blockchains. Advantages:1.Fully decentralized
lead to centralization, as those with more staked tokens have more power.2. Initial staking requirements can with no single point of control.2.High transparency and security due to the open and trustless environment.
be high, making it difficult for smaller participants to participate. Disadvantages: 1.Slower transaction speeds due to the large number of participants.2. Higher energy
consumption (especially in PoW systems).
Q4] Explain the Byzantine General Problem in the context of blockchain consensus.
2.Private Blockchain:Definition: A private blockchain is a permissioned network controlled by a single
1.Concept:The Byzantine General Problem is a situation in which multiple parties (generals) must agree on a
organization or a group of trusted participants. Access: Only authorized participants are allowed to join the
single course of action, but some of the parties may act dishonestly or fail to communicate effectively.
network and validate transactions. Access is restricted by the central authority. Examples: Hyperledger and
2.Challenge:The challenge is to achieve consensus despite the presence of faulty or malicious participants
Ripple are examples of private blockchains. Advantages: 1.Faster transactions and better scalability compared
who may attempt to mislead the others. 3.Relevance to Blockchain:In blockchain, this problem arises when
to public blockchains.2.Greater control over who can access and validate the blockchain. Disadvantages:
nodes (participants) in the network must agree on the validity of transactions or the state of the blockchain,
1.Less decentralized, leading to a higher risk of centralization.2.Lower transparency and trust, as the
even if some nodes are compromised or malfunctioning. 4.Solution:Blockchain uses consensus algorithms
governing body has more control.
like Proof of Work (PoW) or Proof of Stake (PoS) to ensure that honest nodes can reach agreement and
3.Consortium Blockchain: Definition: A consortium blockchain is a hybrid model where the network is
maintain the integrity of the network, even in the presence of faulty or malicious nodes.
controlled by a group of organizations rather than a single entity. Access: It is permissioned, with multiple
U3 Q5] Explain the difference between a permissioned and permissionless consensus approach. trusted entities having the authority to validate transactions, making it more decentralized than a private
A]Permissioned Consensus Approach: 1.Access Control:Only authorized participants can join the network blockchain. Examples: R3 Corda and Enterprise Ethereum are examples of consortium
and validate transactions. 2.Centralized Authority:A central organization or consortium controls who can blockchains.Advantages: 1.More scalable and efficient than public blockchains.2.Decentralized governance
participate in the consensus process. 3.Governance:Governance is typically defined by the controlling through multiple trusted participants, enhancing security. Disadvantages:1.Not as decentralized as public
organization or group, with set rules and permissions. 4.Examples:Hyperledger, Ripple, and Corda use blockchains, since only a select group can validate transactions.2.Requires a high level of trust among
permissioned blockchains. 5.Transaction Speed:Faster transaction processing due to limited participants and Q8] Explain the concept of Bitcoin in Blockchain Technology. [4]
controlled validation. 6.Security:Higher security and trust due to the involvement of trusted and vetted Ans: 1.Decentralized Currency: Bitcoin is a digital cryptocurrency that operates without a central authority or
participants. B] Permissionless Consensus Approach: 1.Access Control:Anyone can join the network and bank. It uses blockchain technology to enable peer-to-peer transactions directly between users.2.Blockchain
participate in the consensus process without requiring permission. 2.Decentralized Authority:No central as a Ledger:Bitcoin transactions are recorded on a public ledger called the blockchain. The blockchain is a
authority; decisions are made by network participants collectively. 3.Governance:Governance is community- distributed and immutable record, ensuring transparency and security for every transaction. 3.Proof of Work
driven, with participants voting on important protocol changes. 4.Examples:Bitcoin, Ethereum, and other (PoW): Bitcoin uses a consensus mechanism called proof-of-work to validate transactions. Miners solve
public blockchains use permissionless consensus. 5.Transaction Speed:Slower transaction processing due to complex cryptographic puzzles to add new blocks to the blockchain.4.Security and Transparency: Bitcoin’s
the large number of participants and lack of centralized control. 6.Security: Security relies on consensus blockchain ensures secure and transparent transactions. Each transaction is cryptographically verified, making
mechanisms like PoW or PoS, with participants incentivized to act honestly. it tamper-proof and visible to all participants in the network.
Q9] Explain the role of IOTA in the context of the Internet of Things (IoT).
Q6] Discuss the difference between Bitcoin and Ethereum. [4]
1.Tangle Technology:IOTA uses the Tangle, a Directed Acyclic Graph (DAG) instead of a traditional blockchain.
1.Purpose: Bitcoin: Created as a digital currency for peer-to-peer transactions and a store of value.
This allows faster and more scalable transactions in IoT environments. 2.Microtransactions: IOTA enables
Ethereum: Designed as a platform for decentralized applications (dApps) and executing smart
feeless microtransactions, making it ideal for IoT devices to exchange small amounts of data or payments
contracts.2.Blockchain:Bitcoin: Has a simple blockchain primarily used to record transactions of
without transaction costs. 3.Scalability: IOTA's Tangle structure can handle a large number of transactions
Bitcoin.Ethereum: Has a more advanced blockchain supporting not just transactions but also smart contracts
concurrently, offering better scalability for IoT networks with millions of devices. 4.Decentralized Data
and decentralized applications.3.Smart Contracts:Bitcoin: Does not support smart contracts directly, focusing
Integrity: IOTA provides a secure, decentralized method to verify data shared between IoT devices, ensuring
only on transactions.Ethereum: Fully supports smart contracts, enabling programmable and automated
data integrity without the need for intermediaries. 5.Low Power Consumption: IOTA is designed to work
transactions.4.Consensus Mechanism: Bitcoin: Uses Proof of Work (PoW), where miners solve complex
efficiently with IoT devices that have limited processing power and energy resources, enabling devices to
puzzles to validate transactions.Ethereum: Initially used PoW but is transitioning to Proof of Stake (PoS) for
operate with minimal energy use. 6.Enhanced Security: IOTA’s cryptographic protocol ensures secure data
better scalability and lower energy consumption.5.Supply Cap:Bitcoin: Has a fixed supply limit of 21 million
transmission and prevents tampering, making it suitable for IoT applications that require reliable and secure
coins.Ethereum: Has no fixed supply cap, meaning more Ether can be created as needed.6.Transaction
communication.
Speed: Bitcoin: Slower transaction speeds, averaging 7 transactions per second (TPS).Ethereum: Faster
[UNIT 3]
transaction speeds, supporting up to 30-45 TPS, with future improvements expected after the PoS transition.