Ganpat University

Department of Compute Science

M.Sc. (CA & IT_ Semester – II
P22A4BCT ) Block chain Technology
Assignment

Unit 1: Introduction to Block chain

1. Define the history and evolution of block chain.

Ans: - Blockchain is a decentralized digital ledger that securely records

transactions across a network of computers. It ensures transparency, security,
and immutability without needing a central authority.

History and Evolution of Blockchain

1. Origins (1991–2008): Stuart Haber and W. Scott Stornetta introduced the

idea of a cryptographically secured chain. Nick Szabo’s Bit Gold laid the
foundation for decentralized digital currency.
2. Bitcoin Era (2008–2013): Satoshi Nakamoto launched Bitcoin in 2009,
creating the first blockchain as a decentralized ledger for peer-to-peer
transactions.
3. Ethereum & Smart Contracts (2013–2015): Vitalik Buterin introduced
Ethereum in 2015, enabling smart contracts and decentralized applications
(DApps).
4. Enterprise & DeFi Growth (2016–2020): Industries adopted blockchain,
Hyperledger emerged, ICOs surged, and Decentralized Finance (DeFi)
platforms gained traction.
 5. NFTs & Web3 (2020–Present): Non-Fungible Tokens (NFTs) became popular,
blockchain powered Web3 innovations, and institutional adoption increased.
6. Future Trends: Focus on scalability, interoperability, sustainability, and
regulatory developments. Blockchain continues to evolve, shaping industries
worldwide.

2. Define the terms 'Digital Money' and 'Distributed Ledgers'.

Ans: - Digital Money

Digital money is currency that exists only in electronic form and is used for online
transactions. It includes cryptocurrencies (e.g., Bitcoin, Ethereum), Central Bank
Digital Currencies (CBDCs), and e-money (e.g., PayPal, mobile wallets).

Distributed Ledgers

A distributed ledger is a decentralized database shared across multiple participants

in a network, ensuring transparency and security. Blockchain is a type of
distributed ledger, but other forms include DAGs (IOTA’s Tangle) and enterprise
ledgers (Hyperledger, Corda).

3. Explain the transition from digital money to distributed ledgers.

Ans: - Transition from Digital Money to Distributed Ledgers

The transition from digital money to distributed ledgers happened to make

financial transactions faster, cheaper, and more secure.

1. Old Digital Money: Banks, PayPal, and credit cards used centralized
systems to track transactions, but these had high fees, slow processing, and
security risks.
2. Problems: People had to trust banks, and transactions could be hacked,
delayed, or manipulated.
 3. Solution - Blockchain & DLT: Instead of one central authority, a network
of computers keeps a shared, tamper-proof record of transactions.
4. Bitcoin (2009): First real example of blockchain, enabling peer-to-peer
money transfers without banks.
5. Beyond Bitcoin: Ethereum added smart contracts (automated agreements),
and companies & governments started using blockchain for finance, supply
chains, and even digital currencies (CBDCs).

4. List the design primitives of blockchain.

Ans: - Design Primitives of Blockchain

The main design primitives of blockchain include:

1. Decentralization – No central authority.

2. Distributed Ledger – Shared, immutable transaction records.
3. Consensus Mechanisms – Validation rules (e.g., PoW, PoS).
4. Cryptographic Security – Hashing & digital signatures.
5. Immutability – Transactions cannot be altered.
6. Transparency & Privacy – Public or private access control.
7. Smart Contracts – Self-executing agreements.
8. Tokenization – Digital asset creation and transfer.
9. Block: A collection of transactions that are processed and approved together on the
shared ledger
10. Chain: A chronological link between blocks, each containing data
 5. Describe blockchain protocols, security measures, and consensus
mechanisms.

Ans: - Blockchain Protocols, Security Measures, and Consensus Mechanisms

1. Blockchain Protocols

Blockchain protocols define the rules and structure for how a blockchain network
operates. Examples:

• Bitcoin (BTC): Uses Proof of Work (PoW) for secure transactions.

• Ethereum (ETH): Supports smart contracts and decentralized applications.
• Hyperledger Fabric: A permissioned blockchain for enterprise use.
• Polkadot & Cosmos: Focus on interoperability between blockchains.

2. Security Measures

Blockchain security ensures data integrity and protection against attacks:

• Cryptographic Hashing (SHA-256, Keccak-256): Secures transaction data.

• Public & Private Key Encryption: Ensures secure ownership and transfers.
• Immutability: Prevents data tampering after block confirmation.
• Distributed Network: Reduces risks of central point failures.
• 51% Attack Protection: Networks with strong mining power or staking
reduce takeover risks.
3. Consensus Mechanisms

Consensus mechanisms validate transactions and maintain network integrity:

• Proof of Work (PoW): Miners solve cryptographic puzzles (Bitcoin).

• Proof of Stake (PoS): Validators stake coins to verify transactions (Ethereum
2.0).
 • Delegated Proof of Stake (DPoS): Users elect validators (EOS, TRON).
• Proof of Authority (PoA): Trusted validators confirm transactions (VeChain).
• Byzantine Fault Tolerance (BFT): Ensures consensus despite faulty nodes
(Hyperledger, Tendermint).

6. Summarize the key features of blockchain design.

Ans: - Blockchain design refers to the structure, components, and mechanisms

that enable a decentralized, secure, and transparent digital ledger. It defines
how transactions are recorded, verified, and maintained across a distributed
network.

Key Features of Blockchain Design

1. Decentralization – No central authority; transactions are verified by

distributed nodes.
2. Distributed Ledger – A shared, tamper-proof record of transactions across all
participants.
3. Consensus Mechanisms – Rules for transaction validation (e.g., PoW, PoS,
BFT).
4. Cryptographic Security – Uses hashing and digital signatures for secure data
integrity.
5. Immutability – Once recorded, data cannot be altered or deleted.
6. Transparency & Privacy – Public blockchains are transparent, while private
blockchains restrict access.
7. Smart Contracts – Self-executing contracts that automate transactions.
8. Scalability & Interoperability – Layer 2 solutions and cross-chain
communication enhance performance.
 7. Compare and contrast various consensus mechanisms .

Ans: - Consensus mechanisms are protocols that ensure agreement on

transaction validity in a decentralized network. Here’s a comparison of some
major consensus mechanisms:

Comparison of Consensus Mechanisms

Consensu
s How It Works Pros Cons Examples
Mechanis
m
Miners solve High energy
Proof of Secure,
cryptographic consumption, Bitcoin,
Work decentrali
puzzles to validate slow transactions Litecoin
(PoW) zed
transactions.
Energy-
Proof of Validators stake Wealth Ethereum
efficient,
Stake coins to propose and concentration 2.0,
faster
(PoS) validate blocks. risk Cardano
than PoW
Delegated Coin holders vote for Centralization risk
Proof of delegates to validate Scalable, (few validators
EOS, TRON
Stake transactions. efficient control network)
(DPoS)
High
Proof of Pre-approved efficiency, VeChain,
Centralized, trust-
Authority validators confirm low energy Hyperledg
based
(PoA) transactions. use er
 Byzantine Nodes reach Hyperledg
Fault consensus even if Fast, er,
Less decentralized
Tolerance some act faulttolerant Tendermin
(BFT) maliciously. t (Cosmos)

8. Explain the concepts of permissions and privacy in blockchain.

Ans: - These concepts define who can access, validate, and interact with the
blockchain.

Permissions and Privacy in Blockchain

1. Permissions in Blockchain

Permissions determine who can participate in the network and what actions they can perform. Blockchains are
classified into:

🔹 Public Blockchain (Permissionless)

 Anyone can join, validate transactions, and participate in consensus.

 Fully decentralized and open-source.
 Examples: Bitcoin, Ethereum

🔹 Private Blockchain (Permissioned)

 Only approved participants can join and validate transactions.

 Controlled by a central entity or a consortium.
 Examples: Hyperledger Fabric, Corda

2. Privacy in Blockchain
Privacy defines how much transaction data is visible and to whom. Different privacy mechanisms exist:

🔹 Transparent Blockchain

 All transactions and wallet balances are publicly visible.

  Examples: Bitcoin, Ethereum

🔹 Privacy-Focused Blockchain

 Uses cryptographic techniques to hide transaction details.

 Examples: Monero, Zcash

9. Analyze real-world applications of blockchain in different industries.

Ans: - Real-World Applications of Blockchain

1. Finance & Banking: Fast payments (Bitcoin, Ripple), DeFi (Uniswap, Aave),
and secure transactions.
2. Supply Chain: Product traceability (IBM Food Trust), anti-counterfeiting
(VeChain).
3. Healthcare: Secure patient records (MedRec), drug authentication.
4. Real Estate: Smart contracts for property sales (Propy), fraud prevention in
land registries.
5. Government: Digital identity (Estonia e-Residency), blockchain voting
(Voatz).
6. Media & Entertainment: Copyright protection (KodakOne), NFTs (OpenSea).
7. Energy & Sustainability: Peer-to-peer energy trading (Power Ledger), carbon
credit tracking
10. Evaluate the impact of blockchain on data security and privacy.

Ans: -impact of Blockchain on Data Security & Privacy Security a Security &
Privacy

✅ Better Security:
  Tamper-proof records – Once data is added, it cannot be changed or
deleted (immutability).
 Stronger encryption – Uses cryptography to protect data from hacks.
 No single point of failure – Data is stored across multiple computers,
reducing cyberattack risks.
✅ Better Privacy:

 Identity transactions – Users are identified by wallet addresses, not personal

info.
 Privacy coins (Monero, Zcash) – Hide transaction details using advanced
cryptography.
 Selective data sharing – Technologies like Zero-Knowledge Proofs (ZKPs)
allow proving information without revealing details

11. Propose a hypothetical blockchain-based system for a specific

use case.

Ans: - Hypothetical Blockchain-Based System: "MediChain" – A Secure

Healthcare Data Exchange

Use Case:

A decentralized medical records system that allows patients, doctors, and

hospitals to securely store, share, and access health data while maintaining privacy
and compliance.

Features:

Immutable Records – Prevents tampering.

Smart Contracts – Automates insurance claims.
Zero-Knowledge Proofs (ZKPs) – Protects patient privacy.
Interoperability – Connects hospitals, pharmacies, and insurers.
Patient-Controlled Access – Users manage who can view their da

Benefits:

Security: Prevents unauthorized data modifications.

Privacy: Patients retain full control over their health records.
Efficiency: Reduces paperwork, fraud, and delays in medical services.

12. Design a basic blockchain protocol considering security and

consensus requirements.

Ans: - Basic Blockchain Protocol: "Secure Chain"

1) Key Features

Permissioned Access: Only verified participants can join the network. Consensus
Mechanism: Combines Proof of Stake (PoS) + Byzantine Fault Tolerance (BFT) for
efficiency and security.
Cryptographic Security: Uses SHA-256 hashing & digital signatures for data
integrity.
Immutability: Transactions, once validated, cannot be altered.
Smart Contracts: Automates agreements using self-executing logic.

2) Consensus Mechanism

🔹 PoS – Validators are chosen based on stake, reducing energy use. 🔹 BFT –
Ensures fault tolerance even if some nodes act maliciously.

3) Security Measures

🔹 Zero-Knowledge Proofs (ZKPs): Enables privacy-preserving transactions.

🔹 Multi-Factor Authentication (MFA): Strengthens identity verification.
🔹 End-to-End Encryption: Ensures secure data exchange between participants.
13.Critically assess the limitations and challenges of blockchain
technology.

Ans: - Limitations and Challenges of Blockchain Technology

1. Scalability Issues

Slow Transaction Speeds – Public blockchains like Bitcoin handle 7 TPS, while Visa
processes 24,000+ TPS.
High Storage Requirements – Full nodes must store ever-growing blockchain
data.

2. Energy Consumption

PoW Blockchains (e.g., Bitcoin) require massive computing power, leading to

environmental concerns.

3. Regulatory Uncertainty

Lack of Global Standards – Governments have varying stances on blockchain and

crypto.
GDPR vs. Immutability – Permanent records conflict with data privacy laws.

4. Security Risks

51% Attacks – If a single entity control >50% of mining power, they can manipulate
transactions.
Smart Contract Bugs – Coding errors can lead to exploits (e.g., DAO hack on
Ethereum).
5. Adoption Barriers

Integration Challenges – Existing businesses struggle to adopt blockchain.

User Education & Complexity – Managing private keys and understanding
blockchain is difficult for non-tech users.

14.Compare the advantages and disadvantages of different consensus

mechanisms.

Ans: - Comparison of Consensus Mechanisms

Consensus
Advantages Disadvantages Examples
Mechanism
⚠ High energy
Proof of Work Highly secure Bitcoin,
consumption ⚠ Slow
(PoW) Decentralized Litecoin
transactions
Energy-
⚠ Wealth Ethereum
Proof of Stake efficient
concentration risk ⚠ 2.0,
(PoS) Faster than
Less decentralized Cardano
PoW
High
Delegated Proof of scalability ⚠ Centralization risk
EOS, TRON
Stake (DPoS) Fast transactions (few validators)
 ⚠ Centralized, requires
Proof of Authority Efficient and low- VeChain,
trust in validators
(PoA) cost Hyperledger

Fast block
validation
Secure even
Byzantine Fault ⚠ Less scalable for Hyperledger ,
with faulty nodes
Tolerance (BFT) large networks Tendermint
Fast finality

Unit 2: Blockchain Architecture, Design, and Consensus

15.Define basic crypto primitives (Hash, Signature) and their role in

blockchain.

Ans: - Basic Crypto Primitives in Blockchain

1. Hash Function

A hash function converts input data into a fixed-length string (hash), ensuring data
integrity and security.
Example: SHA-256 in Bitcoin generates a unique, irreversible hash.
 Role in Blockchain:
Ensures immutability – prevents data tampering.
Links blocks together using hash pointers.
2. Digital Signature

A digital signature is created using private keys to authenticate transactions and

ensure non-repudiation.
Example: ECDSA (Elliptic Curve Digital Signature Algorithm) in Bitcoin.

Role in Blockchain:
Verifies transaction authenticity – proves the sender's identity.
Prevents forgery – only the private key holder can sign transactions.

16.Explain the transition from Hashchain to Blockchain.

Ans: - Transition from Hashchain to Blockchain

1. Hashchain (Predecessor of Blockchain)

A Hashchain is a sequential list of data records, where each record is linked to the
previous one using a cryptographic hash. It ensures data integrity but lacks
decentralization and consensus mechanisms.

🔹 How Hashchain Evolved into Blockchain

Blockchain enhanced Hashchain by introducing:

✅ Decentralization: Multiple nodes maintain the ledger, removing reliance on a

central authority.
✅ Consensus Mechanisms: Proof of Work (PoW), Proof of Stake (PoS), etc.,
ensure agreement on transactions.
✅ Smart Contracts: Automated self-executing agreements on blockchain
(Ethereum).
✅ Transparency & Security: Transactions are verified and recorded permanently.

17.Identify requirements for consensus protocols.

Ans: - Requirements for Consensus Protocols

1. Security – Prevents double-spending, Sybil attacks, and tampering.

2. Decentralization – No single entity should control the network.
3. Scalability – Must handle a high volume of transactions efficiently.
4. Fault Tolerance – Resilient against malicious or faulty nodes (e.g., Byzantine
Fault Tolerance).
5. Finality & Immutability – Transactions must be irreversible once confirmed.
6. Energy Efficiency – Should minimize computational and energy costs.
7. Fairness – Equal participation opportunity for all nodes.

18.Summarize the scalability aspects of blockchain consensus protocols.

Ans: - Scalability Aspects of Blockchain Consensus Protocols

1. Transaction Throughput – The ability to process more transactions per

second (TPS) (e.g., PoS > PoW).
2. Network Latency – Reducing block propagation and validation time for faster
finality.
3. Block Size & Frequency – Larger blocks or shorter block times improve
scalability but increase storage needs.
 4. Layer 2 Solutions – Off-chain scaling methods like Lightning Network
(Bitcoin) and Rollups (Ethereum).
5. Sharding – Divides the blockchain into smaller, parallel chains for higher
efficiency (e.g., Ethereum 2.0).
6. Consensus Efficiency – PoS, DPoS, and BFT-based protocols scale better than
PoW.

19.Explain the importance of basic crypto primitives in blockchain

architecture.

Ans: - Importance of Basic Crypto Primitives in Blockchain Architecture

1. Hash Functions (e.g., SHA-256, Keccak-256)

a. Ensure data integrity and prevent tampering.
b. Link blocks together using hash pointers, ensuring immutability.
2. Digital Signatures (e.g., ECDSA, EdDSA)
a. Provide authentication and non-repudiation in transactions.
b. Ensure only authorized users can initiate transactions.
3. Public-Key Cryptography (e.g., RSA, ECC)
a. Secures identity and enables trustless transactions.
b. Ensures private keys remain confidential while allowing public
verification.
4. Merkle Trees
a. Efficiently verify large amounts of transaction data without storing
entire blocks.
b. Used in SPV (Simplified Payment Verification) for lightweight
blockchain clients.
20.Design a blockchain architecture based on specified requirements.

Ans: - To design a blockchain architecture tailored to specified requirements, I

need details such as:
 Consensus Mechanism – Proof of Work (PoW), Proof of Stake (PoS),
Delegated PoS, etc.
 Network Type – Public, Private, Consortium, or Hybrid.
 Smart Contract Support – Required or not? (e.g., Ethereum-like
functionality).
 Transaction Speed & Scalability – High TPS, Layer-2 solutions, or sharding.
 Security & Privacy – Encryption, zero-knowledge proofs (ZKPs), permissioned
access.
 Use Case – Supply chain, finance, identity management, healthcare, etc.
 Governance Model – Decentralized, semi-centralized, or enterprise-controlled.

Example: "AgriChain" – A Blockchain for Agriculture Supply Chain

📌 Problem:

Farmers, transporters, and retailers face fraud, lack of transparency, and inefficiencies in
food supply chains.

🔗 Solution: AgriChain (Blockchain-Based Tracking System)

1️⃣ Farmer uploads crop details (harvest date, quality, pesticide use) to the blockchain.
2️⃣ Transporter scans QR codes to update delivery status in real-time.
3️⃣ Retailer verifies authenticity of products using blockchain records.
4️⃣ Smart contracts automate payments once delivery is confirmed.

✅ Prevents fraud – No fake product claims.

✅ Boosts efficiency – Automates payments & tracking.
✅ Increases transparency – Consumers verify food origins.
✅ Reduces waste – Real-time monitoring prevents spoilage.