Question 1(a) [3 marks]

Short Note on: Distributed Ledger

Answer:

Table: Distributed Ledger Features

Feature	Description
Definition	Database spread across multiple computers
Storage	Data stored in multiple locations
Control	No single authority owns it
Updates	All copies updated simultaneously

Decentralized: No central server needed
Transparent: All participants can see transactions
Secure: Uses cryptography for protection

Mnemonic: "Data Stored Transparently Securely" (DSTS)

Question 1(b) [4 marks]

Describe the applications of Blockchain.

Answer:

Table: Blockchain Applications

Application	Use Case	Benefit
Cryptocurrency	Digital money like Bitcoin	Secure payments
Supply Chain	Track products from source	Prevent fake goods
Healthcare	Store medical records	Data security
Voting	Electronic voting system	Transparent elections
Real Estate	Property records	Fraud prevention

Finance: Faster cross-border payments
Identity: Digital ID verification
Smart Contracts: Automated agreements

Mnemonic: "Money, Medicine, Voting, Property" (MMVP)

Question 1(c) [7 marks]

Explain Asymmetric Encryption Model with example.

Answer:

Diagram: Asymmetric Encryption Process

graph LR
    A[Sender] --> B[Public Key]
    B --> C[Encrypt Message]
    C --> D[Encrypted Data]
    D --> E[Receiver]
    E --> F[Private Key]
    F --> G[Decrypt Message]
    G --> H[Original Message]

Table: Key Comparison

Key Type	Purpose	Sharing	Example
Public Key	Encryption	Shared openly	RSA Public Key
Private Key	Decryption	Kept secret	RSA Private Key

Example Process:

Alice wants to send message to Bob
Alice uses Bob's public key to encrypt
Only Bob's private key can decrypt
Bob receives and decrypts message

Security: Even if public key is known, data stays safe
Authentication: Proves sender identity
Non-repudiation: Sender cannot deny sending

Mnemonic: "Public Encrypts, Private Decrypts" (PEPD)

Question 1(c OR) [7 marks]

Explain Consistency, Availability and Partition Tolerance (CAP) theorem in Blockchain.

Answer:

Diagram: CAP Theorem Triangle

graph LR
    A[CAP Theorem]
    A --> B[Consistency]
    A --> C[Availability]
    A --> D[Partition Tolerance]
    
    B --> E["All nodes see same data"]
    C --> F["System always responds"]
    D --> G["Works despite network failures"]

Table: CAP Properties

Property	Definition	Blockchain Focus
Consistency	All nodes have same data	Medium priority
Availability	System always responds	High priority
Partition Tolerance	Works with network splits	High priority

Key Points:

Trade-off: Can only guarantee 2 out of 3 properties
Blockchain Choice: Usually prioritizes Availability + Partition Tolerance
Real Example: Bitcoin chooses AP over C (eventual consistency)

Mnemonic: "Choose Any Two" (CAT)

Question 2(a) [3 marks]

Define: Public key, Private key, Digital Signature.

Answer:

Table: Cryptographic Components

Component	Definition	Usage
Public Key	Encryption key shared openly	Encrypt data, verify signatures
Private Key	Secret key kept by owner	Decrypt data, create signatures
Digital Signature	Encrypted hash of message	Prove authenticity and integrity

Mnemonic: "Public Protects, Private Proves" (PPPP)

Question 2(b) [4 marks]

Explain Public blockchain with its advantage and disadvantage.

Answer:

Table: Public Blockchain Analysis

Aspect	Details
Definition	Open network accessible to everyone
Examples	Bitcoin, Ethereum

Advantages:

Transparency: All transactions visible
Decentralization: No single control
Security: Many nodes validate

Disadvantages:

Speed: Slow transaction processing
Energy: High power consumption
Scalability: Limited transactions per second

Mnemonic: "Transparent but Slow" (TBS)

Question 2(c) [7 marks]

Describe Core components of Blockchain.

Answer:

Diagram: Blockchain Structure

graph TB
    A[Block N-1] --> B[Block N]
    B --> C[Block N+1]
    
    B --> D[Block Header]
    B --> E[Transaction Data]
    
    D --> F[Previous Hash]
    D --> G[Merkle Root]
    D --> H[Timestamp]
    D --> I[Nonce]

Table: Core Components

Component	Function	Importance
Block	Container for transactions	Data storage
Hash	Unique identifier	Security
Merkle Tree	Transaction summary	Verification
Nonce	Mining number	Proof of work
Timestamp	Time record	Chronological order
Previous Hash	Links to previous block	Chain integrity

Immutability: Cannot change past records
Transparency: All data visible
Consensus: Network agrees on validity

Mnemonic: "Blocks Hash Merkle Nonce Time Previous" (BHMNTP)

Question 2(a OR) [3 marks]

Short Note on: SideChain

Answer:

Table: SideChain Features

Feature	Description
Definition	Separate blockchain connected to main chain
Purpose	Extend main blockchain functionality
Connection	Two-way peg mechanism

Scalability: Reduces main chain load
Flexibility: Custom features possible
Security: Inherits main chain security

Mnemonic: "Separate Side Scales" (SSS)

Question 2(b OR) [4 marks]

Explain Private blockchain with its advantage and disadvantage.

Answer:

Table: Private Blockchain Analysis

Aspect	Details
Definition	Restricted network with controlled access
Control	Single organization manages

Advantages:

Speed: Faster transactions
Privacy: Controlled data access
Efficiency: Lower energy consumption
Compliance: Meets regulatory requirements

Disadvantages:

Centralization: Single point of control
Trust: Relies on controlling organization
Limited: Fewer participants

Mnemonic: "Fast Private Controlled" (FPC)

Question 2(c OR) [7 marks]

Explain Data structure of Blockchain.

Answer:

Diagram: Blockchain Data Structure

+------------------+    +------------------+    +------------------+
|     Block 1      |    |     Block 2      |    |     Block 3      |
+------------------+    +------------------+    +------------------+
| Previous Hash: 0 |<---| Previous Hash    |<---| Previous Hash    |
| Merkle Root      |    | Merkle Root      |    | Merkle Root      |
| Timestamp        |    | Timestamp        |    | Timestamp        |
| Nonce            |    | Nonce            |    | Nonce            |
+------------------+    +------------------+    +------------------+
| Transaction 1    |    | Transaction 1    |    | Transaction 1    |
| Transaction 2    |    | Transaction 2    |    | Transaction 2    |
| Transaction 3    |    | Transaction 3    |    | Transaction 3    |
+------------------+    +------------------+    +------------------+

Table: Data Structure Elements

Element	Purpose	Size
Block Header	Contains metadata	Fixed size
Transaction List	Actual data	Variable size
Hash Pointer	Links blocks	256 bits
Merkle Tree	Transaction summary	Logarithmic

Key Features:

Linear Structure: Blocks linked in sequence
Hash Linking: Each block references previous
Merkle Trees: Efficient transaction verification
Immutable: Cannot modify without detection

Mnemonic: "Linear Hash Merkle Immutable" (LHMI)

Question 3(a) [3 marks]

Short Note on: Consensus Mechanism in Blockchain.

Answer:

Table: Consensus Mechanism

Aspect	Description
Purpose	Agree on network state
Need	Prevent double spending
Types	PoW, PoS, DPoS

Agreement: All nodes must agree
Decentralization: No central authority
Security: Prevents malicious activities

Mnemonic: "Agreement Prevents Security" (APS)

Question 3(b) [4 marks]

Compare Hard Fork and Soft Fork in Blockchain.

Answer:

Table: Fork Comparison

Feature	Hard Fork	Soft Fork
Compatibility	Not backward compatible	Backward compatible
Rules	Creates new rules	Tightens existing rules
Upgrade	All nodes must upgrade	Optional upgrade
Result	Two separate chains	Single chain continues
Example	Ethereum to Ethereum Classic	Bitcoin SegWit

Key Differences:

Hard Fork: Permanent split in blockchain
Soft Fork: Temporary restriction that becomes permanent

Mnemonic: "Hard Splits, Soft Restricts" (HSSR)

Question 3(c) [7 marks]

What is Proof of Work? How does it work? Explain with example.

Answer:

Diagram: Proof of Work Process

graph LR
    A[New Transactions] --> B[Create Block]
    B --> C[Calculate Hash]
    C --> D{Hash starts with zeros?}
    D -->|No| E[Change Nonce]
    E --> C
    D -->|Yes| F[Block Valid]
    F --> G[Add to Blockchain]
    G --> H[Miner Rewarded]

Table: PoW Components

Component	Function	Example
Hash Function	Creates unique fingerprint	SHA-256
Nonce	Random number to change hash	12345
Difficulty	Required number of leading zeros	4 zeros
Mining	Computing process	Bitcoin mining

Working Process:

Collect pending transactions
Create block with transactions
Try different nonce values
Calculate hash repeatedly
Find hash with required zeros
Broadcast valid block to network

Bitcoin Example:

Target: Hash must start with specific zeros
Time: ~10 minutes per block
Reward: 6.25 BTC (as of 2024)

Mnemonic: "Try Calculate Until Zero" (TCUZ)

Question 3(a OR) [3 marks]

Short Note on: Block Rewards in Blockchain.

Answer:

Table: Block Rewards

Feature	Description
Purpose	Incentivize miners
Components	Block reward + transaction fees
Bitcoin	Started at 50 BTC, halves every 4 years

Motivation: Encourages network participation
Halving: Reduces inflation over time
Fees: Additional income for miners

Mnemonic: "Miners Motivated Money" (MMM)

Question 3(b OR) [4 marks]

What is 51% attack and how does it work?

Answer:

Table: 51% Attack Analysis

Aspect	Details
Definition	Controlling majority mining power
Threshold	More than 50% network hash rate
Capability	Can reverse transactions
Limitation	Cannot steal others' coins

How it Works:

Attacker gains majority mining power
Creates private blockchain fork
Mines faster than honest network
Releases longer chain to network
Network accepts longer chain as valid

Consequences:

Double Spending: Spend same coins twice
Transaction Reversal: Cancel confirmed transactions
Network Trust: Damages blockchain credibility

Mnemonic: "Majority Controls Chain" (MCC)

Question 3(c OR) [7 marks]

What is Proof of Stake? How does it work? Explain with example.

Answer:

Diagram: Proof of Stake Process

graph LR
    A[Validators Stake Coins] --> B[Random Selection]
    B --> C[Selected Validator]
    C --> D[Propose New Block]
    D --> E[Other Validators Vote]
    E --> F{Majority Agrees?}
    F -->|Yes| G[Block Added]
    F -->|No| H[Block Rejected]
    G --> I[Validator Rewarded]
    H --> J[Validator Penalized]

Table: PoS vs PoW

Feature	Proof of Stake	Proof of Work
Energy	Low consumption	High consumption
Selection	Stake-based	Computing power
Hardware	Regular computer	Specialized miners
Speed	Faster	Slower

Working Process:

Validators lock coins as stake
Algorithm selects validator randomly
Selection probability based on stake size
Chosen validator proposes block
Other validators verify and vote
Rewards distributed to honest validators

Ethereum Example:

Minimum Stake: 32 ETH required
Penalties: Slashing for malicious behavior
Rewards: Annual percentage yield

Key Benefits:

Energy Efficient: No intensive mining
Economic Security: Validators lose stake if dishonest
Scalability: Faster transaction processing

Mnemonic: "Stake Select Validate Reward" (SSVR)

Question 4(a) [3 marks]

Describe Byzantine Fault Tolerance.

Answer:

Table: Byzantine Fault Tolerance

Aspect	Description
Problem	Some nodes may act maliciously
Tolerance	System works despite faulty nodes
Requirement	Less than 1/3 nodes can be faulty

Consensus: Honest nodes must agree
Resilience: Network survives attacks
Application: Used in blockchain consensus

Mnemonic: "Faulty Nodes Tolerated" (FNT)

Question 4(b) [4 marks]

How smart contract works in blockchain?

Answer:

Diagram: Smart Contract Execution

graph LR
    A[Contract Created] --> B[Deployed on Blockchain]
    B --> C[Conditions Met]
    C --> D[Automatic Execution]
    D --> E[Results Recorded]

Working Process:

Creation: Developer writes contract code
Deployment: Contract stored on blockchain
Trigger: External event activates contract
Execution: Code runs automatically
Immutable: Cannot be changed after deployment

Key Features:

Self-executing: No intermediary needed
Transparent: Code visible to all
Cost-effective: Reduces transaction costs

Mnemonic: "Code Executes Automatically" (CEA)

Question 4(c) [7 marks]

What is SHA-256 and what is the use of SHA-256 in Blockchain.

Answer:

Table: SHA-256 Properties

Property	Description
Full Name	Secure Hash Algorithm 256-bit
Output	Always 256 bits (64 hex characters)
Input	Any size data
Nature	One-way function

Diagram: SHA-256 in Blockchain

graph LR
    A[Block Data] --> B[SHA-256 Hash]
    B --> C[Block Hash]
    C --> D[Previous Hash Reference]
    D --> E[Chain Integrity]

Uses in Blockchain:

Block Hashing: Create unique block identifier
Merkle Trees: Summarize all transactions
Proof of Work: Mining difficulty target
Digital Signatures: Secure transaction signing
Wallet Addresses: Generate Bitcoin addresses

Key Properties:

Deterministic: Same input = same output
Avalanche Effect: Small change = completely different hash
Irreversible: Cannot find input from output
Collision Resistant: Two inputs rarely same output

Example:

Input: "Hello World"
SHA-256: a591a6d40bf420404a011733cfb7b190d62c65bf0bcda32b57b277d9ad9f146e

Mnemonic: "Hash Identifies Secures Proves" (HISP)

Question 4(a OR) [3 marks]

Explain Bitcoin and eventual consistency.

Answer:

Table: Bitcoin Consistency

Concept	Description
Eventual Consistency	All nodes eventually agree
Temporary Forks	Multiple valid chains exist
Resolution	Longest chain wins

Time Delay: Network propagation takes time
Confirmation: More blocks = higher certainty
Finality: Becomes practically irreversible

Mnemonic: "Eventually Everyone Agrees" (EEA)

Question 4(b OR) [4 marks]

Discuss types of smart contract in blockchain.

Answer:

Table: Smart Contract Types

Type	Function	Example
Legal Contract	Legally binding agreements	Real estate transfer
Application Logic	Decentralized app functions	Token exchange
Decentralized Autonomous	Self-governing organizations	DAO voting
Multi-signature	Require multiple approvals	Escrow services

Key Categories:

Financial: Payment and lending contracts
Insurance: Automated claim processing
Supply Chain: Track product authenticity
Gaming: In-game asset management

Mnemonic: "Legal Logic Autonomous Multi" (LLAM)

Question 4(c OR) [7 marks]

Define Merkle Tree and explain how it works in blockchain.

Answer:

Diagram: Merkle Tree Structure

                Root Hash (ABCD)
                /              \
          Hash(AB)              Hash(CD)
          /      \              /      \
     Hash(A)   Hash(B)    Hash(C)   Hash(D)
        |        |          |        |
      Tx A     Tx B       Tx C     Tx D

Table: Merkle Tree Benefits

Benefit	Description
Efficiency	Verify transactions without downloading all data
Security	Any change detected immediately
Scalability	Logarithmic verification time
Storage	Compact representation

Working Process:

Hash Transactions: Each transaction gets hash
Pair Hashing: Combine adjacent hashes
Repeat Process: Continue until single root hash
Root Storage: Store only root in block header
Verification: Prove transaction with path to root

Blockchain Usage:

Block Header: Contains Merkle root
SPV Verification: Light clients verify without full blockchain
Tamper Detection: Any change breaks tree structure
Efficient Sync: Download only necessary parts

Bitcoin Example:

Block contains thousands of transactions
Only 32-byte Merkle root stored in header
Can verify any transaction with ~10 hashes

Mnemonic: "Tree Organizes Verifies Efficiently" (TOVE)

Question 5(a) [3 marks]

Short Note on: Bitcoin Scripting

Answer:

Table: Bitcoin Scripting

Feature	Description
Language	Stack-based programming language
Purpose	Define spending conditions
Execution	Runs when coins are spent

Simple: Basic operations only
Secure: Limited functionality prevents abuse
Flexible: Various transaction types possible

Mnemonic: "Stack Defines Spending" (SDS)

Question 5(b) [4 marks]

Explain Decentralized Applications (dApps) in Blockchain and how does it work?

Answer:

Table: dApp Components

Component	Function
Frontend	User interface
Backend	Smart contracts on blockchain
Storage	Decentralized storage systems
Network	Peer-to-peer communication

Working Process:

User interacts with web interface
Frontend connects to blockchain
Smart contracts execute business logic
Results stored on blockchain
Updates reflect across network

Key Features:

No Central Server: Runs on distributed network
Open Source: Code publicly available
Autonomous: Operates without company control

Mnemonic: "Decentralized Apps Run Everywhere" (DARE)

Question 5(c) [7 marks]

Explain Hyperledger with its advantages and disadvantages.

Answer:

Table: Hyperledger Overview

Aspect	Description
Type	Private/Consortium blockchain platform
Developer	Linux Foundation
Target	Enterprise applications
Consensus	Pluggable consensus mechanisms

Diagram: Hyperledger Architecture

graph LR
    A[Application Layer] --> B[Hyperledger Fabric]
    B --> C[Chaincode/Smart Contracts]
    B --> D[Consensus Layer]
    B --> E[Membership Services]
    D --> F[Ordering Service]
    E --> G[Certificate Authority]

Advantages:

Performance: High transaction throughput
Privacy: Confidential transactions
Modular: Pluggable components
Enterprise Ready: Production-grade features
Governance: Controlled network access
Compliance: Meets regulatory requirements

Disadvantages:

Centralization: Not fully decentralized
Complexity: Difficult to set up
Vendor Lock-in: Platform dependency
Limited Transparency: Private network
Cost: Expensive infrastructure

Use Cases:

Supply chain management
Trade finance
Healthcare records
Identity management

Mnemonic: "Private Performance Enterprise" (PPE)

Question 5(a OR) [3 marks]

Short Note on: Bitcoin Mining

Answer:

Table: Bitcoin Mining

Aspect	Description
Purpose	Validate transactions and create blocks
Process	Solve cryptographic puzzles
Reward	BTC + transaction fees

Hardware: Specialized ASIC miners
Energy: High electricity consumption
Competition: Global mining pools compete

Mnemonic: "Validate Solve Reward" (VSR)

Question 5(b OR) [4 marks]

Short Note on: Decentralized Autonomous Organization (DAO)

Answer:

Table: DAO Features

Feature	Description
Governance	Community-driven decisions
Voting	Token-based voting rights
Automation	Smart contracts execute decisions
Transparency	All activities on blockchain

Key Characteristics:

No Central Authority: Community controlled
Token Ownership: Voting power based on tokens
Proposal System: Members suggest changes
Automatic Execution: Approved proposals execute automatically

Examples:

MakerDAO (DeFi protocol)
Uniswap (Decentralized exchange)
Aragon (DAO infrastructure)

Challenges:

Security Risks: Smart contract vulnerabilities
Governance Issues: Low voter participation
Legal Status: Regulatory uncertainty

Mnemonic: "Community Votes Automatically" (CVA)

Question 5(c OR) [7 marks]

Explain ERC-20 with its advantages and disadvantages

Answer:

Table: ERC-20 Standard

Aspect	Description
Full Name	Ethereum Request for Comments 20
Type	Token standard on Ethereum
Functions	Standardized token operations
Compatibility	Works with all Ethereum wallets

Diagram: ERC-20 Token Flow

graph LR
    A[Token Contract] --> B[Transfer Function]
    B --> C[Update Balances]
    C --> D[Emit Event]
    D --> E[Wallet Updates]

Required Functions:

Function	Purpose
totalSupply()	Return total token supply
balanceOf()	Check account balance
transfer()	Send tokens to address
approve()	Allow spending on behalf
transferFrom()	Transfer approved tokens
allowance()	Check approved amount

Advantages:

Standardization: Uniform interface for all tokens
Interoperability: Works with any Ethereum wallet/exchange
Easy Integration: Simple for developers to implement
Liquidity: Can trade on decentralized exchanges
Smart Contract: Programmable money features
Global Access: Available worldwide 24/7

Disadvantages:

Gas Fees: Ethereum transaction costs
Scalability: Network congestion issues
Flexibility: Limited compared to newer standards
Security: Smart contract vulnerabilities
Complexity: Technical knowledge required
Regulatory: Unclear legal status

Popular ERC-20 Tokens:

USDT (Tether)
LINK (Chainlink)
UNI (Uniswap)

Mnemonic: "Standard Tokens Trade Everywhere" (STTE)