AL-802-A Blockchain Technologies - May 2024 Question Paper

Under each question, How to answer lists the points an answer should cover, outlined by CampusPrep from the syllabus. Check the details against your textbook.

1. 7 Marks
   aWhat is a public ledger and how does it function in the context of financial transactions?
   How to answer

   • Define public ledger as shared, distributed, append-only record
   • Explain decentralization, transparency and immutability
   • Explain functioning in financial transactions: validation, consensus, settlement
   • Give examples like Bitcoin/Ethereum ledger
2. 7 Marks
   bExplain the concept of smart contracts and their potential applications in various industries.
   How to answer

   • Define smart contracts as self-executing code on blockchain
   • Explain working: triggers, deterministic execution, immutability
   • List industry applications: finance, supply chain, healthcare, insurance
   • Mention benefits and limitations
3. 7 Marks
   aWhat is the concept of a block within a block in blockchain technology and how does it contribute to the overall structure?
   How to answer

   • Define block structure: header, transactions, hash, previous hash
   • Clarify block-within-block as nested/encapsulated structure
   • Explain linking and chaining for integrity
   • Explain contribution to security and organization
4. 7 Marks
   bExplain the concept of a Merkle tree and its role in ensuring efficient data verification in blockchain technology.
   How to answer

   • Define Merkle tree as binary hash tree
   • Explain construction: leaf hashes to Merkle root
   • Explain efficient and secure verification with Merkle proofs
   • Explain role in block header and light clients
5. 7 Marks
   aWhat is the Bitcoin peer-two-peer (P2P) network and how does it facilitate the transfer of bitcoins between users?
   How to answer

   • Define Bitcoin P2P network: decentralized nodes, no central server
   • Explain discovery, transaction propagation and validation
   • Explain mining, block broadcast and consensus
   • Explain transfer flow between users via wallets and addresses
6. 7 Marks
   bWhat is HashCash Proof of Work (PoW), and how does it contribute to the security of digital currencies like Bitcoin?
   How to answer

   • Define Hashcash PoW and its origin against spam
   • Explain puzzle: finding nonce with hash below target
   • Explain difficulty adjustment and Sybil resistance
   • Link to Bitcoin mining security and double-spend prevention
7. 7 Marks
   aWhat are the daily challenges and routines in the life of a Bitcoin miner, and how do they contribute to the functioning of the Bitcoin network?
   How to answer

   • Describe miner routines: hardware operation, pool participation, validation
   • List challenges: energy cost, difficulty, hardware obsolescence, competition
   • Explain block creation, reward and transaction confirmation
   • Link to network security and decentralization
8. 7 Marks
   bWhat are the design considerations for implementing a permissioned blockchain?
   How to answer

   • Define permissioned blockchain vs permissionless
   • Discuss identity, access control and governance
   • Discuss consensus choice, privacy, performance and scalability
   • Discuss interoperability and compliance considerations
9. 7 Marks
   aExplain the Paxos algorithm and its role in achieving distributed consensus.
   How to answer

   • Define Paxos purpose for distributed consensus
   • Explain roles: proposer, acceptor, learner
   • Explain prepare/promise and accept phases
   • Explain safety, liveness and limitations
10. 7 Marks
    bWhat is the Byzantine General Problem, and how does it relate to distributed consensus?
    How to answer

    • Define Byzantine General Problem with loyal/traitor generals
    • Explain need for agreement despite faulty nodes
    • Relate to distributed consensus and BFT requirements
    • Give examples of BFT protocols
11. 7 Marks
    aHow does the Lamport-Shostak-Pease algorithm handle Byzantine faults in a distributed system?
    How to answer

    • State oral messages algorithm OM(m) recursive structure
    • Explain 3m+1 nodes requirement to tolerate m traitors
    • Explain majority voting and message relay steps
    • Mention handling of Byzantine faults and complexity
12. 7 Marks
    bWhat are the key components of the KYC process and why is it important for financial institutions?
    How to answer

    • Define KYC and regulatory purpose
    • List components: identity verification, address proof, risk assessment, monitoring
    • Explain importance for AML, fraud prevention, compliance
    • Mention blockchain for e-KYC
13. 7 Marks
    aWhat potential impact does blockchain technology have on international trade and global supply chains?
    How to answer

    • Outline trade pain points: paperwork, delays, fraud
    • Explain transparency, traceability and smart-contract automation
    • Explain impact on financing, customs and provenance
    • Mention challenges to adoption
14. 7 Marks
    bHow does Hyperledger Fabric achieve modularity and scalability in its architecture?
    How to answer

    • Define Fabric modular components: MSP, ordering, peers, chaincode
    • Explain execute-order-validate and channels
    • Explain pluggable consensus and endorsement policies
    • Explain how modularity enables scalability
15. 14 Marks
    Write a short notes on :-

    1. a)Supply Chain Financing
    2. b)Ripple and Corda
    How to answer

    • Define supply chain financing and blockchain benefits
    • Explain Ripple: consensus, XRP, cross-border payments
    • Explain Corda: permissioned, notary, financial contracts
    • Compare use cases and features