Homework

1. Define Blockchain

Blockchain is a digital record book that is shared by many computers. Information is saved in groups called "blocks," and the blocks are linked together like a chain. Each block holds a special code (a hash) from the block before it, so the whole chain is connected. Blockchain has three key features:

• Immutability: Once data is saved in a block, it is very hard to change or delete it. If someone changes one block, the link to the next blocks breaks and everyone can see it.

• Decentralization: No single person, company, or government controls the blockchain. Many computers (called nodes) each keep a copy of the record.

• Consensus: Before a new block is added, the computers in the network must agree that it is correct. Methods such as Proof of Work and Proof of Stake are used to reach this agreement.

2. History Timeline

The table below shows the main milestones of blockchain technology, from the early ideas in the 1980s to Ethereum in 2015.

3. Blockchain vs. Traditional Databases

Blockchain and traditional databases both store information, but they work in different ways. Here are three main differences:

1. Control. A traditional database is controlled by one organization. For example, a bank controls its own customer database and decides who can use it. A blockchain like Bitcoin is shared by thousands of computers around the world, so nobody owns or controls it.

2. Changing data. In a traditional database, an administrator can add, edit, or delete records. In a blockchain, data can only be added, and old records cannot be changed easily. For example, if a Bitcoin payment is sent, it cannot be reversed or removed later.

3. Trust and transparency. With a traditional database, users must trust the company that owns it, and the data is usually private. With a public blockchain, anyone can check the records themselves. For example, anyone can look at Ethereum transactions on a website such as Etherscan.

1. Key components of blockchain

Blocks: Containers that hold a batch of validated transactions, a timestamp, and the hash of the previous block.
Chain: Each block stores the previous block's hash, linking them in order. Changing one block breaks every block after it, which makes the record tamper-evident.
Nodes: Computers that each keep a copy of the ledger. They validate transactions and blocks and relay them to other nodes.
Decentralization: No single authority controls the ledger. Nodes agree on its state through a consensus mechanism (e.g., Proof of Work or Proof of Stake), so there is no single point of failure.

2. Types of blockchains
Type Who can join Benefit Limitation
Public (Bitcoin, Ethereum) Anyone Highly transparent and censorship-resistant Slower, higher fees, limited privacy
Private (Hyperledger Fabric inside one company) One organization controls access Fast, with full control over privacy More centralized, so less trustless
Consortium (R3 Corda, bank or supply-chain groups) A group of pre-approved organizations Shared governance and good efficiency between partners Hard to coordinate, and partners can collude

3. Real-world applications
Supply chain (Walmart Food Trust, built with IBM): Suppliers record each step of a food product's journey on a shared ledger. When a contamination scare happens, Walmart can trace a product to its source in seconds instead of days, which makes recalls faster and more targeted.
Finance (cross-border payments, e.g., Ripple or JPMorgan's Kinexys): Blockchain-based settlement cuts out intermediary banks. Transfers that normally take days can settle in minutes at lower cost, with a transparent record.