1.What is a sybil attack in blockchain?

ans)A Sybil attack is one where an attacker pretends to be so many people at the same time. It is one of the
biggest issues when connecting to a P2P network. It manipulates the network and controls the whole network by
creating multiple fake identities.
Sybil Attack is a type of attack seen in peer-to-peer networks in which a node in the network operates multiple
identities actively at the same time and undermines the authority/power in reputation systems. The main aim of this
attack is to gain the majority of influence in the network to carry out illegal(with respect to rules and laws set in the
network) actions in the system. A single entity(a computer) has the capability to create and operate multiple
identities(user accounts, IP address based accounts). To outside observers, these multiple fake identities appear to
be real unique identities.

2.What is bitcoin mining?

ans)Bitcoin mining is the process of creating new bitcoin by solving a computational puzzle. Bitcoin mining is
necessary to maintain the ledger of transactions upon which Bitcoin is based. Miners have become very
sophisticated over the past several years, using complex machinery to speed up mining operations.
● Bitcoin mining is designed to be similar to gold mining in many ways. This “digital mining” is a computer
process that creates new Bitcoin, in addition to tracking Bitcoin transactions and ownership. Bitcoin mining and gold
mining are both energy intensive, and both have the potential to generate a handsome monetary reward.
● Bitcoin mining is a process of verifying and recording new Bitcoin transactions.
● Bitcoin miners are paid with transaction fees and newly created digital currency.
● Many Bitcoin miners use specialized mining hardware and participate in mining po
● Cryptocurrency mining can be highly energy intensive, requiring access to a low-cost energy source to be
profitable.

3. Define Ethereum block header fields nonce, state root, gas limit, gas used and the difficulty?
ans)
→ Every block header contains the roots of those three trees. The global state tree contains a key-value pair for
every account in the Ethereum network and is updated by every transaction.
→nonce - a counter that indicates the number of transactions sent by the account (this is different from the nonce
that PoW needs miners to find to solve the mining puzzle).
→gasLimit - the maximum amount of gas offered for transaction execution.
→state root - Ethereum, unlike Bitcoin, has the property that every block contains something called the “state root”:
the root hash of a specialized kind of Merkle tree which stores the entire state of the system: all account balances,
contract storage, contract code and account nonces are inside.
→ gas used - Ethereum network transaction fees, not the gasoline for your car. Gas fees are payments made by
users to compensate for the computing energy required to process and validate transactions on the Ethereum
blockchain.
→ difficulty- Ethereum difficulty (or network difficulty) is a key value for every cryptocurrency. Ethereum Network
difficulty is the difficulty of a problem that miners must solve to find a block. The more miners are mining Ethereum
the more difficult it is to find the block to be rewarded.

4. Compare the working of bitcoin blockchain with Ethereum blockchain.

ans)
5. What is a domain name service on a block chain network?
ans)Domain name service (DNS) is the application service that translates the IP address into a more recognized
and memorable name. Whenever using the Internet, there are millions of DNS servers that translate any uniform
resource locator (URL) typed into the location field of any Web browser into a specific IP address.
The DNS, the Domain Name System, is a service at the heart of how the Internet operates. It functions as a public
directory that associates domain names with resources on the Internet, such as IP addresses. When a user enters
an address in his browser, a DNS server translates this humanly understandable address into an IP address that is
understandable by computers and networks. This is DNS resolution.

6. Explain proof of work consensus algorithm.

ans)Proof of work (PoW) is a decentralized consensus mechanism that requires members of a network to expend
effort solving an arbitrary mathematical puzzle to prevent anybody from gaming the system.
● Proof of work is used widely in cryptocurrency mining, for validating transactions and mining new tokens.
● Due to proof of work, Bitcoin and other cryptocurrency transactions can be processed peer-to-peer in a
secure manner without the need for a trusted third party.
● Proof of work at scale requires huge amounts of energy, which only increases as more miners join the
network.
● Proof of Stake (POS) was one of several novel consensus mechanisms created as an alternative to proof of
work.

7. What is Black market in crypto currency exchange?

ans)A black market is any market where the exchange of goods and services takes place in order to facilitate
the transaction of illegal goods or to avoid government oversight and taxes, or both.
—>Bitcoins are an online currency with no ties to a government or central bank. Since their inception in 2009, it has
become a medium for all kinds of black market activities online. Here's what you need to know about the
not-so-legal side of Bitcoins.
—>A black market arises when exchanges for foreign currency take place at an unofficial (or illegal) exchange rate.
If a central bank does not intervene regularly in the Forex market, a black market will very likely arise and the
central bank will lose control of the exchange rate.

8. What is namecoin?
ans)Namecoin is a cryptocurrency originally forked from Bitcoin software. A fork is simply a change in a
blockchain's protocol. Namecoin is based on the code of Bitcoin with additional functionality built on top of it.
Namecoin uses the same proof-of-work (PoW) consensus algorithm as Bitcoin.
Vincent Durham (vinced) - Vincent (a pseudonym) was the creator of Namecoin, forking Bitcoin's code to create
the first solution to Zooko's Triangle.
Namecoin
Namecoin is a cryptocurrency originally forked from Bitcoin software. A fork is simply a change in a blockchain’s
protocol.
—>Namecoin is based on the code of Bitcoin with additional functionality built on top of it.
—>Namecoin’s goal is to provide a decentralized version of the Domain Name System (DNS), the names in the
database being domain names and the values being IP addresses.
—>Namecoin uses the same proof-of-work (PoW) consensus algorithm as Bitcoin.
—>The two currencies are nearly identical. Namecoin was developed as the basis for a decentralized domain name
system (DNS).
—>DNS translates human-readable domain names to machine-readable IP addresses (for example, 000.0.0.00).
—>There are three types of Namecoin transactions : name_new – Registration cost 0.01 NMC.
—>This constitutes a fixed cost pre-order of a domain. name_firstupdate – Registration cost 0 NMC. —>Registers
a domain making it publically visible, subject to variable costs. name_update – Registration cost 0 NMC.
—>This is used for updating, renewing or transferring a domain

9. Explain about sidechain?

ans)Sidechain is an effect that you have on one sound that is triggered by the level of another sound. The classic
example is when you have a compressor on a bass track and you set it so it ducks the level of the bass whenever a
kick drum hits
➢ A Bitcoin sidechain is an independent blockchain that can securely transfer bitcoins internally and from/to
the Bitcoin network without supporting a money token different from Bitcoin. This definition has a technical part, but
also refers to shared incentives.

Laq
1. List and describe differences between proof-of-work and proof-of-stake consensus.
2. Examine and interpret the Ethereum transaction fields.
3. Elucidate Ethereum GHOST protocol.
ans)
—>GHOST protocol The "Greedy Heaviest Observed Subtree" (GHOST) protocol is an innovation first introduced
by Yonatan Sompolinsky and Aviv Zohar in December 2013.
—>The motivation behind GHOST is that blockchains with fast confirmation times currently suffer from reduced
security due to a high stale rate - because blocks take a certain time to propagate through the network .
—>If miner A mines a block and then miner B happens to mine another block before miner A's block propagates to
B, miner B's block will end up wasted and will not contribute to network security.
—>Furthermore, there is a centralization issue: if miner A is a mining pool with 30% hash power and B has 10%
hash power, A will have a risk of producing a stale block 70% of the time (since the other 30% of the time A
produced the last block and so will get mining data immediately) whereas B will have a risk of producing a stale
block 90% of the time.
—>Thus, if the block interval is short enough for the stale rate to be high, A will be substantially more efficient
simply by virtue of its size.
—>With these two effects combined, blockchains which produce blocks quickly are very likely to lead to one mining
pool having a large enough percentage of the network hash power to have de facto control over the mining
process.
—>Ethereum implements a simplified version of GHOST which only goes down seven levels. Specifically, it is
defined as follows:
—>A block must specify a parent, and it must specify 0 or more uncles An uncle included in block B must have the
following properties:
—>It must be a direct child of the k-th generation ancestor of B, where 2 <= k <= 7. It cannot be an ancestor of B.
An uncle must be a valid block header, but does not need to be a previously verified or even valid block. An uncle
must be different from all uncles included in previous blocks and all other uncles included in the same block
(non-double-inclusion).
—>For every uncle U in block B, the miner of B gets an additional 3.125% added to its coinbase reward and the
miner of U gets 93.75% of a standard coinbase reward.
—>This limited version of GHOST, with uncles includable only up to 7 generations, was used for two reasons.
—>First, unlimited GHOST would include too many complications into the calculation of which uncles for a given
block are valid.
—>Second, unlimited GHOST with compensation as used in Ethereum removes the incentive or a miner to mine on
the main chain and not the chain of a public attacker.

4. Examine the legal aspects of crypto currency exchange and black market.
ans)What are legal aspects of cryptocurrency exchange?
In India, the apex financial authority i.e., the Reserve Bank of India (“RBI”), recognised cryptocurrency, more
specifically defined as a form of digital/ virtual currency created through a series of written computer codes based
on cryptography /encryption and is thus free of any central issuing authority per se.
The Legal Aspects Of Cryptocurrency In India
With the unique developments and advancements in the technology sector in India, especially during the
challenges posed by the rapid spread of COVID-19, the fintech sector has shown promising results. There has
been a growth, fuelled largely by curiosity and popularity, amongst the citizens of India in cryptocurrency such as
Bitcoin, Ripple, Dogecoin, etc., based on which a large number of people have started investing a noticeable part of
their time and money in these virtual currencies.

In India, the apex financial authority i.e., the Reserve Bank of India (“RBI”), recognised cryptocurrency, more
specifically defined as a form of digital/ virtual currency created through a series of written computer codes based
on cryptography /encryption and is thus free of any central issuing authority per se. Cryptocurrency is assisted
through blockchain technology that establishes a person-to-person issuance system that utilizes private and public
keys allowing authentication and encryption for secure and safe transactions.

Based on the inference that can be drawn from the aforementioned facts and current scenario around the world
dealing with matters of cryptocurrencies, it is noticeable that there is a complete lack of clarity concerning
cryptocurrency regulation in India.
Well-structured, clear regulations dealing with crypto trading exchanges, blockchain technology, investors, and the
people employed in such sectors should be made the priority given that the world of cryptocurrency is here to stay
and demands more attention.
It is fascinating to note that in the Draft National Strategy on Blockchain, 2021, published by the Ministry of
Electronics and Information Technology highlighted the benefits of cryptocurrency. Therefore, banning a virtual
currency that has created an impact in many countries, will not be the ideal thing to do for the development of our
nation.
The government needs to take an effective step towards the positive regulation and enforcement of cryptocurrency
as a way forward to earn the confidence of investors and the general public in developing the nation. It was
announced by the Union Finance Minister Nirmala Sitharam on 16th March 2021 that there shall not be a complete
ban on cryptocurrency – “we will allow a certain amount of window for people to experiment on blockchain, bitcoins
and cryptocurrency.”.
Though It would be wiser to pause, sit back and wait for the Government to formulate clear regulations concerning
cryptocurrencies before running in the gray.

5. Explain about vulnerability and attacks on blockchain networks.

ans)ATTACKS
—>1. 51% Attacks
—>2. Sybil Attacks
—>3. Routing Attacks
—>4. Phishing Attacks
Blockchain Vulnerabilities Consensus Mechanism Manipulation:
—>Blockchain consensus mechanisms such as proof-of-work or proof-of stake have been subject to attacks.
—>The 51% attack is a well-known attack on proof-of-work blockchains whereby an attacker who controls the
majority of the network's computing resources is able to discard blocks mined by anyone else, giving priority to his
own blocks.
—>Underlying Cryptosystem Vulnerabilities: Improper Blockchain Magic Validation.
—>Some blockchains have multiple forks, such as a main network and one or more test networks.
—>A blockchain's magic value is used to uniquely identify a chain, thus binding transactions to a specific chain.
—>Node software must check whether received transactions have the expected magic value, attributable to the
current chain.
—>If there is no such check, then an attacker can replay a transaction originally performed on another chain, thus
creating transactions meant for another chain.
—>Improper Transaction Nonce Validation. Each transaction must be unique within a given blockchain.
—>A transaction nonce is used by node implementations to enforce uniqueness.
—>Poor node implementations might allow transactions to be replayed on the same chain.
—>Such a vulnerable implementation may be exploited by an attacker that receives a transaction of amount NN,
which can be replayed over and over until the source wallet does not have enough funds to perform the transaction
anymore.
—>A mitigation is to verify the uniqueness of all received transactions.
—>Denial of Service. Proof-of-work blockchains with a block target that automatically adjusts, may be vulnerable to
a denial of service attack.
—>Indeed, if no minimum target is defined, an uncaught floating-point underflow may occur and the block target
may be rounded to zero, thus making new blocks impossible to mine and rendering the blockchain useless. Some
DApps may become so popular that congestion may happen on the underlying blockchain.
—>One way to avoid network congestion is to use a smart contract platform that features high throughput.
—>Public-key and Address Mismatch. A blockchain wallet's public key can usually be derived from the wallet's
address. However, some implementations truncate the public key to derive the address.
—>If addresses are not bound to a specific key pair, then this can become a problem, because multiple key pairs
exist with the same wallet address.
—>In this case, it may be possible to brute force and find another key pair that controls a target wallet in a
reasonable amount of time depending on the address length.
—>To prevent such attacks, one should ensure that each unique wallet address is bound to a single key-pair.

6. How IOT and Blockchain may streamline transactions to digital healthcare?

ans)How IoT and Blockchain may streamline transition to digital healthcare
—>There is a vision of new historical transformation coming in healthcare
—>Driving it are the world’s biggest technology companies, which have already started to introduce us to the digital
future of medical services.
—>That should mean better diagnoses, empowered patients, lower costs, and shorter R&D cycles for life-saving
medication.
—>By changing the way that healthcare providers can access, use and share medical data, technology is poised to
fuel enormous synergy between every actor in the global healthcare ecosystem.
—>Electronic medical records were the first step towards data-driven healthcare but now the digital disruption takes
a truly audacious aim – collecting all possibly useful health data on the broadest scale and making it accessible for
immediate and long-term use by patients, doctors, and scientists.
—>The first part has been effectively tackled with the help of the IoT, an umbrella technology for connected medical
devices, wearables, and body sensors.
—>What still remains obscure is how to bridge separate data silos of healthcare organizations and enable secure
access to their medical data. That’s where blockchain may play its brightest role so far.
—>From doctors to data with IoT
—>A major benefit of blockchain is that it can help healthcare organizations bridge traditional data silos and enable
secure sharing of sensitive medical data.
—>Not only will it improve transparency between patient and doctor, but also ensure efficient collaboration between
separate healthcare providers and research organizations.
—>What makes blockchain stand out as a technology for secure, flexible data sharing is a combination of three
factors.
—>First, blockchain has an immutable “ledger” that you can see, verify, and control. Every record in this ledger is
guaranteed to stay unchanged once it was put into it.
—>It also ensures every transaction is verified according to the predefined rules. Second, blockchain is built as a
distributed technology, which is simultaneously operated by multiple computers.
—>This means that blockchain has no single point of failure from which records or digital assets can be hacked or
compromised.
—>Third, blockchain supports data exchange logic and agreement rules, however complex, with a flexible
mechanism of smart contracts.
—>For example, a smart contract can be used for identity management and specify different permissions for
different data from the patient’s EMR stored on blockchain. Thus, doctors will be able to view what is allowed
specifically for them and in the same way any other individual or organization.
—>There are a number of promising blockchain projects underway in healthcare, which target medical records,
pharmaceutical supply chain, medicine prescriptions, payment distribution, and clinical pathways.