Blockchain qb solution

(1) Define blockchain and list its features.

(2) Define DLT and list its benefits.

(3) Explain structure of block.

(4) Define Bitcoin and explain Bitcoin transactions.

(5) Define keys, address and wallets in Bitcoin.
 (6) What is Ethereum? Discuss version 1.0 and 2.0 of Ethereum.

Ethereum 1.0

• Consensus Mechanism: Used Proof of Work (PoW), where miners solve complex puzzles to
validate transactions and secure the network.

• Transaction Capacity: Limited to ~15 transactions per second (TPS), leading to congestion
and high fees during peak usage.

• Energy Consumption: Required significant electricity for mining, raising environmental

concerns.

• Structure: Single-chain blockchain where all nodes process transactions sequentially.

Ethereum 2.0 (Post-"Merge" Upgrade)

• Consensus Mechanism: Transitioned to Proof of Stake (PoS) with validators staking ETH to
secure the network, reducing energy use by ~99.95%.

• Scalability Improvements:

• Shard Chains: 64 parallel chains enabling simultaneous transaction processing,

boosting throughput to ~100,000 TPS.

• The Merge (2022): Integrated Ethereum 1.0’s execution layer with the PoS Beacon
Chain, eliminating mining.

• Enhanced Security: PoS reduces 51% attack risks, and validators face penalties ("slashing")
for malicious actions.

(7) What is Smart contract?

Smart contracts are self-executing digital agreements encoded on a blockchain. They automatically
enforce predefined terms and conditions without intermediaries, streamlining trustless transactions.
Here’s a concise overview:

Core Features

• Automation: Execute actions (e.g., releasing funds, updating records) when

"if/when...then..." conditions are met via code.

• Decentralization: Operate on blockchain networks, eliminating third parties like lawyers or

banks.
• Immutability: Once deployed, contract terms cannot be altered, ensuring tamper-proof
execution.

• Transparency: All parties share identical contract data, stored on a distributed ledger.

(1) Explain with neat diagram Merkle Tree working model.

 (2) Compare different types of Blockchain.

(3) Explain the working of UTXO with an example.

https://www.investopedia.com/terms/u/utxo.asp

(4) Explain in detail Pay-to-Script and Multisig Addresses.

 (5) Differentiate between hard fork and soft fork in Blockchain.

(6) Discuss in detail Ethereum wallets working with Metamask.

MetaMask is a widely used cryptocurrency wallet that serves as a gateway to the Ethereum
blockchain and decentralized applications (dApps). It operates as a browser extension and mobile
app, allowing users to manage their Ethereum assets and interact with various blockchain services.
Here’s a detailed discussion on how Ethereum wallets work with MetaMask.

Overview of MetaMask

- Functionality: MetaMask allows users to store, send, and receive Ethereum and ERC-20 tokens. It
also enables interaction with dApps, making it a crucial tool for engaging with the decentralized
finance (DeFi) ecosystem, non-fungible tokens (NFTs), and other blockchain services.

- Accessibility: Available as a browser extension for Chrome, Firefox, Brave, and Edge, as well as a
mobile application for iOS and Android, MetaMask provides users with easy access to their wallets
from various devices.

Setting Up MetaMask
1. Installation:

- Users visit the official MetaMask website and download the browser extension or mobile app.

- After installation, users create a new wallet by setting a password and receiving a Secret Backup
Phrase (seed phrase). This phrase is critical for wallet recovery.

2. Wallet Creation:

- Upon creating a wallet, users can manage multiple Ethereum addresses within the same
MetaMask account.

- The wallet securely stores private keys locally in the user's browser or device, enhancing security
against hacks.

3. Backup and Security:

- Users are advised to back up their Secret Backup Phrase in multiple secure locations. Losing this
phrase means losing access to the wallet and its assets.

Interacting with dApps

- Seamless Integration: MetaMask acts as a bridge between traditional web browsers and blockchain
applications. Users can connect their wallets to various dApps with just a few clicks.

- Transaction Management: When interacting with dApps, users can easily send transactions directly
from MetaMask. The wallet prompts for transaction confirmations, ensuring user control over fund
transfers.

- Token Management: Users can manage ERC-20 tokens and NFTs directly within their MetaMask
wallet. The interface allows viewing balances, sending tokens, and interacting with smart contracts.

Features of MetaMask

- Swapping Tokens: MetaMask includes built-in functionality to swap tokens directly within the wallet
interface without needing external exchanges.

- Cross-Chain Compatibility: Originally focused on Ethereum, MetaMask has expanded support to

other blockchains like Binance Smart Chain (BSC), allowing users to switch between networks easily.

- Integration with Hardware Wallets: For enhanced security, users can connect hardware wallets
(e.g., Ledger or Trezor) to their MetaMask accounts, allowing them to manage assets while keeping
private keys offline.
Conclusion

MetaMask serves as an essential tool for anyone looking to engage with the Ethereum ecosystem. Its
user-friendly interface simplifies complex interactions with blockchain technology while providing
robust security features. By facilitating easy access to dApps and enabling efficient asset
management, MetaMask plays a pivotal role in the growing decentralized web landscape.

Citations:

[1] https://tatum.io/blog/simplify-metamask-integration

[2] https://codehs.com/tutorial/jkeesh/how-to-set-up-an-ethereum-wallet-on-metamask

[3] https://github.com/BtcOness/Metamask-Wallet-Connect-Integration-Sdk-Web3-Ethereum

[4] https://www.gemini.com/cryptopedia/what-is-metamask-how-to-use-metamask-extension

[5] https://sdlccorp.com/post/what-is-metamask-and-its-benefits/

[6] https://www.nerdwallet.com/article/investing/metamask-review

[7] https://metamask.io/buy-crypto/

[8] https://support.metamask.io/privacy-and-security/hardware-wallet-hub/

(7) Explain the lifecycle of Smart Contract.

https://drive.google.com/file/d/1FUg1W0J5C34D0VVhzBc_P45EMZL_c3QZ/view?usp=sharing