1. It is a public ledger that everyone can inspect but which no single user controls.

2. The structure and design of the blockchain is such that all the data in it are about cryptocurrency only.

3. Applications that depend on the basic features of blockchain can be developed without anybody’s permission.

Which of the statements given above is/are correct?

(a) 1 only

(b) 1 and 2 only

(c) 2 only

(d) 1 and 3 only

Ans: d

Explanation:

Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.

An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding).  Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved.

Bitcoin is an unregulated, digital currency. Bitcoin uses blockchain technology as its transaction ledger.

Hence, statement 2 is incorrect.

Blockchain is ideal for delivering that information because it provides immediate, shared, and observable information that is stored on an immutable ledger that only permissioned network members can access. A blockchain network can track orders, payments, accounts, production and much more. And because members share a single view of the truth, you can see all details of a transaction end to end, giving you greater confidence, and new efficiencies and opportunities.

Key elements of a blockchain

Distributed ledger technology   All network participants have access to the distributed ledger and its immutable record of transactions. With this shared ledger, transactions are recorded only once, eliminating the duplication of effort that’s typical of traditional business networks.

Immutable records

No participant can change or tamper with a transaction after it’s been recorded to the shared ledger. If a transaction record includes an error, a new transaction must be added to reverse the error, and both transactions are then visible.

Smart contracts

To speed transactions, a set of rules that are called a smart contract is stored on the blockchain and run automatically. A smart contract defines conditions for corporate bond transfers, include terms for travel insurance to be paid and much more.

Hence, statement 1 is correct.

How blockchain works

• As each transaction occurs, it is recorded as a “block” of data
• Those transactions show the movement of an asset that can be tangible (a product) or intangible (intellectual).  
• The data block can record the information of your choice: who, what, when, where, how much. It can even record the condition, such as the temperature of a food shipment.
• Each block is connected to the ones before and after it
• These blocks form a chain of data as an asset moves from place to place or ownership changes hands. 
• The blocks confirm the exact time and sequence of transactions, and the blocks link securely together to prevent any block from being altered or a block being inserted between two existing blocks.
• Transactions are blocked together in an irreversible chain: a blockchain
• Each additional block strengthens the verification of the previous block and hence the entire blockchain. Rendering the blockchain tamper-evident, delivering the key strength of immutability. Removing the possibility of tampering by a malicious actor, and builds a ledger of transactions you and other network members can trust.

Benefits of blockchain

Greater trust

With blockchain, as a member of a members-only network, you can rest assured that you are receiving accurate and timely data. And that your confidential blockchain records are shared only with network members to whom you granted access.

Greater security

Consensus on data accuracy is required from all network members, and all validated transactions are immutable because they are recorded permanently. No one, not even a system administrator, can delete a transaction.

More efficiencies

With a distributed ledger that is shared among members of a network, time-wasting record reconciliations are eliminated. And to speed transactions, a set of rules that are called a smart contract can be stored on the blockchain and run automatically.

Many blockchains are entirely open source. This means that everyone can view its code. This gives auditors the ability to review. However, it also means there is no real authority on who controls the source code or how it is edited. Because of this, anyone can suggest changes or upgrades to the system.  

Hence, statement 3 is correct.

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