(SEM VII) THEORY EXAMINATION 2024-25 BLOCKCHAIN ARCHITECTURE DESIGN

SECTION A (2 × 10 = 20 Marks)

Attempt all questions in brief

a) Define cryptographic hashing.

Cryptographic hashing is a process that converts input data of any size into a fixed-length string using a hash function, ensuring data integrity, immutability, and security. Even a small input change produces a completely different hash.

b) Differentiate between hashchains and blockchains.

Hashchain: A sequence of hashes where each hash depends on the previous one. Used mainly for data integrity.

Blockchain: A distributed ledger where blocks contain transactions, linked via hashes, validated by consensus mechanisms.

c) Design goals of consensus protocols in permissioned blockchains.

Fault tolerance                                                   High throughput

Low latency                                                        Security against malicious nodes

Deterministic finality

d) Permissioned vs permissionless consensus mechanisms.

Permissioned: Known validators, uses PBFT, Raft → fast & efficient

Permissionless: Open participation, uses PoW/PoS → slower but decentralized

e) Steps in designing and implementing chaincode in Hyperledger Fabric.

Define business logic                                        Write chaincode (Go/Java/Node.js)

Package and install                                           Define endorsement policy

Deploy on channel                                            Invoke and test transactions

f) Role of endorsement policy in transaction validity.

It specifies which peers must approve a transaction. A transaction is valid only if endorsements match the policy before ordering and committing.

g) Use of blockchain in insurance industry.      Fraud reduction

Smart contracts for claims                                Transparent policy management

Faster claim settlement

h) Blockchain in KYC efficiency and security.

Blockchain enables single-time verification, immutable identity records, secure data sharing, and reduces duplication and fraud.

i) Benefits for intergovernmental record-keeping.

Transparency                                                     Tamper-proof records

Faster verification                                              Reduced corruption

Improved trust between agencies

j) Security vulnerabilities in blockchain-based digital identity systems.

Private key loss                                                 Smart contract bugs

Sybil attacks                                                      Poor off-chain data security

Centralized identity issuers

SECTION B (10 × 3 = 30 Marks)

Attempt any three

a) Distributed ledger vs centralized database

Centralized databases rely on a single authority, making them vulnerable to failure and manipulation. Distributed ledgers replicate data across nodes, ensuring integrity, transparency, and availability.
Example: Banking server vs blockchain ledger.

b) Proof of Elapsed Time (PoET) vs PoW

PoET uses trusted execution environments to randomly assign wait times, consuming low energy.
PoW requires heavy computation, high energy, and slower finality.

c) Consensus decomposition in Hyperledger Fabric

Fabric separates:                                               Transaction execution

Ordering                                                           Validation
This modular design improves scalability, flexibility, and performance.

d) Blockchain in financial settlements

It enables real-time settlement, removes intermediaries, reduces counterparty risk, and automates reconciliation using smart contracts.

e) Quantum computing impact on blockchain cryptography

Quantum computers can break RSA and ECC. Governments need quantum-resistant algorithms like lattice-based cryptography to secure future blockchains.

SECTION C (10 × 5 = 50 Marks)

Attempt one from each question

Q3(a) Public vs Private Blockchains

Q4(a) Scalability limitations & solutions

Limitations:                                                              Low TPS

High latency                                                              Network congestion

Solutions:                                                                 Sharding

Layer-2 solutions                                                       Sidechains

Improved consensus algorithms

Q5(a) Security features of Hyperledger Fabric

Permissioned access                                                  Channel-based privacy

Endorsement policies                                                MSP-based identity management

Immutable ledger ensures integrity

Q6(b) Traditional vs blockchain supply chain

Blockchain benefits:                                               Transparency

Traceability                                                                Fraud reduction

Limitations:                                                             Integration cost

Scalability issues                                                       Regulatory uncertainty

Q7(b) Blockchain-based digital identity systems

Blockchain provides tamper-proof, user-controlled identities, eliminates duplication, improves trust, and is superior to centralized identity systems vulnerable to breaches.