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TOKENS are an integral part of the blockchain NETWORK and are USED in multiple ways to represent ownership, investment, and incentivize growth. Besides this, tokens also have a variety of direct and INDIRECT FUNCTIONAL capabilities.

Secret SHARING is a method used by the Blockchain to protect DATA. In this, instead of sharing INFORMATION DIRECTLY to the receiver, the user sends parts of the information to multiple systems with the receiver as the destination.

Blind Signature is based on a public KEY digital signature scheme like RSA. In Blockchain, it is used to get the message signed by the signer without actually REVEALING any information of the message. This is achieved by disguising the message before signing it.

In a Blockchain, transaction data is stored in the form of records in ‘Digital BLOCKS”. Each block is CONNECTED to all the blocks before and after it. These are secured using cryptography. Now, because Blockchain is decentralized and comprises a peer-to-peer NETWORK, data cannot be altered from a single point/computer.

DOUBLE Spending is a PHENOMENON that OCCURS when a Blockchain NETWORK is DISRUPTED and cryptocurrencies are stolen. This is a possibility in a Blockchain system.

Blockchain USES encryption(cryptography) to protect the identities of any NETWORK, ensure secure transactions, and protect valuable information. A combination of public and PRIVATE keys enables the encryption of the information.

scriptPubKey is technically a locking script which is placed on the output of any Bitcoin-based transactions REQUIRING special CONDITIONS to be met for the user to spend his/her Bitcoins.

A trapdoor FUNCTION is one that is easy to COMPUTE within one direction. It is very tough to compute the other way unless you have special information/privileges. It is used in Blockchain DEVELOPMENT for public-key encryption, representing ideas of addresses and private KEYS.

Currently, there are FOUR TYPES of Blockchain:

• Public Blockchain
• Private Blockchain
• Consortium Blockchain
• Hybrid Blockchain

NOTE: If you want to read more about Blockchain then you can visit here.

Blockchain is secure as all the transactions are secured using cryptography. Each transaction is signed using a private key which can be further divided into public keys. If the transaction data has any changes, the SIGNATURE becomes INVALID and the whole block shall be ignored.

Here are the benefits of using Blockchain Technology:

• It allows users verification WITHOUT any dependency on third-party software.
• The data structure used in Blockchain is append-only. Hence it cannot be edited or ALTERED with.
• It uses cryptography technology to secure data ledgers.

Note: Although Blockchain is being used by only 0.5% of the world’s population, TECH giants like IBM and Microsoft are investing a lot of resources and manpower in Blockchain-related projects. Read our COMPREHENSIVE collection of blockchain interview questions to know more.

A Merkle TREE is also known as BINARY Hash Tree. It is a DATA STRUCTURE used in Blockchain and cryptocurrencies to encode the Blockchain data more efficiently and SECURELY.

The blockchain is a decentralized and distributed DATABASE for unaltered records. Here are some of the reasons why it is trusted:

• COMPATIBLE with almost all business applications as it is open-source.
• Extra FOCUS on security as all transactions happen online.
• Enhanced, traceability, transparency, efficiency, and speed.

Note: Due to its unprecedented standards of security, Microsoft has been working on a Blockchain project to create Digital IDs for more than 1 billion people who currently have no ID to prove their identity. Our Blockchain interview questions shall answer your queries REGARDING the security methods used by Blockchain.