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Why are Decentralization and Distributed Ledgers Fundamental to Blockchain’s Trustworthiness?
Understand the core principles of blockchain technology and how decentralization and distributed ledger systems ensure its integrity. Learn why these features are fundamental to creating a tamper-proof and trustworthy network that eliminates single points of failure.
Question
Explain the core principles of blockchain technology. Which principle is fundamental to ensuring that blockchain remains tamper-proof and trustworthy?
A. Single point of data verification.
B. Decentralization and distributed ledger systems.
C. Proprietary data storage methods.
D. Centralized control and management.
Answer
B. Decentralization and distributed ledger systems.
Explanation
Decentralization and distributed ledger systems ensure data integrity and trustworthiness in blockchain technology. The fundamental principles that make a blockchain tamper-proof and trustworthy are decentralization and its underlying distributed ledger system.
Decentralization
In a decentralized network, there is no central authority or single point of control. Instead, the data and the power to validate transactions are spread across many different computers (nodes). This design eliminates the risk of a single point of failure; if one node goes down or is compromised, the network continues to operate securely. To alter the blockchain, a malicious actor would need to control a majority of the network’s computing power (a 51% attack), which is practically impossible on a large public blockchain.
Distributed Ledger
A distributed ledger is a database of transactions that is shared and synchronized among all participants in the network. Every node holds a full copy of the ledger. When a new transaction occurs, it is broadcast to all nodes, and through a consensus mechanism, they all agree on the validity of the transaction before it is permanently added to the chain. Once a transaction is recorded, it is cryptographically linked to the previous transaction, creating an immutable chain. Any attempt to alter a previous transaction would change its cryptographic hash, breaking the chain and being immediately rejected by the rest of the network.
Together, these two principles ensure that no single entity can alter the historical record, making the blockchain a transparent, secure, and trustworthy system.
Analysis of Incorrect Options
A. Single point of data verification: This is the opposite of how blockchain works. A single point of verification would create a centralized system that is vulnerable to attack and manipulation.
C. Proprietary data storage methods: While blockchain uses specific data structures, the methods themselves are not “proprietary.” The principles of hashing, encryption, and distributed ledgers are well-understood and often open-source concepts. The security comes from the decentralized application of these methods, not from keeping them secret.
D. Centralized control and management: This describes a traditional database, not a blockchain. Centralized control is the very weakness that blockchain technology was designed to overcome. It introduces the need to trust a single entity and creates a single point of failure.
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