Blockchain Fundamentals Flashcards

In the context of blockchain auditing, what is a '51% attack'?

Answer: An attack where an entity controls the majority of hashing power to rewrite recent history

Controlling over 50% of a Proof-of-Work network's hash rate allows an attacker to out-mine honest nodes, enabling double-spends by replacing recently confirmed transactions.

What is the function of the 'nonce' field in a Bitcoin block header?

Answer: It is the value miners iterate to find a hash below the difficulty target

Miners increment the nonce repeatedly until the resulting block header hash meets the network's difficulty requirement (starts with enough leading zeros).

How does Proof-of-Stake consensus differ from Proof-of-Work in terms of Sybil resistance?

Answer: PoS relies on economic stake locked as collateral; PoW relies on computational cost

PoS requires validators to lock up cryptocurrency as collateral, making Sybil attacks costly via capital commitment, while PoW makes them costly via electricity and hardware.

An auditor reviewing a permissioned blockchain would focus on which control that is largely absent in permissionless chains?

Answer: Access control lists governing who may join and transact

Permissioned blockchains require identity vetting and formal onboarding, making access controls a critical audit area unlike open permissionless networks where anyone can participate.

What is 'finality' in blockchain consensus, and why does it matter for auditors?

Answer: The point at which a transaction is considered irreversible, affecting settlement risk

Finality determines when an auditor can treat a transaction as settled and not subject to reversal, directly impacting how many confirmations are needed before recording assets or liabilities.

Which consensus mechanism is used by Hyperledger Fabric, and why is it relevant to enterprise blockchain audits?

Answer: Practical Byzantine Fault Tolerance (PBFT)-based ordering, providing immediate finality for enterprises

Hyperledger Fabric uses an ordering service with PBFT-derived consensus that provides deterministic, immediate transaction finality — critical for enterprise auditability and compliance.

What is a 'blockchain explorer' and how does it support cryptocurrency auditing?

Answer: A web-based tool for querying on-chain data including addresses, transactions, and block details

Blockchain explorers provide transparent, queryable access to on-chain records, enabling auditors to independently verify transaction histories, balances, and block confirmations.