ITPEC FE Subject A October 2024 Question 53

A distributed ledger on a peer-to-peer network — a blockchain has no central server that holds the record.

Transactions are grouped into blocks, and each block stores the hash of the previous block, forming a chain. Copies of the ledger are shared among the nodes of a P2P network, which agree on new blocks through a consensus mechanism. Altering a past block changes its hash and breaks every later link, so tampering is evident without a trusted central administrator.

Answer (c)

Why not others:

• •(a) — a centralised ledger on a server is a conventional database, the model a blockchain replaces
• •(b) — a client-server network depends on a central server, whereas blockchain nodes are equal peers
• •(d) — cryptocurrencies such as Bitcoin are applications built on a blockchain, not the blockchain itself

Key rule: Blockchain = shared ledger + P2P network + hash chain; cryptocurrency is one use of it, alongside traceability and smart contracts.

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