Brief Notes of Syllabus Content

Module 1: Centralized versus Distributed Systems 4L

Client-Server Model, Distributed System, P2P Network Model, Distributed
Database, Two General
Problem in distributed database, Byzantine General problem and Fault
Tolerance, Hadoop
Distributed File System, Distributed Hash Table, ASIC resistance, Turing
Complete.

I. 1. Centralized vs. Distributed Systems

 Centralized System: A single entity (server or database) controls the

entire system. Example: Traditional client-server models.
 Distributed System: Multiple interconnected nodes work together to
achieve a common goal, enhancing scalability and fault tolerance.
Example: Blockchain networks, cloud computing.

II. 2. Client-Server Model

 A centralized architecture where clients request services from a server.

 The server handles all processing and responses.
 Example: Web applications where a browser (client) interacts with a web
server.

III. 3. Distributed System

 A network of independent computers working together as a unified

system.
 Characteristics: Scalability, fault tolerance, consistency challenges.
 Example: Cloud computing, microservices architecture.

IV. 4. P2P (Peer-to-Peer) Network Model

 Decentralized architecture where each node acts as both client and

server.
 No central authority; nodes share resources directly.
 Examples: BitTorrent, blockchain networks (Bitcoin, Ethereum).

V. 5. Distributed Database

 A database spread across multiple nodes/servers rather than a single

location.
  Types: Homogeneous (same DBMS across nodes) vs. Heterogeneous
(different DBMSs interacting).
 Challenges: Data consistency, replication, partitioning.

VI. 6. Two Generals Problem in Distributed Databases

 A classic problem illustrating the difficulty of achieving reliable

communication in unreliable networks.
 Two generals must coordinate an attack, but message delivery is
uncertain (similar to achieving consistency in distributed databases).
 No guaranteed solution in an asynchronous system.

VII. 7. Byzantine Generals Problem & Fault Tolerance

 A scenario where some nodes may act maliciously or fail but the system
must still reach consensus.
 Byzantine Fault Tolerance (BFT) ensures the system can function
correctly even with some faulty nodes.
 Used in blockchain consensus mechanisms (e.g., Practical Byzantine
Fault Tolerance - PBFT).

VIII. 8. Hadoop Distributed File System (HDFS)

 A distributed file system used for handling large-scale data processing.

 Uses NameNodes (metadata management) and DataNodes (storage
nodes).
 Replication ensures fault tolerance.

IX. 9. Distributed Hash Table (DHT)

 A key-value storage system used in P2P networks to distribute data

efficiently.
 Example: Chord, Kademlia (used in BitTorrent and blockchain
networks).

X. 10. ASIC Resistance

 ASIC (Application-Specific Integrated Circuit) are specialized chips

for high-efficiency computation (e.g., Bitcoin mining).
 ASIC-resistant algorithms are designed to prevent mining centralization
by ensuring that consumer-grade hardware (CPUs/GPUs) remains
competitive.
 Example: Ethereum’s Ethash algorithm (before moving to Proof-of-
Stake).
XI. 11. Turing Completeness

 A system is Turing Complete if it can simulate any Turing machine (i.e.,

it can perform any computational task given enough time and resources).
 Ethereum's smart contracts are Turing Complete, meaning they can run
complex logic, unlike Bitcoin’s simpler scripting language.

XII. Module 2: Security, Trust, and Privacy

This module focuses on key principles and mechanisms used to ensure security,
trust, and privacy in computing systems, especially in distributed environments.

XIII. 1. Core Security Principles (CIA Triad)

1. Confidentiality – Ensuring that only authorized users can access

sensitive data.
o Example: Encryption (AES, RSA).
2. Integrity – Ensuring that data remains unchanged and unaltered during
transmission or storage.
o Example: Hash functions (SHA-256).
3. Availability – Ensuring that data and services are accessible when
needed.
o Example: DDoS mitigation techniques.

XIV. 2. Authentication, Authorization, and Access Control

 Authentication – Verifying the identity of a user or system (e.g.,

passwords, biometrics, 2FA).
 Authorization – Determining what an authenticated user is allowed to do
(e.g., role-based access).
 Access Control – Enforcing security policies (e.g., ACLs, RBAC).

XV. 3. Accounting & Non-Repudiation

 Accounting (Auditing & Logging) – Tracking user actions to ensure

accountability.
 Non-Repudiation – Preventing denial of an action by ensuring
undeniable proof (e.g., digital signatures).
XVI. 4. Cryptography
XVII. Symmetric vs. Asymmetric Key Cryptography

 Symmetric Key Cryptography – Same key for encryption & decryption.

Fast but less secure if key is compromised.
o Example: AES (Advanced Encryption Standard).
 Asymmetric Key Cryptography – Uses a key pair (public & private
keys). More secure for communication.
o Example: RSA, ECC.

XVIII. Hash Function

 A one-way function that generates a fixed-length output from an input.

 Used for data integrity verification (e.g., SHA-256 in Bitcoin).

XIX. Merkle Tree Hash

 A hierarchical structure of hashes used in blockchain and distributed

systems to verify large data sets efficiently.
 Example: Used in Bitcoin and Ethereum to verify transactions.

XX. 5. Digital Signatures

 Used for authentication, integrity verification, and non-repudiation.

XXI. Types of Digital Signatures

1. RSA – Based on the difficulty of factoring large prime numbers.

2. Schnorr – More efficient and secure than RSA, used in Bitcoin Taproot.
3. ECDSA (Elliptic Curve Digital Signature Algorithm) – More efficient
than RSA due to smaller key sizes. Used in Bitcoin, Ethereum.

XXII. 6. Memory Hard Algorithm

 Designed to make computations expensive in terms of memory usage,

preventing large-scale attacks using specialized hardware (ASICs).
 Example: Argon2 (used for password hashing).
XXIII. 7. Zero-Knowledge Proof (ZKP)

 A cryptographic method where one party proves knowledge of a secret

without revealing the secret itself.
 Used for privacy-preserving authentication (e.g., zk-SNARKs in Zcash).

XXIV. 8. User Privacy

 Ensuring anonymity and data protection online.

 Techniques include:
o End-to-End Encryption (E2EE) (e.g., Signal, WhatsApp).
o Tor and VPNs for anonymous browsing.
o Privacy-focused blockchains (e.g., Monero, Zcash).

XXV. 1. Introduction to Blockchain

Blockchain is a decentralized, immutable ledger used for recording

transactions across multiple nodes in a network. It eliminates the need for
central authority and enhances security, transparency, and trust.

XXVI. 2. Benefits Over Traditional Distributed Databases

Traditional Distributed
Feature Blockchain
Database
Control Centralized Decentralized
Requires trusted third
Trust Trustless (peer-to-peer)
party
Immutable (once added, data cannot
Immutability Data can be altered
be changed)
Vulnerable to single point
Security Cryptographically secured
of failure
Consensus mechanisms (PoW, PoS,
Consensus Admin-controlled updates
etc.)

XXVII. 3. Blockchain Network Types

1. Public Blockchain – Open to everyone, fully decentralized (e.g., Bitcoin,

Ethereum).
 2. Private Blockchain – Controlled by a single organization, restricted
access (e.g., Hyperledger).
3. Consortium Blockchain – Controlled by multiple organizations, semi-
decentralized (e.g., Quorum).

XXVIII. 4. Data Structure of a Block

A blockchain consists of blocks, each containing:

 Block Header
o Previous block hash
o Timestamp
o Nonce (for mining)
o Merkle root (hash of all transactions in the block)
 Block Body
o List of transactions

Each block is linked to the previous one, forming a chain.

XXIX. 5. Block Construction & Addition

1. Transactions are collected.

2. Transactions are validated using digital signatures.
3. Miners (or validators) verify and package transactions into a block.
4. The block is added to the blockchain after consensus is reached.

XXX. 6. Block Mining Mechanisms

 Proof of Work (PoW) – Miners solve cryptographic puzzles (e.g.,

Bitcoin).
 Proof of Stake (PoS) – Validators stake cryptocurrency to validate
transactions (e.g., Ethereum 2.0).
 Delegated Proof of Stake (DPoS) – Voting-based system (e.g., EOS).
 Proof of Authority (PoA) – Validators are pre-selected (e.g., VeChain).

XXXI. 7. Merkle Patricia Tree

  A data structure used in Ethereum for efficient verification and storage
of transactions.
 Merkle Tree allows fast verification of data.
 Patricia Tree optimizes storage and access time.

XXXII. 8. Gas Limit, Transactions & Fees

 Gas Limit – The maximum computational work a transaction can

perform (Ethereum).
 Transaction Fee – Miners/validators charge fees to process transactions.
 Dynamic Fees – Change based on network congestion.

XXXIII. 9. Anonymity & Privacy in Blockchain

 Bitcoin – Pseudonymous (not fully private).

 Zcash (zk-SNARKs) – Zero-knowledge proofs ensure transaction
privacy.
 Monero (Ring Signatures) – Completely anonymous transactions.

XXXIV. 10. Rewards & Chain Policy

 Mining Rewards – Incentives for miners (Bitcoin block reward +

transaction fees).
 Staking Rewards – Validators earn rewards for staking crypto
(Ethereum 2.0).
 Chain Policy – Determines governance rules (who can validate
transactions, upgrade protocols, etc.).

XXXV. 11. Real-Time Applications of Blockchain

 Cryptocurrencies – Bitcoin, Ethereum, etc.

 Supply Chain – Provenance tracking (IBM Food Trust).
 Finance (DeFi) – Decentralized lending (Aave, Uniswap).
 Identity Management – Digital IDs (Microsoft ION).
 Voting Systems – Secure electronic voting.
XXXVI. 12. Soft Fork vs. Hard Fork

 Soft Fork – Backward-compatible update (e.g., SegWit in Bitcoin).

 Hard Fork – Non-backward-compatible update, creating a new chain
(e.g., Bitcoin vs. Bitcoin Cash).

XXXVII. Module 4: Consensus Algorithms in Blockchain

This module covers distributed consensus mechanisms used in blockchain to

ensure agreement among nodes, maintain security, and prevent malicious
activities.

XXXVIII. 1. Distributed Consensus

Consensus in a distributed system ensures that all nodes agree on the same state
of the ledger, even in the presence of faulty or malicious nodes.

 Challenges: Fault tolerance, Sybil attacks, network latency.

 Types of Consensus: PoW, PoS, PoB, BFT, PBFT, RPCA, etc.

XXXIX. 2. Nakamoto Consensus

 Introduced in Bitcoin by Satoshi Nakamoto.

 Uses Proof of Work (PoW) to achieve decentralized consensus.
 Works by requiring nodes (miners) to solve a cryptographic puzzle to add
a new block.

XL. 3. Proof of Work (PoW)

 Process: Miners solve a computational puzzle to find a valid hash for a

block.
 Security: Difficult to attack, as altering the blockchain requires immense
computational power.
 Drawbacks: High energy consumption, slow transaction speed.
 Example: Bitcoin, Litecoin.

XLI. 4. Proof of Stake (PoS)

  Process: Validators are chosen to create new blocks based on the amount
of cryptocurrency they stake.
 Security: Less energy-intensive than PoW.
 Drawbacks: Wealthier participants have more influence.
 Example: Ethereum 2.0, Cardano.

XLII. 5. Proof of Burn (PoB)

 Process: Participants "burn" (destroy) a portion of cryptocurrency to gain

mining rights.
 Security: Reduces reliance on hardware power.
 Example: Slimcoin.

XLIII. 6. Delegated Proof of Stake (DPoS)

 Process: Token holders vote for delegates, who validate transactions and
produce blocks.
 Security: More efficient and scalable than PoS, but introduces
centralization risks.
 Example: EOS, TRON.

XLIV. 7. Byzantine Fault Tolerance (BFT)

 A system is Byzantine Fault Tolerant if it can function correctly even

when some nodes act maliciously or fail.
 Goal: Prevent dishonest nodes from disrupting consensus.

XLV. 8. Practical Byzantine Fault Tolerance (PBFT)

 A more efficient BFT variant used in permissioned blockchains.

 Requires 2/3 majority of honest nodes to reach consensus.
 Example: Hyperledger Fabric.

XLVI. 9. Ripple Protocol Consensus Algorithm (RPCA)

  Process: Transactions are validated by trusted nodes (Unique Node List -
UNL).
 Security: Faster and more efficient than PoW but relies on trusted
validators.
 Example: Ripple (XRP).

XLVII. 10. Difficulty Level in Blockchain

 The difficulty of mining adjusts dynamically to maintain consistent

block times.
 In Bitcoin, difficulty changes every 2016 blocks (~2 weeks).

XLVIII. 11. Sybil Attack

 Definition: A single attacker creates multiple fake nodes to gain majority

control.
 Prevention: PoW, PoS, identity verification, reputation systems.

XLIX. 12. Energy Utilization and Alternatives

 PoW Energy Consumption: Bitcoin mining consumes a huge amount of

electricity (~100+ TWh/year).
 Alternatives:
o PoS & DPoS (lower energy consumption).
o Sharding & Layer-2 solutions (improving scalability).
o Green Mining (renewable energy-based mining).

L. Module 5: Cryptocurrency and Blockchain Applications

This module covers the history of blockchain, its applications in cryptocurrency,

decentralized finance, governance, IoT, and various industries.

LI. 1. History of Blockchain & Cryptocurrency

 1980s: David Chaum introduces cryptographic e-cash concepts.

  2008: Satoshi Nakamoto publishes the Bitcoin whitepaper.
 2009: Bitcoin network goes live.
 2013: Ethereum introduces smart contracts.
 2020s: Growth of DeFi, NFTs, and institutional adoption.

LII. 2. Distributed Ledger Technology (DLT)

 Definition: A decentralized system for recording transactions across

multiple nodes.
 Key Features: Immutability, transparency, decentralization, security.
 Examples: Blockchain, DAG (Directed Acyclic Graph), Hashgraph.

LIII. 3. Bitcoin Protocols - Mining Strategy & Rewards

 Mining Strategy: PoW-based system where miners solve cryptographic

puzzles.
 Rewards: Miners receive Bitcoin rewards (currently 6.25 BTC per block,
halving every 4 years).
 Transaction Fees: Additional incentive for miners.

LIV. 4. Ethereum – Construction & Features

 Ethereum Virtual Machine (EVM): A decentralized computing

environment.
 Smart Contracts: Self-executing contracts stored on the blockchain.
 Ethereum 2.0: Transition to Proof of Stake for scalability and efficiency.

LV. 5. DAO (Decentralized Autonomous Organization)

 Definition: An organization governed by smart contracts instead of

central authorities.
 Example: The original DAO (2016) was hacked, leading to Ethereum's
hard fork.
 Modern DAOs: MakerDAO, Uniswap governance.
LVI. 6. Smart Contracts & Decentralized Applications (DApps)

 Smart Contracts: Self-executing contracts with predefined rules (e.g.,

Solidity-based).
 DApps: Applications running on a decentralized network (e.g., Uniswap,
Aave).

LVII. 7. GHOST (Greedy Heaviest Observed SubTree) Protocol

 A consensus protocol improving Ethereum’s block validation speed.

 Reduces orphan blocks and improves network efficiency.

LVIII. 8. Vulnerabilities & Attacks in Blockchain

 51% Attack: A group gains majority control over a blockchain network.

 Sybil Attack: A single entity creates multiple fake identities to influence
the system.
 Reentrancy Attack: Exploits smart contract vulnerabilities (e.g., DAO
hack in Ethereum).

LIX. 9. Sidechain Technology

 Definition: A separate blockchain linked to the main blockchain for

scalability and flexibility.
 Examples: Liquid Network (Bitcoin), Polygon (Ethereum).

LX. 10. Namecoin - Blockchain for Domain Name System (DNS)

 First altcoin (2011) used for decentralized domain name registration.

 Prevents censorship and DNS hijacking.

LXI. 11. Stakeholders in Blockchain Ecosystem

 Miners/Validators: Maintain the blockchain.

 Developers: Build protocols and applications.
  Users: Interact with blockchain applications.
 Investors & Exchanges: Facilitate trading and liquidity.

LXII. 12. Roots of Bitcoin

 Inspired by cypherpunk movement and digital cash experiments like

DigiCash, Hashcash, B-Money.
 Solves double-spending problem without a central authority.

LXIII. 13. Legal Aspects of Cryptocurrency

 Cryptocurrency Exchanges: Platforms for buying/selling crypto

(Binance, Coinbase).
 Black Market Concerns: Used in illicit activities (Darknet markets).
 Global Economy Impact: Increasing institutional adoption, CBDCs
(Central Bank Digital Currencies) being explored by governments.

LXIV. 14. Blockchain Applications in Different Industries

LXV. A. Finance & Banking (DeFi)

 Decentralized Finance (DeFi): Lending, borrowing, trading without

intermediaries.
 Examples: Uniswap (DEX), Aave (lending), MakerDAO (stablecoins).

LXVI. B. Energy Trading

 Blockchain-based energy grids (e.g., Power Ledger).

 Peer-to-peer (P2P) energy trading among users.

LXVII. C. Internet of Things (IoT, IoV, IoD, IIoT)

 IoV (Internet of Vehicles): Autonomous vehicle payments and data

sharing.
 IoD (Internet of Devices): Secure IoT communication.
 IIoT (Industrial IoT): Supply chain tracking, predictive maintenance.
 Smart Cities & Smart Homes: Decentralized identity, security,
automation.

LXVIII. D. Medical Record Management

  Secure, immutable storage of patient data.
 Example: MedRec project by MIT.

LXIX. E. Real Estate Business

 Tokenization of property for fractional ownership.

 Example: Propy – real estate transactions on blockchain.

LXX. F. Entertainment Industry

 NFTs (Non-Fungible Tokens): Digital ownership of art, music, gaming

assets.
 Example: OpenSea, Axie Infinity, Decentraland.

LXXI. 15. Future Scope of Blockchain

 Interoperability solutions (e.g., Polkadot, Cosmos).

 Quantum-resistant cryptography to counter future threats.
 Mass adoption in government services (voting, identity verification).
 AI + Blockchain integration for automation & transparency.