QUESTION $1$: $(25$ MARKS$)$

$($a$)$ Where are Bitcoin transactions stored? $(2$ marks$)$

$($b$)$ Discuss at least three benefits of digital currencies such as Bitcoin

from a user perspective.

$(6$ marks$)$

$($c$)$ Which type of wallet is the most secure$?$ Explain your answer. $(3$ marks$)$

$($d$)$ By means of a diagram, describe what happens when a user makes

a transaction in the Bitcoin network.

$(14$ marks$)$

QUESTION $2$: $(25$ MARKS$)$

$($a$)$ Which main feature distinguishes databases from blockchain

ledgers?

$(3$ marks$)$

$($b$)$ Which keys are required when a user makes a Bitcoin transaction? $(4$ marks$)$

$($c$)$ A recent bitcoin transaction from Alice to Bob contains two inputs:

TxIn$1=1\mathrm{.}66$ BTC and TxIn$2=0\mathrm{.}94.$ It has two outputs: TxOut$1=1\mathrm{.}71$ and

TxOut$2=0\mathrm{.}84.$

i$.$ Who is the likely owner of TxOut$1?$

ii$.$ Who is the likely owner of TxOut$2?$

iii. What is the transaction fee paid for this transaction?

iv$.$ Who receives this transaction fee?

$(2$ marks$)$

$(2$ marks$)$

$(2$ marks$)$

$(2$ marks$)$

$($d$)$ Suggest which type of blockchain $($public or private$)$ should be used

for a blockchain based donations application in a charity

organization. What benefits does the blockchain technology

introduce in such a scenario? Justify your answer.

$(5$ marks$)($e$)$ During process of creating the Bitcoin address, what is the purpose

of the checksum incorporated in the address? $(5$ marks$)$