Private channels (common in Hyperledger Fabric) or state channels allow for confidential transactions between specific participants on an otherwise shared network. This meets the requirement for privacy among known entities while still leveraging a blockchain’s other benefits, unlike a fully public ledger.

Blockchain ensures that data, once written, is tamper-evident and immutable. However, it cannot verify the initial accuracy or truthfulness of the data entered. If inaccurate or fraudulent data is input at the origin (‘garbage in’), the blockchain will faithfully and immutably record that inaccurate data (‘garbage out’).

The core value proposition of blockchain is enabling collaboration and trust in environments with multiple, mutually distrusting stakeholders. It provides a single source of truth without requiring a central, trusted authority. The other options describe needs better served by centralized or traditional systems.

In a consortium or permissioned blockchain (like those used in trade finance), peer nodes are the full participants. They hold a complete copy of the ledger, validate transactions against the agreed-upon rules, and run the consensus protocol to agree on the state of the ledger. Light and observer nodes have limited roles, and mining nodes are specific to Proof-of-Work public chains.

While the blockchain and smart contract may be decentralized and secure, they rely on an external data source (the oracle). If this oracle is compromised, provides incorrect data, or goes offline, it directly manipulates or halts the contract’s execution. This creates a critical trust dependency outside the blockchain’s secure environment.

Blockchain 1.0, exemplified by Bitcoin, is primarily a decentralized ledger for cryptocurrency transactions. Blockchain 2.0, with Ethereum as the pioneer, introduced a generalized platform that can execute arbitrary logic via smart contracts, enabling the creation of decentralized applications (DApps) that go far simple currency transfers.

Tokenization divides an asset into digital shares (tokens). This allows multiple investors to own fractions of a high-value, illiquid asset like real estate. These tokens can then be traded more easily on secondary markets, potentially increasing the asset’s liquidity compared to traditional whole-asset sales.

In permissioned networks, knowing who you are transacting with is paramount. An MSP is a critical component that manages the issuance of digital certificates, defines the roles (e.g., admin, peer, client) within an organization, and authenticates participants, thereby enforcing the access control policies of the network.

Storing large files directly on-chain is extremely expensive and inefficient, bloating the ledger for all participants. The standard pattern is to store the file (image, document) in a cost-effective off-chain storage system (like IPFS or a cloud service) and then store only the cryptographic hash of that file on-chain. The on-chain hash acts as a tamper-proof fingerprint, proving the off-chain file has not been altered.

Private channels (common in Hyperledger Fabric) or state channels allow for confidential transactions between specific participants on an otherwise shared network. This meets the requirement for privacy among known entities while still leveraging a blockchain’s other benefits, unlike a fully public ledger.0