Cross-Chain Communication and Interoperability Protocols BBLC Practice Questions (Page 4)

Questions 16–20

1. 16application · medium

   A crypto exchange wants to enable users to trade Bitcoin for Ethereum directly from their own wallets without depositing funds on the exchange. The exchange requires that either both trades complete or neither does, and no intermediary should be able to steal funds. Which mechanism should the exchange implement?

   • AA centralized exchange wallet that holds both assets and updates balances internally
   • BA sidechain that wraps Bitcoin as an ERC-20 token on Ethereum
   • CA notary service that coordinates the trade and holds funds briefly
   • DAn atomic swap using hash time-locked contracts (HTLCs) on both chains
   Reveal Solution Discussion Select an answer first
2. 17foundation · easy

   What is a common security risk associated with notary-based cross-chain bridges?

   • AThe bridge might accidentally delete the entire blockchain
   • BThe bridge will always require high transaction fees
   • CThe underlying blockchains might merge and lose their independence
   • DThe notary or notary group could be compromised or act maliciously
   Reveal Solution Discussion Select an answer first
4. 18foundation · easy

   Why is cross-chain communication necessary in a multi-blockchain ecosystem?

   • ATo eliminate the need for cryptographic hashing in blockchain transactions
   • BTo replace the need for consensus mechanisms within individual blockchain networks
   • CTo allow a single blockchain to process all transactions for all networks
   • DTo enable different blockchain networks to share data and transfer assets without a central intermediary
   Reveal Solution Discussion Select an answer first
5. 19application · medium

   Two trading firms want to exchange digital assets across a Bitcoin-like network and an Ethereum-like network without using a centralized exchange. They need a method that does not require either party to trust the other or a third party, and they want the exchange to be atomic. Which interoperability protocol should they use?

   • AHash time-locked contracts (HTLCs) for an atomic swap
   • BA sidechain that holds both assets and settles the exchange
   • CA relay chain that coordinates the exchange between the two networks
   • DA notary scheme with a trusted escrow service
   Reveal Solution Discussion Select an answer first
6. 20expert · hard

   A global bank wants to enable cross-border payments between its permissioned network and a public blockchain used by partners. The bank must comply with data residency regulations that prohibit personal data from leaving a specific country. The bank also needs to minimize latency for high-volume transactions. Which approach best balances these constraints?

   • AStore personal data on a sidechain that is physically located in the restricted country
   • BUse a cross-chain messaging protocol that only passes transaction hashes and settlement proofs, keeping personal data on the originating chain
   • CUse a notary bridge that encrypts all personal data before sending it to the public chain
   • DDeploy a relay chain node in the restricted country to process all cross-chain messages locally
   Reveal Solution Discussion Select an answer first