Cryptomining and the Mining Ecosystem BDC Practice Questions (Page 8)

Questions 36–40

1. 36expert · hard

   A mining farm is considering upgrading to newer ASIC miners that are twice as efficient as their current ones. The farm's electricity cost is fixed, and the network difficulty is expected to adjust upward in response to the increased hash rate. What is the net effect on the farm's profitability?

   • AProfitability will increase because the new miners use less electricity per hash, reducing operating costs.
   • BProfitability will decrease because the difficulty increase will reduce the farm's share of blocks.
   • CProfitability will remain roughly the same because the efficiency gain is offset by the difficulty increase.
   • DProfitability will increase because the farm's hash rate increases, allowing it to find more blocks.
   Reveal Solution Discussion Select an answer first
2. 37foundation · easy

   How does Proof of Work secure a blockchain against tampering with historical transactions?

   • AIt stores a copy of the blockchain on every miner's hard drive, making changes impossible
   • BIt requires a majority of miners to sign off on every block
   • CIt encrypts all transactions with a private key that only miners hold
   • DIt makes altering a past block require redoing the work for that block and all subsequent blocks
   Reveal Solution Discussion Select an answer first
4. 38foundation · easy

   Which of the following is a common mitigation strategy to reduce the environmental impact of cryptomining?

   • AReducing the mining difficulty to lower energy consumption
   • BUsing more efficient mining hardware and renewable energy sources
   • CMoving all mining to cloud services that use virtual machines
   • DIncreasing the block reward to incentivize miners to use less energy
   Reveal Solution Discussion Select an answer first
5. 39application · medium

   A blockchain network uses Proof of Work. An attacker wants to reverse a confirmed transaction. What must the attacker control to have a realistic chance of success?

   • AA large number of mining pools to coordinate a temporary difficulty reduction.
   • BA majority of the network's nodes to validate the fraudulent block.
   • CMore than 50% of the network's total hash rate.
   • DThe private keys of the transaction's sender and receiver.
   Reveal Solution Discussion Select an answer first
6. 40application · medium

   A blockchain network uses Proof of Work. A miner successfully finds a valid block. What is the miner's primary contribution to the network?

   • AThe miner provides computational work that secures the network and validates a set of transactions.
   • BThe miner updates the difficulty level for the next block.
   • CThe miner verifies all transactions in the mempool and broadcasts them to the network.
   • DThe miner creates new coins and distributes them to all network participants.
   Reveal Solution Discussion Select an answer first