A bank is deploying a privacy-preserving blockchain for cross-border payments. The system must comply with AML/KYC regulations, which require the bank to verify the identity of transacting parties and monitor for suspicious activity. The bank also wants to protect customer privacy from other network participants. Which design best balances these requirements?

Use zero-knowledge proofs for transaction validity while maintaining a separate permissioned KYC/AML layer accessible to regulators.

Make all transaction data public to ensure full transparency for regulators.

Encrypt all data with the bank's public key and store it on-chain.

Use fully anonymous transactions with no identity linkage.

A government agency is implementing a blockchain-based voting system that must ensure voter privacy while also preventing duplicate voting. The system uses zero-knowledge proofs to allow voters to prove they are registered without revealing their identity. Which additional mechanism is necessary to prevent double voting?

A Merkle tree of all registered voters.

A nullifier that is derived from the voter's secret key and is revealed when voting, ensuring each voter can vote only once.

A digital signature from the voter's public key.

A developer is implementing a zero-knowledge proof system for a blockchain that must be auditable by regulators. The system uses zk-SNARKs with a trusted setup. The regulators are concerned about the possibility of a malicious party in the setup ceremony. What is the best way to mitigate this risk?

Publish the setup parameters and hope that any malicious behavior is detected

Switch to zk-STARKs to avoid the trusted setup entirely

Use a single trusted entity to generate the parameters

Use a multi-party computation (MPC) ceremony with many participants, where only one needs to be honest

A healthcare consortium wants to run a smart contract that processes patient claims. The contract must verify that a patient is eligible for coverage without revealing the patient's medical history. The team is evaluating zero-knowledge techniques. Which approach best meets the requirement?

Use a permissioned blockchain where only authorized nodes can see the data.

Store patient data off-chain and have the contract access it via an oracle.

Encrypt the patient data on-chain and allow the contract to decrypt it during execution.

Use a zero-knowledge proof to demonstrate eligibility criteria are met without disclosing underlying data.

A bank wants to prove to a regulator that its total liabilities are less than its total assets without revealing the individual account balances. Which zero-knowledge technique is most appropriate?

A digital signature from the bank's CEO

A zero-knowledge range proof on the sum of assets and liabilities

A Merkle proof of each account balance

EC-CouncilBlockchain Developer Certification

Domain 9Objective 3

Privacy and Zero-Knowledge Innovations BDC Practice Questions (Page 1)

Part of the Advanced Concepts and Future Innovations domain, which makes up ~12% of our current practice bank.

38questions here

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Questions 1–5

1expert · hard
A bank is deploying a privacy-preserving blockchain for cross-border payments. The system must comply with AML/KYC regulations, which require the bank to verify the identity of transacting parties and monitor for suspicious activity. The bank also wants to protect customer privacy from other network participants. Which design best balances these requirements?
Select an answer first
2expert · hard
A government agency is implementing a blockchain-based voting system that must ensure voter privacy while also preventing duplicate voting. The system uses zero-knowledge proofs to allow voters to prove they are registered without revealing their identity. Which additional mechanism is necessary to prevent double voting?
Select an answer first
3expert · hard
A developer is implementing a zero-knowledge proof system for a blockchain that must be auditable by regulators. The system uses zk-SNARKs with a trusted setup. The regulators are concerned about the possibility of a malicious party in the setup ceremony. What is the best way to mitigate this risk?
Select an answer first
4application · medium
A healthcare consortium wants to run a smart contract that processes patient claims. The contract must verify that a patient is eligible for coverage without revealing the patient's medical history. The team is evaluating zero-knowledge techniques. Which approach best meets the requirement?
Select an answer first
5application · medium
A bank wants to prove to a regulator that its total liabilities are less than its total assets without revealing the individual account balances. Which zero-knowledge technique is most appropriate?
Select an answer first

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Privacy and Zero-Knowledge Innovations BDC Practice Questions (Page 1)

Questions 1–5

A developer is implementing a zero-knowledge proof system for a blockchain that must be auditable by regulators. The system uses zk-SNARKs with a trusted setup. The regulators are concerned about the possibility of a malicious party in the setup ceremony. What is the best way to mitigate this risk?

A healthcare consortium wants to run a smart contract that processes patient claims. The contract must verify that a patient is eligible for coverage without revealing the patient's medical history. The team is evaluating zero-knowledge techniques. Which approach best meets the requirement?

A bank wants to prove to a regulator that its total liabilities are less than its total assets without revealing the individual account balances. Which zero-knowledge technique is most appropriate?

Keep studying — Advanced Concepts and Future Innovations