Advanced Blockchain Concepts and Future Innovations in FinTech BFC Practice Questions (Page 4)

Questions 16–20

1. 16application · medium

   A fintech company wants to enable users to transfer tokenized securities between a public blockchain and a private permissioned blockchain. They need to ensure that the transfer is legally compliant and that the tokens are not duplicated. Which approach should they use?

   • AA cross-chain bridge with a lock-and-mint mechanism
   • BA notary scheme with a trusted third party
   • CAn atomic swap using HTLCs
   • DA wrapped token issued by a centralized custodian
   Reveal Solution Discussion Select an answer first
2. 17foundation · easy

   What is a central bank digital currency (CBDC)?

   • AA private stablecoin issued by a commercial bank
   • BA cryptocurrency that is mined by a central bank using Proof of Work
   • CA digital token that represents a basket of different fiat currencies
   • DA digital form of a country's fiat currency issued and backed by its central bank
   Reveal Solution Discussion Select an answer first
4. 18foundation · easy

   What is an atomic swap in the context of cross-chain interoperability?

   • AA peer-to-peer exchange of assets between two different blockchains that either fully completes or not at all
   • BA method to combine two different cryptocurrencies into a single token
   • CA process of converting a physical asset into a digital token on a single blockchain
   • DA consensus mechanism that allows two blockchains to share the same validator set
   Reveal Solution Discussion Select an answer first
5. 19foundation · easy

   What is a key implication of tokenizing a real-world asset?

   • AIt eliminates all legal and regulatory requirements for the asset
   • BIt allows for fractional ownership and increased liquidity of the asset
   • CIt makes the asset completely anonymous and untraceable
   • DIt guarantees the asset's value will increase over time
   Reveal Solution Discussion Select an answer first
6. 20expert · hard

   A blockchain platform wants to support cross-chain asset transfers between its sharded network and a legacy blockchain. They plan to use a bridge. What is a critical risk they must mitigate?

   • AThe legacy blockchain will not be able to communicate with the sharded network due to different consensus algorithms.
   • BCross-chain transfers will always require a centralized exchange.
   • CThe bridge becomes a single point of failure and a target for attacks, potentially leading to loss of funds.
   • DSharding will automatically make the bridge obsolete.
   Reveal Solution Discussion Select an answer first