Challenges in Blockchain Consensus Mechanisms BFC Practice Questions (Page 6)

Questions 26–30

1. 26application · medium

   A consortium of banks is designing a permissioned blockchain for interbank transfers. They need to decide between a Proof of Authority (PoA) consensus and a Practical Byzantine Fault Tolerance (PBFT) consensus. The banks value high transaction throughput and low latency, but they are concerned about the concentration of power among a few validators. Which trade-off are they most directly facing?

   • ASecurity versus scalability
   • BGovernance versus upgradability
   • CDecentralization versus efficiency
   • DEnergy consumption versus cost
   Reveal Solution Discussion Select an answer first
2. 27application · hard

   A decentralized finance (DeFi) protocol is choosing a consensus mechanism. They want to maximize decentralization to resist censorship, but they also need to support high-frequency trading with low latency. Which approach best balances these conflicting goals?

   • AUse a Practical Byzantine Fault Tolerance network with 10 nodes
   • BUse a single-chain Proof of Work network
   • CUse a sharded Proof of Stake network with multiple parallel chains
   • DUse a delegated Proof of Stake network with 21 elected validators
   Reveal Solution Discussion Select an answer first
4. 28application · medium

   A mining pool operator is considering moving from Proof of Work to Proof of Stake to reduce electricity costs. However, they are concerned about losing their competitive advantage in mining hardware. What is the primary economic trade-off they will face?

   • AThey will no longer need to maintain any servers
   • BThey will need to acquire and stake a large amount of the native token instead of investing in mining hardware
   • CThey will have to pay higher transaction fees to users
   • DThey will lose the ability to earn block rewards
   Reveal Solution Discussion Select an answer first
5. 29expert · hard

   A blockchain network using Proof of Stake (PoS) is facing a potential 'nothing at stake' problem, where validators may vote on multiple forks without cost. Which mechanism is designed to mitigate this issue?

   • ASlashing conditions
   • BLongest chain rule
   • CBlock reward halving
   • DDifficulty adjustment
   Reveal Solution Discussion Select an answer first
6. 30foundation · easy

   What is a primary challenge of using Proof of Work (PoW) in a financial system that requires high transaction throughput?

   • APoW has low transaction throughput and high latency due to the computational puzzle and block time.
   • BPoW is permissioned and requires a central authority to validate transactions.
   • CPoW requires all validators to be known and trusted, which is difficult to achieve in a financial system.
   • DPoW is vulnerable to Sybil attacks because it is permissionless.
   Reveal Solution Discussion Select an answer first