What is a fundamental difference between consensus in centralized finance (CeFi) and decentralized finance (DeFi)?

CeFi uses a single trusted entity, while DeFi uses a distributed consensus mechanism among participants

CeFi uses Proof of Work, while DeFi always uses Proof of Stake

CeFi requires all participants to run full nodes, while DeFi does not

CeFi is always faster than DeFi because it uses no consensus at all

In a centralized financial system, how is consensus typically achieved?

Through a competitive mining process that rewards validators

Through a central authority that validates and records transactions

Through a random selection of nodes to form a consensus committee

Through a distributed voting process among all network participants

A regulated securities exchange is evaluating a blockchain for post-trade clearing. Regulators require that the system be able to reverse erroneous transactions within the same business day. Which consensus model property is most critical?

Support for administrative intervention

A fintech firm is audited for its use of a public PoS blockchain. The auditor asks how the firm can prove that a specific transaction was finalized and not later reverted. What should the firm provide?

A screenshot of the transaction in a block explorer

A cryptographic proof of finality, such as a checkpoint or epoch boundary

A signed statement from the validator

A securities settlement system uses a PoS blockchain. A group of validators colludes to censor transactions from a specific user. What is the most effective mitigation?

Increase the transaction fee to incentivize validators

Switch to a PoW consensus to make censorship harder

Reduce the block time to process transactions faster

Increase the number of validators and require a higher quorum for finality

EC-CouncilBlockchain Fintech Certification

Domain 2Objective 3

Consensus Models in Financial Systems BFC Practice Questions (Page 7)

Part of the Consensus Mechanisms for Financial Systems domain, which makes up ~11% of our current practice bank.

35questions here

7free pages

5concepts

Questions 31–35

31foundation · easy
What is a fundamental difference between consensus in centralized finance (CeFi) and decentralized finance (DeFi)?
Select an answer first
32foundation · easy
In a centralized financial system, how is consensus typically achieved?
Select an answer first
33application · medium
A regulated securities exchange is evaluating a blockchain for post-trade clearing. Regulators require that the system be able to reverse erroneous transactions within the same business day. Which consensus model property is most critical?
Select an answer first
34application · medium
A fintech firm is audited for its use of a public PoS blockchain. The auditor asks how the firm can prove that a specific transaction was finalized and not later reverted. What should the firm provide?
Select an answer first
35expert · hard
A securities settlement system uses a PoS blockchain. A group of validators colludes to censor transactions from a specific user. What is the most effective mitigation?
Select an answer first

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