A consortium bank is evaluating a delegated proof-of-stake blockchain for interbank settlements. They require that once a block is finalized, it cannot be reverted, and they want to penalize validators who approve conflicting blocks. Which mechanism should they look for in the protocol?

Difficulty adjustment algorithm

Slashing conditions for equivocation

How does a chain reorganization affect transaction settlement?

It permanently deletes all transactions from the ledger

It speeds up settlement by confirming transactions faster

Transactions in the discarded blocks may be reversed, so settlement is not guaranteed until the chain is stable

Why is there often a trade-off between finality and liveness in consensus protocols?

Liveness requires more confirmations, which reduces finality

Finality requires more nodes, which reduces liveness

Strict finality requirements may cause the network to halt if consensus cannot be reached, reducing liveness

Finality and liveness are the same property

EC-CouncilBlockchain Fintech Certification

Domain 2Objective 4

Finality in Blockchain Consensus BFC Practice Questions (Page 6)

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

45questions here

9free pages

8concepts

Questions 26–30

26application · medium
A cryptocurrency exchange accepts deposits of a PoW-based token. To minimize the risk of accepting a deposit that is later reversed by a chain reorganization, the exchange requires a certain number of confirmations before crediting the customer's account. Which concept best describes the exchange's approach?
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27application · medium
A consortium bank is evaluating a delegated proof-of-stake blockchain for interbank settlements. They require that once a block is finalized, it cannot be reverted, and they want to penalize validators who approve conflicting blocks. Which mechanism should they look for in the protocol?
Select an answer first
28application · medium
A payment network uses PBFT consensus to process high-value transactions. The network has 7 nodes. How many nodes can fail or act maliciously without compromising the network's ability to reach consensus?
Select an answer first
29foundation · easy
How does a chain reorganization affect transaction settlement?
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30foundation · easy
Why is there often a trade-off between finality and liveness in consensus protocols?
Select an answer first

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Finality in Blockchain Consensus BFC Practice Questions (Page 6)

Questions 26–30

A consortium bank is evaluating a delegated proof-of-stake blockchain for interbank settlements. They require that once a block is finalized, it cannot be reverted, and they want to penalize validators who approve conflicting blocks. Which mechanism should they look for in the protocol?

A payment network uses PBFT consensus to process high-value transactions. The network has 7 nodes. How many nodes can fail or act maliciously without compromising the network's ability to reach consensus?

How does a chain reorganization affect transaction settlement?

Why is there often a trade-off between finality and liveness in consensus protocols?

Keep studying — Consensus Mechanisms for Financial Systems