Fundamental Concepts and Working Principles of Blockchain Technology BFC Practice Questions (Page 1)

Questions 1–5

1. 1expert · hard

   A security auditor is reviewing a private blockchain used for interbank settlements. They want to verify that no transaction has been altered since it was recorded. The auditor has access to the full blockchain data. Which verification method provides the strongest cryptographic evidence of transaction integrity?

   • AChecking that the block timestamps are in increasing order
   • BRecomputing the Merkle root of each block's transactions and comparing it to the stored Merkle root, then verifying the hash chain across blocks
   • CConfirming that the block reward address matches the miner's public key
   • DVerifying that the block size is within the expected range
   Reveal Solution Discussion Select an answer first
2. 2application · medium

   A group of five retail banks wants to share a blockchain for interbank settlements. They require that only authorized banks can read and write transactions, but they also want to avoid the overhead of a fully public network. Which type of blockchain should they choose?

   • AA consortium blockchain where the five banks are the only authorized nodes and validators.
   • BA private blockchain owned and operated by a single bank, with the other four as read-only users.
   • CA distributed database with no access controls, relying on encryption at rest.
   • DA public blockchain where anyone can participate as a node.
   Reveal Solution Discussion Select an answer first
4. 3application · medium

   A bank is considering replacing its centralized trade-finance database with a distributed ledger to share data with partner institutions. The bank's compliance team asks: 'What is the fundamental difference between our current centralized database and a distributed ledger?' Which answer is correct?

   • AA distributed ledger has multiple synchronized copies maintained by different participants, whereas a centralized database has a single authoritative copy.
   • BA centralized database can never be tamper-evident, while a distributed ledger is always tamper-proof.
   • CA distributed ledger stores data in a single cloud location, while a centralized database is stored on-premises.
   • DA distributed ledger is always faster than a centralized database for every transaction type.
   Reveal Solution Discussion Select an answer first
5. 4application · medium

   An insurance company wants to automate claim payouts for flight delays. They plan to use a smart contract that receives flight status data from an external source and automatically triggers a payment to the policyholder when a delay exceeds a threshold. What is the primary challenge they must address for this to work reliably?

   • AEnsuring the smart contract has enough gas to execute the payment
   • BWriting the smart contract in a language that the blockchain supports
   • CProviding a reliable and trustworthy oracle to feed flight data to the contract
   • DChoosing a consensus mechanism that supports smart contracts
   Reveal Solution Discussion Select an answer first
6. 5foundation · easy

   What is the core purpose of blockchain technology in a decentralized system?

   • ATo replace all existing databases with a single global storage system
   • BTo encrypt all data stored on the internet
   • CTo provide a centralized platform for financial transactions only
   • DTo enable multiple parties to maintain a shared, tamper-resistant record without a central authority
   Reveal Solution Discussion Select an answer first