Fundamental Concepts and Working Principles of Blockchain Technology BFC Practice Questions (Page 4)

Questions 16–20

1. 16expert · hard

   A blockchain architect is evaluating a permissioned blockchain for a central bank digital currency (CBDC). The design must prevent a malicious validator from rewriting transaction history, but the network has only 7 validator nodes. Which combination of properties is most critical to achieve tamper-evidence and immutability?

   • ACryptographic hash chaining plus a consensus threshold requiring at least 5 of 7 validators to agree on any state change
   • BA single authoritative validator that signs every block, with all other nodes acting as read-only observers
   • CStoring all transaction data off-chain and only keeping hashes on-chain
   • DUsing a longer block interval to give validators more time to verify each block
   Reveal Solution Discussion Select an answer first
2. 17foundation · easy

   How does a private blockchain differ from a public blockchain?

   • AA private blockchain is always faster than a public blockchain
   • BA private blockchain does not use consensus mechanisms
   • CA private blockchain restricts access and participation to a selected group of entities
   • DA private blockchain uses a different cryptographic algorithm than a public blockchain
   Reveal Solution Discussion Select an answer first
4. 18foundation · easy

   What is a smart contract?

   • AA type of cryptocurrency used to pay for blockchain transactions
   • BA legal document that is digitally signed and stored on a blockchain
   • CA self-executing program stored on a blockchain that automatically enforces the terms of an agreement
   • DA consensus algorithm that validates transactions automatically
   Reveal Solution Discussion Select an answer first
5. 19foundation · easy

   How does a distributed ledger improve trust compared to a traditional centralized database?

   • ABy allowing multiple parties to share a single source of truth without relying on a central administrator
   • BBy encrypting all data so that only the central administrator can read it
   • CBy storing data in a single location that is easier to secure
   • DBy using a faster consensus algorithm that eliminates the need for verification
   Reveal Solution Discussion Select an answer first
6. 20foundation · easy

   How can blockchain technology improve efficiency in financial services?

   • ABy storing all financial data in a single centralized database
   • BBy increasing the number of intermediaries required for each transaction
   • CBy reducing the need for intermediaries through automated and transparent processes
   • DBy eliminating the need for any form of transaction validation
   Reveal Solution Discussion Select an answer first