Interoperability in Blockchain Systems BFC Practice Questions (Page 1)

Questions 1–5

1. 1expert · hard

   A consortium of banks is designing a cross-border payment corridor between two blockchain networks with different consensus algorithms (Proof of Work and Proof of Authority). They need to transfer digital assets between the networks with finality guarantees. They are considering a notary scheme with a single trusted notary. What is the most significant security concern with this design?

   • AThe notary becomes a single point of failure and a target for compromise, potentially allowing fraudulent transfers
   • BThe consensus algorithms are incompatible, so the notary cannot verify transactions on either chain
   • CThe notary must be a regulated entity, which is not possible in a blockchain context
   • DThe notary will be unable to handle the transaction throughput required for cross-border payments
   Reveal Solution Discussion Select an answer first
2. 2application · medium

   A payment service provider wants to connect its blockchain-based payment network to traditional banks that use SWIFT. The provider needs to ensure that payment messages are compatible with SWIFT's standards. Which standard should the provider adopt?

   • AISO 20022, which is the standard used by SWIFT for payment messages.
   • BA sidechain protocol for asset transfer.
   • CA custom JSON format for payment instructions.
   • DInterledger Protocol (ILP) to route payments.
   Reveal Solution Discussion Select an answer first
4. 3application · medium

   A decentralized finance (DeFi) platform wants to allow users to deposit collateral from one blockchain and borrow assets on another blockchain. The platform needs to track collateral and issue loans across chains. Which interoperability approach should the platform use?

   • AISO 20022 messaging to communicate between the blockchains.
   • BCross-chain messaging to synchronize collateral and loan states between the two blockchains.
   • COn-chain smart contracts that run on both blockchains independently.
   • DOff-chain APIs to manually transfer data between the blockchains.
   Reveal Solution Discussion Select an answer first
5. 4application · medium

   A development team is implementing a cross-chain bridge that uses a notary scheme. The team is concerned about the risk of the notary being compromised. Which additional mechanism should they implement to mitigate this risk?

   • ARequire multiple notaries to sign off on each transaction using a multisignature scheme.
   • BUse a relay chain to verify the notary's actions.
   • CUse a single notary with a hardware security module (HSM) to protect the private keys.
   • DIncrease the block confirmation time on both chains to reduce the chance of fraud.
   Reveal Solution Discussion Select an answer first
6. 5application · medium

   A developer needs to enable a user to exchange tokens between two blockchains without a trusted intermediary. The developer wants to ensure that the exchange is atomic and that neither party can cheat. Which protocol should the developer use?

   • AA notary scheme with a single notary.
   • BAtomic swaps using hashed timelock contracts (HTLCs).
   • CA relay chain that verifies transactions on both chains.
   • DA sidechain with a centralized peg.
   Reveal Solution Discussion Select an answer first