Securing Blockchain Transactions with Cryptographic Techniques BFC Practice Questions (Page 5)

Questions 21–25

1. 21expert · hard

   A large enterprise is deploying a blockchain solution and must comply with a regulation that requires cryptographic keys to be escrowed so that law enforcement can access data with a court order. However, the security team is concerned that escrowing private keys could increase the risk of mass key compromise. Which approach balances compliance and security?

   • ARefuse to escrow keys and argue that it violates security best practices.
   • BUse a single master key for all users and escrow that key.
   • CUse key escrow with split knowledge, where the key is divided into shares held by multiple independent escrow agents, and require a court order to combine them.
   • DEscrow the private keys with a single government agency as required by law.
   Reveal Solution Discussion Select an answer first
2. 22application · medium

   A developer is designing a wallet that generates addresses from a single master seed phrase. They want to ensure that if one address's private key is compromised, the other addresses in the wallet remain secure. Which approach should they use?

   • AUse the same private key for all addresses to simplify management.
   • BGenerate each address by hashing the master seed with a counter, but store the master seed in plaintext.
   • CUse hierarchical deterministic (HD) wallet derivation with a unique path for each address, so that each private key is derived independently from the master seed.
   • DUse a random private key for each address and store them all in a single file.
   Reveal Solution Discussion Select an answer first
4. 23foundation · easy

   In a blockchain, how does a cryptographic hash function primarily ensure the integrity of transaction data?

   • ABy producing a fixed-size output that changes if the input data changes
   • BBy compressing the data to reduce storage and speed up processing
   • CBy adding a digital signature to each transaction that verifies the sender
   • DBy encrypting the data so that only authorized parties can read it
   Reveal Solution Discussion Select an answer first
5. 24expert · hard

   A blockchain wallet application is vulnerable to a replay attack. An attacker captures a valid signed transaction and rebroadcasts it to a different merchant, causing the same payment to be processed twice. Which mitigation is most effective?

   • AUse a longer digital signature.
   • BAdd a timestamp to the transaction and rely on nodes to reject old transactions.
   • CInclude a unique transaction nonce or sequence number that is checked by the network.
   • DEncrypt the transaction data with the recipient's public key.
   Reveal Solution Discussion Select an answer first
6. 25foundation · easy

   In proof-of-stake (PoS), how is cryptography used to select a validator?

   • AValidators are chosen based on the hash of their public key
   • BValidators are chosen by solving a cryptographic puzzle
   • CValidators are chosen based on the length of their private key
   • DValidators are chosen randomly using a verifiable random function (VRF) and their stake
   Reveal Solution Discussion Select an answer first