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EC-COUNCIL EC-Council Blockchain Fintech CertificationB|FC exam Sample Questions (Q18-Q23):
NEW QUESTION # 18
Public blockchains most often use________ as a consensus mechanism.
Answer: A
Explanation:
Public blockchains most commonly useProof of Work (PoW)as their consensus mechanism, especially in well-established networks such as Bitcoin and, until recently, Ethereum. PoW is a protocol that relies on network participants (miners) solving complex mathematical problems to validate and add transactions to the blockchain. This process ensures the integrity and security of the network, as it requires substantial computational power and resources, making it difficult for any single entity to control the blockchain.
Key Details:
* Proof of Work (PoW): PoW, used primarily by Bitcoin, operates by having participants (often referred to as miners) compete to solve cryptographic puzzles. The first to solve the puzzle adds the next block of transactions to the blockchain and is rewarded with newly minted coins. This system is energy- intensive but is widely recognized for its security and resistance to tampering.
* Transition in Other Networks: While Ethereum initially used PoW, it transitioned toProof of Stake (PoS)in 2022 with Ethereum 2.0, due to PoS's lower energy requirements and increased scalability.
However, Bitcoin, the most prominent public blockchain, still relies on PoW.
* Other Consensus Mechanisms: Alternatives such asProof of Stake (PoS)andProof of Burn (PoB)are used by other blockchain networks that aim for different trade-offs in terms of energy efficiency, scalability, and security.Proof of Elapsed Time (PoET)is another mechanism mostly associated with permissioned (private) blockchains rather than public blockchains.
* Why PoW for Public Blockchains?: Public blockchains prioritize decentralization and security. PoW provides a robust way to achieve this, despite its high energy consumption. Its high level of security and historical success in Bitcoin's network often make it the go-to choice for public blockchains.
In summary, the dominance of PoW in public blockchains is due to its established security and proven track record, although PoS and other mechanisms are increasingly gaining popularity for their efficiency in newer blockchain projects.
NEW QUESTION # 19
What is the primary way blockchain could help in the food industry?
Answer: C
Explanation:
Blockchain can greatly benefit the food industry bymaking transactions more transparent. By recording each transaction in an immutable ledger, blockchain enables traceability, which is crucial for food safety, quality control, and ensuring that products meet regulatory standards.
Key Details:
* Traceability: Blockchain allows for the tracking of food products from farm to table. Each step in the supply chain can be recorded on the blockchain, providing consumers and regulators with transparent information about the origin and journey of food products.
* Improving Trust and Safety: With transparent transactions, stakeholders can quickly identify and address issues such as contamination, fraud, or mislabeling, which enhances food safety and consumer trust.
* Enhanced Efficiency: By reducing paperwork and enabling digital record-keeping, blockchain streamlines the process of verifying and sharing information about food products across various parties.
Thus,C. Making transactions more transparentis the correct answer, as it highlights blockchain's role in providing transparency in the food industry.
NEW QUESTION # 20
According to FinCEN what dictates the obligations of money transmitters?
Answer: A
Explanation:
According to theFinancial Crimes Enforcement Network (FinCEN), the obligations of money transmitters are determined primarily bythe business modelof the company. FinCEN regulations stipulate that companies engaged in money transmission services must comply with Anti-Money Laundering (AML) and Counter- Terrorism Financing (CTF) regulations, based on how they conduct their business rather than on their industry designation or self-description.
Key Details:
* Regulatory Basis: FinCEN's guidelines are focused on the activities of the business-specifically, whether it facilitates the transfer of money or currency on behalf of others. This regulatory approach ensures that companies involved in money transmission are subject to appropriate oversight, regardless of their industry.
* Activities Over Labels: Even if a company does not advertise itself as a money transmitter, it may still be subject to FinCEN regulations if its business operations fit the criteria for money transmission services.
* Compliance Requirements: Money transmitters must register with FinCEN and implement AML/CTF measures to prevent illicit activities, aligning their compliance obligations with the nature of their operations.
Thus,C. The business modelis the correct answer, as FinCEN focuses on the activities a company performs when determining regulatory obligations.
NEW QUESTION # 21
Which of the following are likely use cases for blockchain in the energy industry? (Select two.)
Answer: A,C
Explanation:
Blockchain technology has significant potential in the energy industry, particularly inenergy tradingand smart power grids. By providing a transparent, decentralized, and secure platform for transactions, blockchain can facilitate peer-to-peer energy trading and improve the efficiency and reliability of smart grids.
Key Details:
* Energy Trading: Blockchain enables peer-to-peer energy trading where individuals and companies can buy and sell excess energy (such as solar or wind power) directly to each other. This decentralized model reduces the need for intermediaries and allows consumers to benefit from direct energy sales and purchases.
* Smart Power Grids: Blockchain can enhance smart grid systems by enabling real-time data sharing and automated decision-making. With blockchain, smart grids can securely record and share data related to energy production, consumption, and storage, thereby improving grid management, reducing waste, and optimizing energy distribution.
* Enhanced Transparency and Security: By recording all transactions in an immutable ledger, blockchain ensures transparency and security, reducing the risks of fraud and discrepancies in the energy market. This is especially beneficial in energy trading where trust and accurate record-keeping are essential.
Thus,Energy trading (B)andSmart power grids (D)are the most likely use cases for blockchain in the energy industry.
NEW QUESTION # 22
_______implements the interledger protocol, which facilitates interoperability across different distributed and non-distributed ledger networks.
Answer: C
Explanation:
The answer is(C) Quilt.
Hyperledger Quilt is a Java implementation of the Interledger Protocol (ILP). ILP is designed to transfer value across different ledgers, whether they are distributed ledgers (like blockchains) or traditional non-distributed ledgers.
Here's why the other options aren't the best fit:
* Composer:Hyperledger Composer was a tool for building blockchain applications, but it has been deprecated.
* Cello:Hyperledger Cello aims to provide a modular blockchain platform, making it easier to deploy and manage blockchain networks.
* Caliper:Hyperledger Caliper is a benchmarking tool used to measure the performance of different blockchain implementations.
Quilt's primary function is to enable interoperability between different ledger systems, which is crucial for the broader adoption and integration of blockchain technology.
NEW QUESTION # 23
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