Self-executing computer programs which facilitate transaction automation and eliminates the need
for intermediaries are called what?
D
Explanation:
Smart Contracts are self-executing computer programs that automatically enforce, verify, and
facilitate the terms of a contract when certain conditions are met. These programs run on blockchain
networks and eliminate the need for intermediaries by automating transactions based on predefined
rules coded into the contract.
Key Details:
Automation and Trust: Smart contracts are crucial in blockchain technology because they enable
trustless transactions, meaning parties can transact directly without relying on intermediaries. The
code controls the execution, and transactions are transparent and irreversible.
Use Cases: Smart contracts are foundational to decentralized finance (DeFi) applications, supply
chain management, digital identity, and more. They facilitate various operations such as lending,
borrowing, insurance, and automated asset transfers.
Example in Ethereum: Ethereum popularized smart contracts by providing a platform with Turing-
complete scripting capabilities. This allowed developers to create sophisticated decentralized
applications that execute on the blockchain.
In conclusion, D. Smart contracts is the correct answer as it refers to the technology that automates
transactions and eliminates the need for intermediaries.
Which of the following is a language for working with Ethereum?
C
Explanation:
Solidity is the primary programming language used for developing smart contracts on the Ethereum
blockchain. It is a statically typed, high-level language similar to JavaScript and C++, and it is
specifically designed for creating contracts that run on the Ethereum Virtual Machine (EVM).
Key Details:
Purpose of Solidity: Solidity was created by the Ethereum team to enable the development of smart
contracts that automate the execution of blockchain-based applications. Its syntax is designed to be
familiar to developers experienced in other programming languages, which helps in onboarding and
learning.
Compatibility and Flexibility: As a Turing-complete language, Solidity allows for the development of
complex smart contracts and decentralized applications (DApps) with conditional logic, loops, and
more. It is widely used in the DeFi space and beyond.
Ethereum Test Networks: Other options listed, such as Rinkeby and Kovan, refer to Ethereum test
networks where developers test smart contracts, but they are not languages themselves. Mist is an
Ethereum wallet interface, not a programming language.
Thus, C. Solidity is the correct answer, as it is the language specifically designed for working with
Ethereum smart contracts.
A Type II DAPP is categorized by its______
B
Explanation:
A Type II DApp is a decentralized application that uses both the blockchain and protocol of a Type I
DApp. Type I DApps are the foundational blockchain-based platforms, such as Ethereum, that operate
with their own blockchain. Type II DApps build on these platforms, using the existing blockchain and
protocol, but offering specific functionalities or services.
Key Details:
Type I DApps: These are fundamental blockchain platforms, like Bitcoin or Ethereum, which have
their own blockchain and provide a foundation for other applications.
Characteristics of Type II DApps: Type II DApps leverage the infrastructure of Type I DApps but add
additional functionality through smart contracts or protocols. For example, protocols such as ERC-20
tokens or ERC-721 NFTs are built on Ethereum and utilize Ethereum's underlying blockchain and
consensus protocol.
Integration: By utilizing both the blockchain and protocol of a Type I DApp, Type II DApps inherit the
security, decentralization, and features of the underlying Type I platform, which simplifies their
development and ensures compatibility.
In summary, B. Using the blockchain and protocol of a type I accurately describes the categorization
of Type II DApps.
_________change the blockchain layout from a linearly sequential model.
D
Explanation:
Tree Chains modify the standard blockchain structure from a linear sequence to a tree-like structure,
where blocks can have multiple branches instead of forming a single sequential chain. This structure
can improve scalability and enable parallel processing, as multiple chains can be validated
simultaneously.
Key Details:
Tree Structure: In tree chains, blocks can have multiple child blocks, which allows transactions to be
processed across several branches concurrently. This reduces bottlenecks associated with linear
block validation and enhances throughput.
Benefits Over Linear Chains: Traditional blockchain models process blocks in a strict sequence. Tree
chains allow for more flexibility and higher transaction throughput, as multiple blocks can be
validated simultaneously across different branches.
Use Cases: This structure is advantageous for complex applications that require parallel transaction
processing, such as large-scale blockchain networks or systems needing high transaction speeds.
Thus, D. Tree chains is the correct answer, as it refers to the blockchain model that diverges from a
linear structure.
According to a study be Deloitte, which of the following are benefits of blockchain for the insurance
industry (pick two)?
A, D
Explanation:
According to studies conducted by Deloitte and other industry research, blockchain offers several
benefits for the insurance industry, particularly in more efficient claims processing and lower costs.
Blockchain’s capabilities in data immutability, transparency, and automation play key roles in
streamlining insurance processes and reducing operational expenses.
Key Details:
Efficient Claims Processing: Blockchain enables quicker verification and processing of claims by
automating workflows through smart contracts. This reduces paperwork, minimizes errors, and
speeds up the claims process, improving customer satisfaction.
Lower Costs: By reducing intermediaries and leveraging automation, blockchain lowers
administrative costs. It minimizes the need for manual verification and fraud detection, which
traditionally consume significant resources in the insurance industry.
Transparency and Fraud Reduction: Blockchain provides an immutable and transparent record of all
transactions. This helps prevent fraud, as all stakeholders have access to the same data, reducing
discrepancies and the need for extensive audits.
In conclusion, A. More efficient claims processing and D. Lower costs are the correct answers, as
these are key benefits of blockchain for the insurance industry identified in Deloitte’s research.
The Financial Action Task force defines virtual asset service providers as companies that (choose
two):
CD
Explanation:
According to the Financial Action Task Force (FATF), Virtual Asset Service Providers (VASPs) are
entities or companies that facilitate activities related to virtual assets. Specifically, VASPs include
businesses that exchange virtual assets for fiat currency and transfer virtual assets. These activities
are regulated to prevent money laundering, terrorist financing, and other illicit activities.
Key Details:
Exchange of Virtual Assets for Fiat Currency: VASPs often act as intermediaries that enable the
conversion between virtual assets (like cryptocurrencies) and traditional fiat currencies. This function
is central to enabling liquidity and usability of cryptocurrencies within the traditional financial
system.
Transfer of Virtual Assets: VASPs may also provide services that involve the transfer of virtual assets
from one user to another, which includes activities such as facilitating peer-to-peer transactions,
wallet services, or custodial services.
FATF Standards and Compliance: The FATF has established guidelines for VASPs to enhance
transparency and ensure compliance with Anti-Money Laundering (AML) and Counter-Terrorist
Financing (CTF) regulations.
Thus, the correct answers are C. Exchange virtual assets for fiat currency and D. Transfer virtual
assets, as these are the core activities defined for VASPs by the FATF.
The financial Action Task force defines virtual asset providers as companies that (choose two):
C, D
Explanation:
The Financial Action Task Force (FATF) defines Virtual Asset Service Providers (VASPs) in its guidelines
to include entities that engage in the exchange of virtual assets for fiat currency and the transfer of
virtual assets. This categorization is part of the FATF's efforts to regulate and monitor the flow of
virtual assets to mitigate risks associated with illicit activities.
Key Details:
Exchange and Conversion Services: FATF recognizes companies that offer exchange services between
virtual assets and fiat currencies as VASPs. These services are critical for converting virtual assets into
forms that can be readily used in traditional markets.
Transfer Services: VASPs that facilitate the transfer of virtual assets are also within the FATF’s
regulatory scope. This includes services that manage, transfer, or act as intermediaries in the
movement of virtual assets between users, ensuring these transactions are conducted transparently
and within regulatory frameworks.
Therefore, C. Exchange virtual assets for fiat currency and D. Transfer virtual assets are the correct
answers, as they align with the FATF's definition of VASPs.
A________represents a transfer of value from one address to another, Transaction in a blockchain
network can be defined also as a record of an event or the ‘’transfer of value from one account to
another’’
D
Explanation:
In blockchain terminology, a transaction represents the transfer of value from one address to
another. Each transaction is recorded on the blockchain as an immutable entry, often representing a
movement of digital assets or a record of an event.
Key Details:
Nature of Transactions: A blockchain transaction involves a digital asset or token being sent from one
blockchain address (wallet) to another. The transaction is broadcast to the network, validated by
nodes, and then recorded on the blockchain ledger.
Transfer of Value: Blockchain transactions serve as proof of the transfer of value, which could
represent cryptocurrency movement, digital asset exchange, or a specific record of an event,
depending on the blockchain’s purpose.
Inclusion in Blocks: Each transaction is grouped into blocks, which are then cryptographically linked
together, forming the blockchain. This ensures all transactions are secure, traceable, and verifiable.
Thus, D. Transaction is the correct answer, as it describes the fundamental concept of transferring
value on a blockchain.
When using __________ the chain of ownership is established by a chain of digital signatures as each
owner signs when transferring ownership.
D
Explanation:
The UTXO (Unspent Transaction Output) model establishes a chain of ownership by using digital
signatures. In this model, each transaction consists of inputs (from previous UTXOs) and outputs
(new UTXOs), and ownership is transferred by the current owner signing the transaction. This digital
signature is then verified by the recipient, ensuring a secure and traceable chain of ownership.
Key Details:
Functionality of UTXO: UTXO is a fundamental part of Bitcoin’s transaction model. When a
transaction occurs, it consumes previous outputs as inputs, generating new UTXOs. Each UTXO can
only be spent once, and ownership is verified through cryptographic signatures.
Chain of Ownership: The UTXO model inherently creates a clear and verifiable chain of ownership, as
each output is signed by the current owner and used as input for future transactions, maintaining a
continuous and transparent record of asset transfers.
Security through Digital Signatures: UTXO-based transactions rely on digital signatures to
authenticate and authorize asset transfers, ensuring that only the rightful owner can initiate a
transaction.
Thus, D. UTXO is the correct answer, as it accurately describes the model where ownership is
established through a chain of digital signatures.
These wallets contain randomly generated private keys and are also called just a bunch of key
wallets.
C
Explanation:
Non-Deterministic Wallets, also known as "Just a Bunch of Keys" (JBOK) wallets, contain randomly
generated private keys that are not derived from a single seed. In this type of wallet, each key is
created independently and must be backed up individually, as there is no way to recover keys
through a mnemonic seed phrase.
Key Details:
Random Key Generation: Non-Deterministic wallets generate private keys independently, without a
hierarchical or sequential structure. As a result, each key is standalone, and losing a key means losing
access to the corresponding funds permanently.
Backup Requirements: Since each key is unique and unrelated, Non-Deterministic wallets require
separate backups for each key. This differs from Hierarchical Deterministic wallets, which can be
restored using a single seed phrase.
Use Case: These wallets were more common in the early days of cryptocurrency, but they are less
favored today due to the convenience and recoverability provided by deterministic wallets.
In conclusion, C. Non-Deterministic Wallets is the correct answer, as it refers to wallets that contain
randomly generated private keys and are known as JBOK wallets.