Blockchain Consensus Mechanisms and Cryptocurrency Trading, Exams of Nursing

Download Blockchain Consensus Mechanisms and Cryptocurrency Trading and more Exams Nursing in PDF only on Docsity! BLOCKCHAIN EXAM 2024/2025 WITH 100% ACCURATE SOLUTIONS Along with being composed of blocks and using a standard protocol, what are three other attributes of a public blockchain? - Precise Answer ✔✔It has a consensus mechanism. It is permissionless. It has no centralized controlling authority To ensure that any block that is added to the chain is legitimate, without having to place trust in an outside entity, such as a bank or governing body, blockchains use a ___________ mechanism - Precise Answer ✔✔consensus A consensus mechanism that involves an algorithm that creates an unpredictable math problem that can only be solved with significant computing power is called a ___ consensus mechanism. - Precise Answer ✔✔proof-of-work (PoW) The first widely used blockchain was created in 2008 to support the cryptocurrency called: - Precise Answer ✔✔Bitcoin A major drawback of the proof-of-work (PoW) consensus mechanism is that it requires large amounts of Blank______ as the blockchain grows. - Precise Answer ✔✔computing power To help ensure the strength of the blockchain, blocks can only be added in certain: - Precise Answer ✔✔time intervals Unlike other large accessible databases that are controlled by corporate entities, such as Netflix or Spotify, public blockchains are hosted on a public ledger, which can be considered a huge database, that stores the data for a blockchain and essentially runs as a peer-to-peer network. This means they have no: - Precise Answer ✔✔controlling central authority Select three blockchain consensus mechanisms. - Precise Answer ✔✔proof-of-work (PoW) proof-of-stake (PoS) proof-of-authority (PoA) The most commonly used consensus mechanism, with the drawback that it requires large amounts of computing power (and electricity) as the blockchain grows, is called the proof-of- consensus mechanism. - Precise Answer ✔✔work An advantage of the Blank______ consensus mechanism is that it forces all participants to act in their own self-interest, allowing for faster transaction times, and not requiring large amounts of computing power. - Precise Answer ✔✔proof-of-stake (PoS) because it can be used as legal tender in some countries such as El Salvador because it can be used to purchase certain items such as Teslas Seeing the success of Bitcoin's blockchain, but wanting to capitalize on the ability to create smart contracts, the developers of the Blank______ blockchain made it more flexible and faster than Bitcoin's blockchain. - Precise Answer ✔✔Ethereum Because it was built on a proof-of-work blockchain, Ethereum (Ethereum 1.0) has ______ gas fees than a proof-of-stake cryptocurrency such as Solana. - Precise Answer ✔✔higher Digital money that is based on a blockchain is called - Precise Answer ✔✔crypto Cryptocurrency creation is determined by the Blank______ used by the blockchain developers. - Precise Answer ✔✔consensus mechanism For purposes of security, wallets are typically accessed through a combination of: - Precise Answer ✔✔public and private keys Some cryptocurrencies have value just because they store value and have a limited number of blocks. The largest cryptocurrency by market cap is . It is limited to 21 million blocks (coins). - Precise Answer ✔✔BTC Choose three methods by which investors buy, sell, and store cryptocurrencies. - Precise Answer ✔✔through the use of a peer-to-peer exchange through a cryptocurrency exchange through the use of wallets To buy, sell, or use cryptocurrency, you must have access to a secure computer code. These codes (private keys) are stored in cryptocurrency - Precise Answer ✔✔wallets A device similar to a USB drive that gives you access to your cryptocurrency is referred to as a cryptocurrency wallet. - Precise Answer ✔✔hardware The software that allows an owner to access a cryptocurrency account is called a private ______This typically grants the owner access to their wallet. - Precise Answer ✔✔key A cellphone app that provides access to a user's cryptocurrency private key is often called a hot or online - Precise Answer ✔✔wallet Writing down your private key and storing it in a secure site is referred to as using: - Precise Answer ✔✔a paper wallet The three main types of cryptocurrency exchanges include: - Precise Answer ✔✔traditional peer-to-peer (P2P) brokerage Select three commonly used types of cryptocurrency wallets. - Precise Answer ✔✔paper wallets hardware wallets online wallets Most cryptocurrency hardware wallets incorporate a small keypad that requires the user to add a Blank______ before accessing their private key (and their cryptocurrency). - Precise Answer ✔✔personal identification number (PIN) Typically, online wallets require the use of a strong password and Blank______ to log into the wallet where your cryptocurrency private keys are stored. - Precise Answer ✔✔two-factor authentication Binance, headquartered in the Cayman Islands, and Mandala Exchange in Malta, are by far the largest __. - Precise Answer ✔✔traditional cryptocurrency exchanges As more and more individuals become increasingly knowledgeable about cryptocurrency trading, P2P cryptocurrency have grown in popularity. - Precise Answer ✔✔exchanges The price of conducting transactions on blockchains is known as the ___. - Precise Answer ✔✔gas fee The biggest risk for cryptocurrency investors remains the extreme of the cryptocurrency market. - Precise Answer ✔✔changes Bitcoin and Litecoin, because they are established proof-of-work (PoW) coins, are considered __. - Precise Answer ✔✔store-of-value coins If you purchase Ethereum (coins), the transaction operates on the Blank______ blockchain, since it is a native coin. - Precise Answer ✔✔Ethereum Aside from a single vulnerability, found and corrected in April 2010, no flaw in the ___ has been discovered. - Precise Answer ✔✔Bitcoin blockchain If you wish to purchase Ethereum (ETH) with your Bitcoin (BTC), you would use wBTC, which stands for a Bitcoin token. - Precise Answer ✔✔wrapped When first executing decentralized financial (DeFi) transactions, developers were paid in Ethereum, which was recorded as GWEI or one- billionth of an Ethereum coin. GWEI became known as ether or simply ___. - Precise Answer ✔✔gas The first major cryptocurrency, Bitcoin, was developed to be an alternative currency that could not be manipulated by any government entity. This is why it is called a store-of- cryptocurrency - Precise Answer ✔✔value The largest cryptocurrency by market capitalization, , is accepted by well over 100,000 merchants. - Precise Answer ✔✔BTC Like Bitcoin and Litecoin, the Dogecoin blockchain is a Blank______ blockchain. - Precise Answer ✔✔proof-of-work (PoW) Developed by Charlie Lee in 2010, the Blank______ blockchain was created to be a faster store-of-value coin than Bitcoin. - Precise Answer ✔✔LTC An asset that retains its worth rather than depreciating over time, such as precious metals and fine art, is an example of ___. - Precise Answer ✔✔store-of-value assets If all parties want to update a smart contract, they have to build an additional contract, called: - Precise Answer ✔✔a proxy contract To remedy the slow transaction time issue associated with PoW blockchains such as Ethereum 1.0 and Bitcoin, ___ blockchains were created, allowing for far faster transactions. - Precise Answer ✔✔PoS Assets are wrapped using Ethereum Request for Comments (ERC) protocols. The most commonly used is the ___, which is generally used for contracts that exchange cryptocurrencies. - Precise Answer ✔✔ERC- 20 protocol Binance's blockchain uses the ___ consensus mechanism. - Precise Answer ✔✔PoA The Litecoin blockchain was created to be a faster store-of-value coin than ___ (BTC). - Precise Answer ✔✔Bitcoin The native cryptocurrency of the Cardano blockchain is called ___ - Precise Answer ✔✔ADA Unlike Bitcoin or Ethereum, which are proof-of-work (PoW) blockchains, Solana (SOL) is a proof-of- (PoS) blockchain. - Precise Answer ✔✔stake In an attempt to reduce cryptocurrency volatility, developers created Blank______, which are pegged or "tethered" to a less volatile asset such as gold or U.S. dollars. - Precise Answer ✔✔stablecoins Select three common means of tethering stablecoins. - Precise Answer ✔✔collateralize with a corresponding currency collateralize with non-currency assets collateralize with cryptocurrency The largest stablecoin by market capitalization is Tether (USDT). Select three true statements regarding smart contracts. - Precise Answer ✔✔Once the parameters of the contract are applied to the blockchain, the contract executes automatically. A smart contract is an agreement where the terms are written on a blockchain. Once a smart contract is written on the blockchain, the contract cannot be changed. Traditional finance (TradFi) uses centralized organizations such as banks and credit unions to facilitate transactions for customers. ___ uses smart contracts built on blockchains. - Precise Answer ✔✔Decentralized finance (DeFi) Select three true statements regarding smart contracts and DAOs. - Precise Answer ✔✔DAO, in this context, stands for decentralized autonomous organization. The DAO governance is decentralized, meaning that any policies must be agreed to by the contributors to the DAO. A DAO (pronounced "dow") allows anyone with an Internet connection to join together on a smart contract to raise funds. Sophisticated applications, built on smart contracts that can be accessed anonymously, are called applications (DApps). DApps operate much like any other app on your smartphone or compute - Precise Answer ✔✔decentralized Which three of the following statements regarding decentralized finance (DeFi) are correct? - Precise Answer ✔✔It uses smart contracts built on blockchains to eliminate the requirement of trust and to reduce transaction fees. Ethereum's blockchain hosts the vast majority of the smart contracts that support DeFi. Ether (gas fees) is the most common medium of exchange in the smart contracts that support DeFi. Which three statements are correct regarding decentralized finance (DeFi)? - Precise Answer ✔✔Currently, most DeFi transactions simply exchange cryptocurrencies. Decentralized Finance (DeFi) remains in its infancy. The biggest beneficiaries of DeFi will likely be those who currently do not have access to traditional banks. The basis of decentralized finance (DeFi) is the contract. - Precise Answer ✔✔smart Blockchains with fast transaction times make DApp development more efficient. DApp stands for decentralized ___. - Precise Answer ✔✔applications Select three true statements regarding the potential impact of decentralized applications (DApps). - Precise Answer ✔✔Decentralized applications (DApps) could potentially replace all centralized apps. One gaming DApp is Alien Worlds, where players can mine or purchase coins called Trilium (TLM) to compete in the Alien World metaverse. One example of a financial DApp is Orca, which is built on the Solana blockchain. Select three true statements regarding NFTs. - Precise Answer ✔✔Most NFTs are pieces of digital art attached to the Ethereum blockchain. Using the Ethereum Request for Comment 721 protocol (ERC-721), a smart contract wraps the digital artwork. NFTs give the owner exclusive rights to use the image.