Eccouncil EC-Council Blockchain Fintech Certification (BFC) 312-82 Exam Practice Test

Answer : A

Decentralized Applications (Dapps) are applications that run on a blockchain network and include embedded governance and business logic rules. Unlike traditional applications, Dapps are decentralized, meaning they operate on a peer-to-peer network rather than a centralized server, leveraging smart contracts to automatically enforce rules and protocols without intermediaries.

Key Details:

Characteristics of Dapps: Dapps are open-source, operate autonomously, and store data on a blockchain. They utilize smart contracts to handle various functions, from transaction processing to enforcing governance rules and executing business logic.

Smart Contracts: The embedded rules within Dapps are typically coded as smart contracts, which are self-executing contracts with the terms of the agreement directly written into lines of code. This ensures that all transactions and operations within the Dapp are transparent, immutable, and automatically enforced.

Use Cases: Dapps are commonly found in areas such as decentralized finance (DeFi), gaming, supply chain management, and social media, offering users more control and transparency compared to traditional applications.

In conclusion, Dapps (A) is the correct answer as it refers to computer programs running on a blockchain with embedded governance and business logic rules.

Answer : D

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.

Answer : A

A hard fork occurs when there is a fundamental change in a blockchain's protocol, resulting in the creation of a new chain that is incompatible with the previous one. After a hard fork, nodes must upgrade to the new version of the blockchain's software to continue participating in the network. A hard fork can be used to implement new features, fix security issues, or change core aspects of the blockchain.

Key Details:

Differences from Soft Forks: Unlike a soft fork, which is backward-compatible and allows nodes on the previous version to still participate, a hard fork splits the blockchain into two distinct paths, with the upgraded path requiring new software.

Examples: Notable hard forks include Bitcoin Cash from Bitcoin and Ethereum Classic from Ethereum. These forks occurred due to disagreements within the community on how to handle certain protocol changes, leading to the creation of separate blockchains.

Upgrade Requirements: Participants on the blockchain who wish to continue on the new chain after a hard fork must update their software. Those who do not upgrade remain on the original chain, which continues as a separate, incompatible blockchain.

Thus, the correct answer is Hard fork (A), as it directly refers to a blockchain split that requires client upgrades for participation.

Answer : A

The right to publish a new block is commonly determined by Proof of Work (PoW) in blockchain networks like Bitcoin. In PoW, network nodes, known as miners, compete to solve a cryptographic puzzle. The first node to successfully solve it gains the right to add a new block to the blockchain.

Key Details:

Proof of Work Mechanism: Miners perform computational work to solve a hash puzzle, which proves that they have expended effort. This process ensures that blocks are added in a way that is resistant to tampering and fraud.

Reward System: The miner who successfully publishes a new block receives a block reward (in Bitcoin, for example), incentivizing miners to participate in maintaining the blockchain network's security.

Alternative Mechanisms: Other consensus mechanisms, such as Proof of Stake (PoS), do not rely on computational work but rather on a node's stake or investment in the blockchain. However, in the context of traditional blockchain models like Bitcoin, PoW is the primary method for determining block publication rights.

Therefore, A. Nodes proof of work is the correct answer, as PoW is the standard method by which nodes earn the right to publish new blocks in many blockchain networks.

Answer : A, B

According to IBM's ''Blockchain for Financial Services'', blockchain offers several benefits, including faster settlement and automated compliance. These features are critical in enhancing the efficiency and reliability of financial services.

Key Details:

Faster Settlement: Blockchain technology enables near-instantaneous settlement of transactions by eliminating the need for traditional intermediaries and reducing processing times, which can speed up transactions significantly compared to legacy systems.

Automated Compliance: Blockchain's transparency and immutability allow for the automatic recording and verification of regulatory requirements. Smart contracts can be used to enforce compliance rules in real-time, ensuring that transactions adhere to regulatory standards without manual intervention.

Impact on Financial Services: These benefits translate to reduced operational costs, improved transaction accuracy, and increased trust between parties, making blockchain an attractive solution for financial institutions.

Thus, A. Faster settlement and B. Automated compliance are the correct answers, as these are specific benefits of blockchain in financial services according to IBM.

Answer : B

A utility cryplet is a component of Microsoft Azure Bletchley that provides essential services, such as encryption and data retrieval from external sources, to support blockchain applications. Bletchley is a Microsoft Azure project designed to enhance blockchain infrastructure by offering middleware services and tools for secure and efficient blockchain solutions.

Key Details:

Purpose of Utility Cryplets: Utility cryplets extend the functionality of blockchain networks by offering off-chain services, which include cryptographic operations, data encryption, and fetching information from external APIs or data sources. This enhances the capabilities of smart contracts by allowing them to securely interact with off-chain data.

Microsoft Azure Bletchley: As part of Microsoft's blockchain ecosystem, Bletchley provides an environment that supports building, deploying, and managing blockchain applications. Cryplets are designed to facilitate secure, reliable, and scalable integration between on-chain and off-chain processes.

Use Cases: Utility cryplets are particularly useful in scenarios where blockchain applications need to access external data (like price feeds, identity verification, etc.) while ensuring data integrity and security.

Therefore, B. A part of Microsoft Azure Bletchley that is used to provide basic services such as encryption and basic data fetching from external sources is the correct answer, as it describes the function and purpose of utility cryplets within the Azure Bletchley project.

Answer : C

Distributed Ledger Technology (DLT) is a broad term used to describe technologies that store, distribute, and facilitate the exchange of value between users, either privately or publicly. DLT encompasses various types of ledgers, including blockchains, where data is replicated, shared, and synchronized across a distributed network.

Key Details:

Definition and Scope: DLT refers to a digital system for recording transactions across multiple locations simultaneously. It allows for decentralized data management and reduces the need for a central authority to maintain a ledger.

Private and Public Ledgers: DLT can be implemented in both private (permissioned) and public (permissionless) networks. In public DLT, anyone can participate, while private DLT restricts access to authorized participants only.

Examples of DLT: Blockchain is one form of DLT, but other types include Directed Acyclic Graphs (DAGs) and Hashgraph. Each of these has unique mechanisms for data storage and consensus.

Therefore, C. DLT is the correct answer, as it is the term that broadly covers technologies used for the exchange and storage of value in distributed systems.