Blockchain Foundations Exam

What historical event is noted in the bitcoin genesis block?

Enron scandal of 2001
Financial crisis of 2008
The first purchase of an item using bitcoin
The initial deposit of funds in a bitcoin ATM
The issuance of fake accounts by Wells Fargo

What trends significantly impacted bitcoin adoption?

The breakup of the Soviet Union
Terrorism and organized crime
Distrust of large institutions and sweeping populist movements calling for more decentralization
Distributed and cloud computing
The growth of video games and online gambling

What is Bitcoin Pizza Day?

The day a pizza delivery driver found the original bitcoins on a hard drive
The day a bitcoin was made to look like a pizza pie
The day the bitcoin price first hit $3.14
The first pizza restaurant was sold for 100 bitcoins
The first purchase of an item using Bitcoin was 10,000 Bitcoins for two pizzas

How many cryptocurrencies and tokens are listed on public websites?

Less than 100
101-250
251-1000
1,000 – 2000
More than 2,000

What is a way that the energy industry can benefit from blockchain?

Blockchain allows energy companies to consolidate energy collection & distribution.
Blockchain energy projects are more easily financed by non-government organizations (NGs)
Blockchain does not have any application to the energy industry.
Illicit energy trading is limited or prohibited by blockchain.
Tokenizing energy can improve the transmission and distribution system stability.

How does blockchain support the intellectual property (IP) rights for inventions, artistic works, and scientific findings?

Recording proof of authorship on a time-stamped immutable record proves the claim that someone was in possession of IP at a defined point in time.
Blockchain ensures simultaneous registration at the US Patent & Trade Office & other global IP registration entities
Blockchain is the only way that intellectual property can be recorded with a date/time stamp that will be recognized global.
Artist can use Non-Fungible Tokens (NFTs) to prohibit any other artist from making a creative claim to the artwork
Patents for inventions recorded on a blockchain are approved 20% faster than traditional patent applications.

What is a way that law enforcement professionals are using the blockchain to enforce laws?

Law enforcement professionals trade cryptocurrency to augment their incomes.
Informants are paid in cryptocurrency to hide their tracks and to protect anonymity
Artificial intelligence is used to identify patterns of financial transactions indicating criminal activity like human trafficking and drug smuggling.
Blockchain is used as a secured messaging platform to communicate with undercover law enforcement officers
Court records are sealed onto blockchains for historical records

In what way is identity management and blockchain related?

Blockchain supports the decentralization of identity management
All blockchains are required by law to comply with identity management requirements like Know-Your-Customer (KYC) and Anti-Money Laundering (AML).
Blockchains enable all identities to be registered to prevent identity theft
Government agencies use blockchain to issue licenses and permits. These blockchains provide the infrastructure for managing identity.
Hospitals use blockchains to record birth certificates and issue identifications

Why is supply chain management a good use for blockchain technology

Blockchain breaks up the monopolies of large companies.
The global pandemic has disrupted supply chains.
Blockchain supports sharing data between untrusted supply chain participants
Multinational shipping companies have the financial resources to deploy global blockchain solutions.
Both, blockchain is a supply chain.

Which of the following describes why supply chain management is a good use for smart contracts

Smart contracts allow evasion of taxes and fees, minimizing the cost of doing business.
Smart contracts require Freight Forwarders and shipping terminals to modernize their equipment.
Supply chain managers need smart legal agreements to protect against unexpected losses.
Smart contracts are not appropriate for supply chain because most entities are still paper based.
Smart contracts can execute payments and activities based on receipt, events and conditions.

Blockchain-based voting solutions have been used in which kind of elections?

Municipal & congressional, but not national presidential elections
Municipal elections, congressional elections, and presidential elections.
Political party primary and municipal elections, but not congressional nor presidential elections
Union and corporate elections, but not government elections
High school, college, and corporate elections. But not government elections.

Which of the following statements describe how blockchain technology could improve the voting process?

Blockchain makes it much more difficult to change election data after it has been written to the blockchain.
Blockchain technology could bridge jurisdictional databases and validate that voter are not eligible to vote in more than one jurisdiction.
Blockchain technology supports real-time ballot tabulation, improving confidence in the outcome of an election.
All the above

How does encryption protect information

Encryption breaks up information and distributes it to many nodes, making it almost impossible to identify, retrieve, assemble, and read the information.
Encryption uses an algorithm to randomly scramble messages and requires a key to unscramble the information.
Encryption makes copies of the data and records it in so many places that if anyone attempted to modify the data, it would be Immediately detected.
Encryption provides three individuals or nodes with a secret key. At least two of the keys are required to access, modify, or read the data.
Encryption cannot protect information, everything is hackable.

What are some commonly used consensus mechanisms used in blockchains?

Proof of investment, proof of encryption, and proof of anonymity
Proof of cyber security, proof of decentralization, proof of network bandwidth, and proof of distribution
Proof of ownership, proof of privacy, proof of geography, and proof of source code
Proofs of validation, proofs of authentication, proof of remediation, and proof of bandwidth
Proofs of work, proof of stake, & proof of bandwidth

Which protocol is NOT used by any blockchains?

Proof of investment
Proof of stake
Proof of bandwidth
Proof of ownership
Delegated proof of stake

What is the transaction database in the bitcoin network?

The reporting tool that is required by some governments to record all transactions over $10k
A database that records the amount, date, transaction amounts, and identities of all transactions on a blockchain
A database required to be maintained by all registered cryptocurrency exchanges
The bitcoin network does not use a transaction database.
The transaction database maintains the unspent balance for each transaction output.

What is Byzantine fault-tolerance

A method of ensuring consistency in a distributed network
Ensuring all records are historically accurate
A method to error check inputs before the information is presented for consideration
A method to assign responsibility to an actor to correct faults
A threshold for errors before a computer process is shut down or terminated

What portion of nodes of the bitcoin blockchain are required to accept a newly minted block?

>10%
>25%
>50%
>66%
>99%

What is a soft fork?

A minor instance of a Hard Fork
When less than 5% of the nodes of a blockchain change the protocol, forking the blockchain
A soft fork is temporary suspension of a portion of the blockchain.
When network latency or two miners simultaneously mint a new block, causing a fork in the blockchain
When one or more blockchain participants Forge an Operational Retroactive Key (FORK)

What is a blockchain protocol?

A TCP/IP protocol that uses HTTP to record balances in a distributed ledger
A set of rules that facilitates communication between various nodes of a blockchain network to maintain the status of the data organized into blocks.
The code that defines how the bitcoin network issues block rewards to miners
A set of norms that describes how people should behave when trading bitcoins in an unregulated environment
A computer language that connects all of the blockchains together that allows interoperability between blockchains

Which of the following statements about cryptocurrencies are false?

There are many different types of cryptocurrencies with various performance and functional uses.
Cryptocurrencies fall into 3 main categories: tokens, stablecoins, and altcoins
Hundreds of Tokens have already been created and are now available for use.
The BTC standard is the most used for Altcoins because many exchanges support them.
Cryptocurrency adoption is a function of ease of use, regulatory stability, and inflation considerations.

What is an Altcoin?

Altcoins mask information about each transaction.
The BTC standard is the most used for Altcoins.
Monero and Zcash are the two Altcoins.
Non-cryptocurrency tokens
Altcoins are any digital token other than bitcoin.

What factors impact adoption of cryptocurrency?

Cryptocurrency adoption is influenced by the ease of use.
Cryptocurrency adoption is influenced by regulatory barriers.
Cryptocurrency adoption is influenced by the inflation considerations (should people spend or hold cryptocurrency).
Cryptocurrency adoption is influenced by news & media coverage.
All of the above

What is Tokenomics?

Tokenomics is a slang term for the cannabis supply chain.
Tokenomics is the science of the token economy.
One of the most critical tasks of Tokenomics is to enable a DAO to operate.
Tokenomics is the exchange system between differing tokens.
Tokenomics states that holders of a token do not automatically gain rights to vote. Voting rights only go to 'nodes'.

What is the difference between an exchange and a wallet?

Exchanges allow the holder to be connected to the internet and are vulnerable to cyber criminals. Wallets are not connected to the internet and cannot be hacked.
Coinbase and Gemini are exchanges, whereas BitMat and Kraken are wallets.
An exchange facilitates the trading of one type of asset for another. A wallet facilitates the receiving, storage, and sending of a token.
Cryptocurrency can be traded peer to peer, without an exchange. But private wallets are necessary to hold cryptocurrency.
All digital assets, including digital art, can be held on a wallet, whereas only supported crypto can be transferred on an exchange.

Governance of a token includes which of the following?

Token creation, lock-up, and distribution
Establishment of token rules, algorithms, and dispute resolution process
Reporting transactions to tax authorities
Complying with local, state/provincial, and national laws and regulations
Token creation, lock-up, distribution, and disposal (burn)

What is a blockchain ecosystem?

A blockchain ecosystem consists of the nodes and the holders of digital assets that interact according to program.
A blockchain ecosystem is all the individual, and organizational actors as well the technology that are related to the functioning of a blockchain.
A blockchain ecosystem is the digital environment in which the nodes holding that program, exist.
A blockchain ecosystem is the system that allows money to funnel through a blockchain process.
The blockchain & items that issue carbon offsets for energy usage

Which of the following is NOT a regulatory consideration for blockchain solutions.

Record retention
Privacy
Public adoption
Securities law
Tax codes

What impact does the classification of cryptocurrency as “property” by tax authorities have?

Cryptocurrency cannot be taxed the same way as other assets, such as cars and boats.
Taxes are due anytime you sell, trade, or dispose of cryptocurrency in any way.
All cryptocurrency losses must show up on a Form 1042 as either short-term or long-term capital losses.
Cryptocurrencies do not represent "tangible personal property"
It means that taxpayers must track their buy/sell prices and dates to report capital gains/losses

What is a Money Service Business (MSB) and how is it related to blockchain projects? (check all that apply)

An MSB is a money exchange business that must develop an anti-money laundering system to verify customer identification, source of money, and intention.
An MSB is any business that deals with the holding and exchanging of money & must comply with FinCEN regulations.
An MSB is a money exchange business that must follow all FinCEN rules and keep accurate records of all transactions for ten years
An MSB is a money exchange business where one type of money, (fiat), is exchanged for a different type of money (cryptocurrency), outside the purvey of any government authority.
An MSB is a money exchange business and does not work with blockchain projects.

What does FinCEN stands for?

Financial Center Enforcement Network
Financial Centers
Finance Central
Financial Crimes Enforcement Network
Financial Center for Electronic Networking

What is an ICO?

An ICO means minting a coin and offering it to the public for sale.
An ICO is an International Coin Option, allowing tokens to cross international boundaries.
An ICO is a coin, created solely for outside investors, allowing them to buy into a company as stockholders.
An ICO is similar to a Utility Token, which can be used as currency within a closed community.
An ICO is a rewards-based token, given to those who contribute to an ecosystem.

What is the Howey Test

The Howey Test determines if an investment is made with the hopes of earning a dividend through skilled work.
The Howey Test was developed to check for illegal money laundering.
The Howey Test proves whether an investment is legal or illegal.
The Howey Test was developed by the SEC to recognize and stop mafia money laundering.
A test established by the SEC to determine if an offering is a security

What was “The DAO Hack”?

Mr. Charlie DAO (AKA "the snowman") hacked into a pentagon blockchain and stole secret national security data.
An exploitation of a vulnerability that allowed someone to withdraw $70 million from a decentralized venture capital fund.
A decentralized organization of cybersecurity hackers that publicly report vulnerabilities of decentralized exchanges
A common term for anytime a decentralized autonomous organization has been hacked
A computer virus that infects decentralized exchanges by redirecting 0.00001 token from each transaction to the hacker’s wallet address

Which healthcare activity may significantly benefit from blockchain?

Clinical Trials
Insurance Claims Processing
Pharmaceutical Supply Chain
Consent Management
All the above

Blockchain Foundations Exam

Blockchain Foundations Exam

Ashley E Cribb October 21, 2023

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