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

Answer : C

Blockchain can greatly benefit the food industry by making 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 transparent is the correct answer, as it highlights blockchain's role in providing transparency in the food industry.

Answer : D

The smallest subunit of Ether is called a Wei. Ether (ETH) is divided into several subunits for precision in transactions, with Wei being the smallest, equivalent to 101810^{-18}1018 Ether.

Key Details:

Subunits of Ether: The Ethereum network uses smaller units to facilitate transactions that require a higher degree of accuracy. The most commonly used subunits are Gwei (billion Wei), but Wei represents the smallest possible division.

Importance in Transactions: Wei ensures that Ether can be broken down into very small units, allowing for microtransactions and precise gas calculations, which are essential in smart contract executions.

Naming Convention: This denomination was named in honor of Wei Dai, a cryptographer who proposed b-money, an early concept of digital currency.

Therefore, D. Wei is the correct answer, as it is the smallest unit of Ether.

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 : D

Smart Contracts are self-executing programs that automate transactions and eliminate the need for intermediaries. They operate on blockchain networks and are coded to execute specific actions when predetermined conditions are met.

Key Details:

Transaction Automation: Smart contracts automatically execute the terms of a contract once the agreed-upon conditions are fulfilled. This reduces manual processing and ensures transparency and trust between parties.

Elimination of Intermediaries: By running on a decentralized network, smart contracts eliminate the need for third-party intermediaries, such as lawyers or notaries, reducing transaction costs and increasing efficiency.

Application Across Industries: Smart contracts are used in various sectors, from finance and supply chain to insurance and real estate, due to their ability to enforce terms without human intervention.

Therefore, D. Smart contracts is the correct answer, as they facilitate automated transactions and remove the need for intermediaries.

Answer : B

Brain Wallets derive private keys from a passphrase. This approach allows users to create a wallet by memorizing a unique phrase, which is then hashed to generate the corresponding private key.

Key Details:

Use of Passphrases: Brain wallets use a passphrase that is entered by the user, typically a string of words that can be remembered easily. This passphrase is then converted into a private key using a cryptographic hash function.

Security Concerns: While convenient, brain wallets are susceptible to brute-force attacks if the passphrase is not sufficiently complex. Simple or common phrases may be vulnerable to attackers who use lists of common phrases to derive potential private keys.

Distinction from Deterministic Wallets: Unlike Hierarchical Deterministic Wallets, which use a seed phrase to generate a tree of keys, brain wallets derive a single private key directly from a passphrase.

In conclusion, B. Brain Wallets is the correct answer, as these wallets use a passphrase to generate the private key.

Answer : B

Hyperledger Fabric is designed to provide a foundation for developing blockchain solutions with a modular architecture. Fabric, a project under the Hyperledger umbrella by the Linux Foundation, offers flexibility through its pluggable components, enabling enterprises to tailor blockchain networks according to their specific requirements.

Key Details:

Modular Architecture: Hyperledger Fabric supports modular plug-ins for various functions, including consensus, identity management, and privacy settings. This allows organizations to customize the blockchain to suit their operational needs.

Permissioned Network: Fabric is a permissioned blockchain, meaning that it restricts network participation to authorized entities, which is ideal for enterprise use cases that require confidentiality and controlled access.

Enterprise-Grade Features: Fabric's architecture is well-suited for complex business processes, providing features like private data collections, which allow subsets of participants to create private channels for transactions.

Thus, B. FABRIC is the correct answer, as it is specifically developed to support modular, enterprise-grade blockchain solutions.

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.