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EC-COUNCIL EC-Council Blockchain Fintech CertificationB|FC exam Sample Questions (Q51-Q56):

NEW QUESTION # 51
The Financial Action Task force defines virtual asset service providers as companies that (choose two):

A. Purchase virtual currency
B. Sell products for virtualcurrency
C. Exchange virtual assets for fiat currency
D. Transfer virtual assets

Answer: C,D

Explanation:
According to theFinancial Action Task Force (FATF),Virtual Asset Service Providers (VASPs)are entities or companies that facilitate activities related to virtual assets. Specifically, VASPs include businesses thatexchange virtual assets for fiat currencyandtransfer 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 areC. Exchange virtual assets for fiat currencyandD. Transfer virtual assets, as these are the core activities defined for VASPs by the FATF.

NEW QUESTION # 52
Proof of work algorithms are best described as being used for what?

A. Bitcoin mining
B. Proof that adequate computational resources have been sent.
C. Executing transactions
D. Proving the user has invested enough in the system

Answer: B

Explanation:
Proof of Work (PoW)algorithms are primarily used to demonstrate that sufficient computational resources have been expended by a participant to validate transactions and add them to the blockchain. In PoW, miners compete to solve a cryptographic puzzle, which requires significant computational power. This effort helps secure the network by making it prohibitively expensive for any individual or group to alter the blockchain's history.
Key Details:
* Mechanism of PoW: The essence of PoW is to prove that a certain amount of computational work has been performed. This "work" is measured by the effort miners invest in solving the cryptographic puzzle. The process requires miners to find a nonce that, when hashed with the block's data, results in a hash that meets the network's difficulty requirements.
* Security and Integrity: By proving computational work, PoW ensures that miners cannot simply fabricate or alter transactions without a significant investment of resources. This mechanism deters attacks and makes blockchain networks resistant to tampering and double-spending.
* Association with Bitcoin Mining: Although PoW is often associated with Bitcoin mining (as miners expend computational resources to validate and record transactions), its broader purpose is to establish a cost for participation in the network, ensuring that all entries to the blockchain are trustworthy and secure.
Therefore, PoW is best described as a mechanism for proving that adequate computational resources have been expended, aligning with the correct answer B.

NEW QUESTION # 53
_______uses a Trusted Execution environment (TEE) to provide randomness and safety in the leader election process via a guaranteed wait time.

A. PoET
B. PoD
C. Pol
D. PoA

Answer: A

Explanation:
Proof of Elapsed Time (PoET)is a consensus mechanism that uses a Trusted Execution Environment (TEE) to ensure randomness and safety in the leader election process by enforcing a guaranteed wait time.
Developed by Intel, PoET is particularly used in permissioned blockchain networks where a TEE can securely run code to determine which node is elected to propose the next block. This mechanism is efficient in terms of energy consumption and provides a fair method for selecting a leader without requiring intensive computational power.
Key Details:
* Role of TEE in PoET: The TEE ensures that nodes wait for a random period before being eligible to propose a new block. This waiting period is verified by the TEE, which acts as a trusted third party to confirm that nodes have adhered to the assigned wait time.
* Randomness and Security: PoET provides randomness in the leader selection process, reducing the chances of any node gaining an unfair advantage. It also promotes security by leveraging the TEE, which is designed to prevent tampering with the waiting time calculations.
* Use Cases: PoET is mainly used in permissioned blockchain environments like Hyperledger Sawtooth, where nodes are pre-approved, and there is a need for a scalable yet secure consensus mechanism.
In summary, PoET is the correct answer as it directly refers to a consensus mechanism that utilizes a Trusted Execution Environment for leader election.

NEW QUESTION # 54
______is designed to allow easy deployment of bloodchains.

A. Quit
B. Caliper
C. Composer
D. Cello

Answer: D

Explanation:
Hyperledger Cellois designed to facilitate the deployment and management of blockchain networks. It provides an easy-to-use framework for creating, managing, and scaling blockchain networks, making it suitable for rapid deployment and operation. Although the term "bloodchains" might be a typo or intended for
"blockchains," Cello indeed simplifies the blockchain setup process for various applications.
Key Details:
* Deployment and Management: Cello offers a suite of tools that automates blockchain deployment, operation, and monitoring, making it accessible for businesses looking to adopt blockchain technology with minimal effort.
* Modular Approach: It supports various blockchain frameworks, including Hyperledger Fabric, and is aimed at reducing the complexity involved in blockchain management.
* Use Cases: Hyperledger Cello is useful for enterprise blockchain applications, as it allows administrators to manage blockchain networks with tools that support configuration, monitoring, and scaling.
Thus,B. Cellois the correct answer, as it simplifies blockchain deployment and management.

NEW QUESTION # 55
Which of the following is a language for working with Ethereum?

A. Kovan
B. Solidity
C. Mist
D. Rikeby

Answer: B

Explanation:
Solidityis 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 asRinkebyandKovan, refer to Ethereum test networks where developers test smart contracts, but they are not languages themselves.Mistis an Ethereum wallet interface, not a programming language.
Thus,C. Solidityis the correct answer, as it is the language specifically designed for working with Ethereum smart contracts.

NEW QUESTION # 56
......

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