Who first proposed blind signatures to build an untraceable digital currency?
Correct Answer: A
David Chaumfirst proposed the concept ofblind signaturesin the early 1980s as a way to create an untraceable digital currency. Chaum's work laid the groundwork for digital privacy in financial transactions by enabling transactions to be signed without revealing the actual content of the transaction, thus maintaining user privacy. Key Details: * Blind Signatures: A blind signature is a form of digital signature in which the content of a message is hidden (or "blinded") before being signed. This allows for privacy-preserving digital transactions, as the signer cannot see the actual content they are signing. * Application in Digital Currency: Chaum's idea was foundational for the development of anonymous electronic cash systems. His work led to the creation of DigiCash in 1989, one of the earliest forms of digital currency focused on user privacy. * Influence on Modern Cryptocurrencies: Although Chaum's DigiCash was not a blockchain-based system, his concepts of privacy and anonymous transactions greatly influenced the development of later cryptographic currencies and protocols, including Bitcoin. Therefore,A. David Chaumis the correct answer, as he pioneered the use of blind signatures for anonymous digital currency.
Question 2
_______is a word use to describe technologies which store, distribute and facilitate the exchange of value between users, either privately or publicly
Correct 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. DLTencompasses 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. DLTis the correct answer, as it is the term that broadly covers technologies used for the exchange and storage of value in distributed systems.
Question 3
The Financial Action Task force defines virtual asset service providers as companies that (choose two):
Correct Answer: C,D
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.
Question 4
_______uses a Trusted Execution environment (TEE) to provide randomness and safety in the leader election process via a guaranteed wait time.
Correct Answer: A
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.
Question 5
Ethereum uses_____ as Proof of Work (PoW) whereas Bitcoin uses____based PoW.
Correct Answer: C
Ethereum uses Ethashas its Proof of Work (PoW) algorithm, whileBitcoin uses SHA-256for its PoW algorithm. Both are used to secure their respective networks, but they differ in terms of computational complexity and memory requirements. Key Details: * Ethash (Ethereum): Ethash is a memory-hard hashing algorithm designed to be resistant to ASIC mining, favoring GPU miners instead. It requires substantial memory, which helps to ensure a higher degree of decentralization. * SHA-256 (Bitcoin): Bitcoin's SHA-256 is a highly secure hashing algorithm that supports ASIC mining. It is computationally intensive but less memory-demanding compared to Ethash. * Purpose in PoW: Both algorithms enable miners to validate transactions and secure the network by solving complex puzzles. Ethash's design helps Ethereum maintain a decentralized network, whereas SHA-256 allows Bitcoin to achieve high levels of security with specialized mining equipment. Therefore,D. ETHASH SHA-256is the correct answer, as these are the specific PoW algorithms used by Ethereum and Bitcoin, respectively.
