Understanding Blockchain Technology

What is the primary purpose of blockchain technology?

• To simplify record-keeping

• To centralize data storage

• To decentralize control and enhance security

• To increase transaction costs

What problem does blockchain technology primarily solve?

• Speed of transactions

• Centralization and its associated risks

• Data storage limitations

• Internet connectivity issues

Why was Bitcoin created?

• To eliminate the need for central authorities in financial transactions

• To compete with traditional banks

• To facilitate faster transactions

• To create a new digital currency

Which of the following is a characteristic of a decentralized blockchain?

• Controlled by a single entity

• Requires a central authority for validation

• Open to everyone and resistant to censorship

• Operates only within one country

What does the consensus algorithm in a blockchain ensure?

• Transactions are processed instantly

• All transactions are free

• Only verified users can make transactions

• New blocks are added to the blockchain in a standardized way

What role does market adoption play in the effectiveness of a blockchain?

• It decreases the value of the blockchain

• It is irrelevant to the blockchain's operation

• It increases the cost of transactions

• It is crucial for achieving decentralization and security

What is a major difference between public and private blockchains?

• Private blockchains offer better security

• Private blockchains are open to everyone

• Public blockchains are slower

• Public blockchains do not require a third party

Which of the following is NOT a benefit of public blockchains?

• Centralized control

• No single point of failure

• Censorship resistance

• Immutability of records

Why might a company choose to use a private blockchain?

• Because it is cheaper than using a public blockchain

• To increase the blockchain's transparency

• To maintain control over the blockchain's participants

• To fully decentralize their operations

What is a potential drawback of using blockchain technology for transactions?

• High energy consumption and inefficiency

• It is too decentralized

• Transactions are too fast

• It is too easy to change transaction records