Exploring Blockchain Concepts

What is a smart contract?

• A smart contract is a self-executing contract with the terms written into code on a blockchain.

• A smart contract is a physical document signed by both parties.

• A smart contract is a type of insurance policy.

• A smart contract is a legal agreement that requires a notary public.

How do smart contracts execute automatically?

• Smart contracts can only execute on centralized servers.

• Smart contracts require manual intervention to execute.

• Smart contracts are executed by human operators on demand.

• Smart contracts execute automatically when predefined conditions are met on a blockchain.

What are the main benefits of using smart contracts?

• Increased manual intervention

• The main benefits of using smart contracts include automation, cost reduction, increased transparency, enhanced security, and faster transactions.

• Reduced security risks

• Higher transaction fees

What is the role of cryptography in blockchain security?

• Cryptography ensures data integrity, confidentiality, and authenticity in blockchain security.

• Cryptography is primarily for user interface design in blockchain.

• Cryptography eliminates the need for consensus mechanisms.

• Cryptography is used to speed up transaction processing.

What are common vulnerabilities in blockchain systems?

• All blockchain systems use the same consensus mechanism.

• Blockchain systems do not require key management.

• Common vulnerabilities in blockchain systems include smart contract vulnerabilities, 51% attacks, Sybil attacks, and improper key management.

• Blockchain systems are immune to all attacks.

How can blockchain technology enhance data security?

• Blockchain technology relies solely on centralized servers.

• Blockchain eliminates the need for any verification processes.

• Data is stored in plain text without encryption.

• Blockchain technology enhances data security by providing decentralization, cryptographic hashing, and consensus mechanisms.

What is cryptocurrency?

• Cryptocurrency is a physical coin used for transactions.

• Cryptocurrency is a type of stock traded on the stock market.

• Cryptocurrency is a government-issued currency that is regulated by banks.

• Cryptocurrency is a digital currency that uses cryptography and operates on a decentralized network.

What is the difference between a coin and a token?

• A coin is a type of token that can only be used in specific applications.

• Tokens are always more valuable than coins in the cryptocurrency market.

• A coin is a digital asset that cannot be traded on exchanges.

• A coin is a standalone digital currency with its own blockchain, while a token is a digital asset created on an existing blockchain.

What are the main functions of a cryptocurrency wallet?

• Provide investment advice

• Generate new cryptocurrencies

• Create blockchain technology

• The main functions of a cryptocurrency wallet are to store private and public keys, facilitate sending and receiving cryptocurrencies, and track transaction history.

What is a consensus mechanism in blockchain?

• A type of cryptocurrency used for transactions.

• A technique for increasing transaction speed on the blockchain.

• A method for storing data securely on a blockchain.

• A protocol that ensures agreement among nodes on the blockchain's state.