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Quiz: Blockchain

Blockchain technology is the beating heart of cryptocurrency. Test your knowledge of blockchain with this Swyftx Learn quiz.

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Question 1

Blockchain is a type of technology that stores data in the form of blocks.

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A blockchain is a shared, unchangeable record of all the transactions that happen within a network. This list of transactions is time-stamped and data-driven. The use of cryptography and hashing makes changing the blockchain incredibly difficult.

Question 2

What is Proof of Work?

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Proof of Work is a consensus algorithm that uses the computational power from computers around the world (miners) to verify transactions, secure the blockchain, and mint new coins. Bitcoin is the most well-known cryptocurrency that use the Proof of Work mechanism.

Question 3

Blockchain can only be used for tracking financial transactions

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Blockchain technology is extremely versatile and can also be used to store medical records, track the flow of goods, execute binding agreements, track the ownership or origin of artwork, store personal credit records, and verify payments through a supply chain, and much more.

Question 4

Blockchain provides many advantages over conventional methods of transactions and record-keeping, such as

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Blockchain is a revolutionary technology that offers a fast, decentralized, secure, and low-cost way to process transactions and store information.

Question 5

A consensus mechanism is a system that makes sure that blockchain operators agree on the state of the network.

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A consensus mechanism, such as Proof of Work or Proof of Stake, is an algorithm that ensures that a network’s participants can reach an agreement on the validity of transactions and information stored on the blockchain.

Question 6

What is Proof of Stake?

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Proof of Stake is a consensus mechanism that randomly selects a user who has locked some of their cryptocurrency in a smart contract to verify the transactions in a block. Users are rewarded a small amount of the coin they are staking.

Question 7

Proof of Work is more energy-efficient than Proof of Stake.

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Proof of Work (PoW) is an extremely secure consensus mechanism, but it requires a phenomenal amount of computing power, and therefore energy, to maintain. By contrast, Proof of Stake (PoS) is very energy efficient, but it can be difficult to implement. Ethereum 2.0 network will be reduced by an extraordinary 99.95%.

Question 8

What is the blockchain trilemma?

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The blockchain trilemma is a widely accepted theory that blockchains can only provide two out of three benefits at any one time in relation to decentralization, scalability, and security.

Question 9

Bitcoin uses a Proof of Work consensus algorithm

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The Bitcoin blockchain uses a Proof of Work (PoW) consensus algorithm to verify transactions and creating new Bitcoins.

Question 10

What is a Layer 2 solution?

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Layer 2 solutions add an extra layer on top of the original network that adds functionality, such as efficient transaction processing, without affecting the underlying blockchain.

Question 11

What makes blockchain technology secure?

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Blockchain technology utilises a number of mechanisms such as consensus, decentralization, immutability, and cryptography that all work together to ensure the highest level of security.

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