Blockchain Technology Types of Blockchain Networks 4 — Questions and Answers
Question 1: A Layer-2 blockchain solution primarily aims to solve which problem of the base (Layer-1) blockchain?
- Lack of smart contract support
- Scalability and transaction throughput limitations (Correct answer)
- Inability to store large files
- Absence of native tokens
Correct answer: Scalability and transaction throughput limitations
Layer-2 solutions process transactions off the main chain to increase throughput and reduce fees while inheriting Layer-1 security.
Question 2: What does 'on-chain' governance mean in the context of blockchain network types?
- All nodes are physically connected to a central server
- Protocol changes are voted on and executed directly via blockchain transactions (Correct answer)
- Smart contracts are audited before deployment
- Miners are selected by the foundation
Correct answer: Protocol changes are voted on and executed directly via blockchain transactions
On-chain governance allows token holders to vote on protocol changes through transactions recorded on the blockchain itself.
Question 3: Which blockchain characteristic makes it most suitable for a government-issued digital currency (CBDC)?
- Fully public and permissionless
- Permissioned with central bank control (Correct answer)
- Anonymous and decentralized
- Governed by a miner consortium
Correct answer: Permissioned with central bank control
CBDCs require central bank oversight and KYC compliance, so a permissioned network with controlled access is most appropriate.
Question 4: In a federated (consortium) blockchain, which entity typically acts as the validator?
- Any anonymous miner worldwide
- Only the founding company's servers
- A pre-selected set of member organization nodes (Correct answer)
- Public validators chosen by token stake
Correct answer: A pre-selected set of member organization nodes
Federated blockchains use a pre-approved set of nodes from member organizations to validate transactions.
Question 5: Which type of blockchain would MOST likely be used to issue and track publicly traded securities to ensure transparency for all market participants?
- Private blockchain
- Public blockchain (Correct answer)
- Consortium blockchain between two banks
- Encrypted sidechain
Correct answer: Public blockchain
Public blockchains provide full transparency for all participants, which is critical for market integrity in publicly traded securities.
Question 6: What is the main purpose of a 'two-way peg' in blockchain architecture?
- To link two miners into a combined hashing pool
- To allow assets to move between a main chain and a sidechain (Correct answer)
- To synchronize block times across two public blockchains
- To enforce smart contract deadlines
Correct answer: To allow assets to move between a main chain and a sidechain
A two-way peg locks assets on the main chain and releases equivalent assets on the sidechain, and vice versa, enabling interoperability.
Question 7: Which of these best describes an 'enterprise blockchain' compared to a public blockchain?
- It uses more energy-intensive consensus algorithms
- It restricts participation to known, vetted entities for business use cases (Correct answer)
- It has no native cryptocurrency or token
- It is always open-source and community-governed
Correct answer: It restricts participation to known, vetted entities for business use cases
Enterprise blockchains are permissioned networks designed for business applications where participants are known and trusted.
Blockchain Technology Types of Blockchain Networks 4
A Layer-2 blockchain solution primarily aims to solve which problem of the base (Layer-1) blockchain?