Blockchain Technology Use Cases 4 — Questions and Answers
Question 1: What is the primary challenge when applying blockchain to IoT device networks at scale?
- IoT devices are too secure for blockchain
- Limited computational resources on devices make running full nodes impractical (Correct answer)
- Blockchain requires internet connectivity which IoT avoids
- IoT data is already immutable by default
Correct answer: Limited computational resources on devices make running full nodes impractical
Most IoT sensors have minimal CPU and battery capacity, making it infeasible to run full blockchain nodes; lightweight or off-chain solutions are needed.
Question 2: A logistics company wants to reduce paperwork delays at customs. How does blockchain help?
- It replaces customs officers with AI robots
- It provides a shared, real-time digital record of shipment documents accessible to all parties (Correct answer)
- It ships goods faster by bypassing border checks
- It automatically pays import tariffs in cryptocurrency
Correct answer: It provides a shared, real-time digital record of shipment documents accessible to all parties
A permissioned blockchain shared among shippers, ports, and customs agencies eliminates manual document exchange and reduces clearance times.
Question 3: In decentralized finance (DeFi), what is a 'flash loan' and why is it unique to blockchain?
- A government-backed loan processed instantly by banks
- An uncollateralized loan that must be borrowed and repaid within a single transaction block (Correct answer)
- A loan issued via SMS to underbanked populations
- A mortgage approved in under 24 hours
Correct answer: An uncollateralized loan that must be borrowed and repaid within a single transaction block
Flash loans exploit smart contract atomicity: if the loan isn't repaid within the same transaction, the entire operation reverts, eliminating default risk.
Question 4: How does blockchain support carbon credit markets in the US?
- It burns carbon physically to generate tokens
- It creates transparent, auditable records of carbon offset issuance and retirement to prevent double-counting (Correct answer)
- It replaces renewable energy infrastructure
- It mines credits using fossil fuels
Correct answer: It creates transparent, auditable records of carbon offset issuance and retirement to prevent double-counting
On-chain carbon credit registries prevent the same offset from being sold twice by maintaining a single authoritative retirement record.
Question 5: Which feature of public blockchain makes it suitable for transparent charitable donation tracking?
- High transaction fees deter small donors
- All transactions are publicly visible and auditable by anyone (Correct answer)
- Only the charity can see donation records
- Transactions can be reversed if misused
Correct answer: All transactions are publicly visible and auditable by anyone
Public blockchains let donors trace their contributions to final beneficiaries with full transparency, reducing misappropriation.
Question 6: A startup issues tokenized bonds on a blockchain. What traditional intermediary does this primarily displace?
- Corporate lawyers drafting contracts
- Investment banks and clearinghouses managing issuance and settlement (Correct answer)
- Retail investors buying bonds
- The US Treasury setting interest rates
Correct answer: Investment banks and clearinghouses managing issuance and settlement
Tokenized bond issuance handled by smart contracts reduces or eliminates the role of investment banks and central clearinghouses in the bond lifecycle.
Question 7: What is the main benefit of using a blockchain-based system for managing prescription drug histories in the US?
- It allows pharmacies to alter prescriptions as needed
- It prevents prescription fraud by creating an immutable, cross-pharmacy medication record (Correct answer)
- It removes the need for DEA scheduling of controlled substances
- It lets patients self-prescribe controlled substances
Correct answer: It prevents prescription fraud by creating an immutable, cross-pharmacy medication record
A shared blockchain prescription ledger lets pharmacists instantly verify whether a controlled substance has already been dispensed elsewhere, stopping 'doctor shopping.'
Blockchain Technology Use Cases 4
What is the primary challenge when applying blockchain to IoT device networks at scale?