CCA Blockchain Fundamentals 3 — Questions and Answers
Question 1: In the context of blockchain auditing, what is a '51% attack'?
- An attack that steals private keys from more than half the network nodes
- An attack where an entity controls the majority of hashing power to rewrite recent history (Correct answer)
- A DDoS attack targeting over half the network's validator nodes
- A governance attack where 51% of token holders vote to drain a treasury
Correct answer: An attack where an entity controls the majority of hashing power to rewrite recent history
Controlling over 50% of a Proof-of-Work network's hash rate allows an attacker to out-mine honest nodes, enabling double-spends by replacing recently confirmed transactions.
Question 2: What is the function of the 'nonce' field in a Bitcoin block header?
- It records the number of transactions included in the block
- It is a unique identifier assigned by the network to each miner
- It is the value miners iterate to find a hash below the difficulty target (Correct answer)
- It stores a cryptographic signature proving the miner's identity
Correct answer: It is the value miners iterate to find a hash below the difficulty target
Miners increment the nonce repeatedly until the resulting block header hash meets the network's difficulty requirement (starts with enough leading zeros).
Question 3: How does Proof-of-Stake consensus differ from Proof-of-Work in terms of Sybil resistance?
- PoS relies on computational cost; PoW relies on economic stake as the barrier
- PoS relies on economic stake locked as collateral; PoW relies on computational cost (Correct answer)
- Both use economic stake but PoW requires more capital
- PoS has no Sybil resistance mechanism; PoW is the only secure option
Correct answer: PoS relies on economic stake locked as collateral; PoW relies on computational cost
PoS requires validators to lock up cryptocurrency as collateral, making Sybil attacks costly via capital commitment, while PoW makes them costly via electricity and hardware.
Question 4: An auditor reviewing a permissioned blockchain would focus on which control that is largely absent in permissionless chains?
- Cryptographic hashing of transactions
- Access control lists governing who may join and transact (Correct answer)
- Merkle tree verification of block contents
- Digital signatures on each transaction
Correct answer: Access control lists governing who may join and transact
Permissioned blockchains require identity vetting and formal onboarding, making access controls a critical audit area unlike open permissionless networks where anyone can participate.
Question 5: What is 'finality' in blockchain consensus, and why does it matter for auditors?
- The total supply cap of a cryptocurrency, relevant to inflation audits
- The point at which a transaction is considered irreversible, affecting settlement risk (Correct answer)
- The process of archiving old blocks to reduce storage, affecting data retention
- The final block in an epoch, used for staking reward calculations
Correct answer: The point at which a transaction is considered irreversible, affecting settlement risk
Finality determines when an auditor can treat a transaction as settled and not subject to reversal, directly impacting how many confirmations are needed before recording assets or liabilities.
Question 6: Which consensus mechanism is used by Hyperledger Fabric, and why is it relevant to enterprise blockchain audits?
- Proof-of-Work, because it provides the strongest immutability guarantee
- Practical Byzantine Fault Tolerance (PBFT)-based ordering, providing immediate finality for enterprises (Correct answer)
- Delegated Proof-of-Stake, because token holders vote on enterprise validators
- Proof-of-Authority with anonymous validators for privacy
Correct answer: Practical Byzantine Fault Tolerance (PBFT)-based ordering, providing immediate finality for enterprises
Hyperledger Fabric uses an ordering service with PBFT-derived consensus that provides deterministic, immediate transaction finality — critical for enterprise auditability and compliance.
Question 7: What is a 'blockchain explorer' and how does it support cryptocurrency auditing?
- A hardware wallet with a built-in display for reviewing transaction history
- A web-based tool for querying on-chain data including addresses, transactions, and block details (Correct answer)
- A forensic tool that decrypts private keys from public blockchain data
- A smart contract that automates audit report generation
Correct answer: A web-based tool for querying on-chain data including addresses, transactions, and block details
Blockchain explorers provide transparent, queryable access to on-chain records, enabling auditors to independently verify transaction histories, balances, and block confirmations.
CCA Blockchain Fundamentals 3
In the context of blockchain auditing, what is a '51% attack'?