CCE Cryptocurrency Core Concepts 3

Question 1

What distinguishes a permissioned blockchain from a permissionless one?

Accepted Answer

Permissioned chains restrict participation to approved entities

Answer

Permissioned blockchains require identity verification and approval before nodes can join, unlike open public networks.

Question 2

What is a '51% attack' and why is it dangerous?

Accepted Answer

When a single entity controls over half of mining power and can rewrite recent blocks

Answer

A 51% attack occurs when one entity controls the majority of hash rate, enabling double-spend attacks by reorganizing recent transaction history.

Question 3

What is 'finality' in blockchain transactions?

Accepted Answer

The point at which a transaction is considered irreversible

Answer

Finality refers to the guarantee that a confirmed transaction cannot be altered or reversed.

Question 4

Which of the following best describes a 'mempool'?

Accepted Answer

A holding area for unconfirmed transactions awaiting block inclusion

Answer

The mempool (memory pool) is a node's local queue of broadcast but unconfirmed transactions pending selection by miners or validators.

Question 5

What problem does the Lightning Network primarily solve for Bitcoin?

Accepted Answer

High on-chain transaction fees and low throughput

Answer

The Lightning Network is a Layer 2 protocol enabling fast, low-fee off-chain payments that only settle on-chain when channels close.

(CCE) Certified Cryptocurrency Expert Practice Test