Final Exam Solutions - 100 Questions - MBA651/FIN451 - Fall 2024

9. What is the purpose of MetaMask in the Ethereum ecosystem?

A) Storing Ether
B) Creating smart contracts
C) Managing private keys and interacting with dApps
D) Mining new Ether

10. What is the main purpose of a smart contract?

A) It automatically executes code when certain conditions are met
B) It stores blockchain transactions
C) It verifies Bitcoin transactions
D) It creates a decentralized app (dApp)

11. What is Truffle primarily used for?

A) Writing, testing, and deploying smart contracts
B) Mining Ether
C) Storing blockchain transactions
D) Securing the blockchain

12. What is the role of Ganache in blockchain development?

A) It provides live blockchain statistics
B) It mines Ether on the main Ethereum network
C) It secures smart contracts
D) It creates a private blockchain for testing and development

13. What are the blocks in a blockchain linked together by?

A) Private keys
B) Hashes
C) Nodes
D) Miners

14. What is a DAO in the blockchain ecosystem?

A) Decentralized Asset Organization
B) Digital Application Order
C) Decentralized Autonomous Organization
D) Distributed App Order

15. Which of the following best describes the purpose of gas in Ethereum transactions?

A) To reduce the cost of transactions
B) To compensate miners for their work
C) To store data in blocks
D) To pay transaction fees to developers

16. Which consensus mechanism does Ethereum currently use after the Merge?

A) Proof of Work
B) Byzantine Fault Tolerance
C) Delegated Proof of Stake
D) Proof of Stake

17. What is the purpose of a testnet in blockchain development?

A) To run a live blockchain
B) To test smart contracts and dApps without real assets
C) To mine new coins
D) To store actual assets

18. What is the maximum supply of Bitcoin?

A) 10 million
B) 50 million
C) 21 million
D) Unlimited

19. What type of data structure is a blockchain?

A) Array
B) Linked list
C) Tree
D) Stack

20. In blockchain, what is mining?

A) The process of adding new transactions to the blockchain by solving computational problems
B) Storing Bitcoin
C) Developing smart contracts
D) Creating new dApps

21. What is the main purpose of an ICO (Initial Coin Offering)?

A) To launch a new dApp
B) To raise funds for a blockchain project by offering tokens
C) To mine new cryptocurrency
D) To verify transactions

22. What does 'forking' in a blockchain refer to?

A) A bug in the blockchain code
B) The splitting of a blockchain into two distinct versions
C) The process of mining new blocks
D) Transferring tokens between users

23. What is the Byzantine Generals Problem, and how is it related to blockchain?

A) It's a flaw in encryption
B) It's a problem of achieving consensus among unreliable participants
C) It's a problem of mining efficiency
D) It's related to blockchain scalability

24. What is a Merkle tree in the context of blockchain?

A) A privacy feature in blockchain
B) A new consensus algorithm
C) A tool for mining blocks
D) A data structure used to secure blockchain transactions by hashing data

25. What is the significance of block time in a blockchain?

A) It is the time taken to mine a new block
B) It is the time taken for a transaction to be verified
C) It is the time a block remains valid
D) It is the total lifetime of a blockchain

26. What is the main function of Ethereum?

A) To serve as a digital currency
B) To enable smart contracts and decentralized applications (dApps)
C) To mine Bitcoin
D) To act as a centralized ledger

27. What is the purpose of the Ethereum Virtual Machine (EVM)?

A) To mine Ether
B) To store Ether
C) To execute smart contracts
D) To create tokens

28. What is a 'wallet' in the context of cryptocurrency?

A) A physical device used to store money
B) A software that allows users to store and manage cryptocurrency private and public keys
C) A feature for mining tokens
D) A blockchain node

29. What is an ERC-20 token?

A) A type of Bitcoin token
B) A wallet addressn
C) A decentralized app
D) A standard used for creating tokens on the Ethereum blockchainA

30. What does 'immutability' mean in blockchain?

A) It means transactions cannot be reversed or altered
B) It means transactions are reversible
C) It refers to a smart contract function
D) It means blocks can be deleted

31. What is a nonce in blockchain?

A) A number used once in mining to find a valid hash
B) A transaction ID
C) A private key
D) A block timestamp

32. What does '51% attack' refer to in blockchain?

A) When 51% of a blockchain is mined
B) When an entity gains control of more than 50% of the mining power
C) When 51% of nodes are hacked
D) When 51% of transactions fail

33. What is a 'hash' in blockchain technology?

A) A type of cryptocurrency
B) A function that converts input data into a fixed-length string of characters
C) A type of smart contract
D) A token standard

34. In blockchain, what is a 'genesis block'?

A) A block containing only smart contracts
B) The last block in the blockchain
C) The block with the most transactions
D) The first block in the blockchain

35. What does 'decentralization' mean in the context of blockchain?

A) Nodes store data locally only
B) Control is given to one single authority
C) Control is distributed across multiple nodes instead of a central authority
D) All transactions are private

36. What is an example of a public blockchain?

A) Bitcoin
B) AWS Blockchain
C) Private Ethereum
D) Corda

37. What is a smart contract?

A) A physical contract
B) A self-executing contract where the terms are written into code
C) A legal contract verified by blockchain
D) A private transaction between two parties

38. Which programming language is primarily used for writing smart contracts on Ethereum?

A) Python
B) Java
C) Solidity
D) C++

39. What is gas used for in Ethereum?

A) Powering dApps
B) Measuring the computational work required for transactions
C) Mining Ether
D) Storing data

40. What is a hard fork in blockchain?

A) A backward-compatible update
B) A type of mining algorithm
C) A method for reducing transaction fees
D) A non-backward-compatible upgrade to a blockchain

41. What is meant by 'double spending' in the context of blockchain?

A) Spending the same cryptocurrency twice
B) Mining two blocks at once
C) Sending two transactions in parallel
D) Mining Bitcoin and Ethereum simultaneously

42. What is a private key in blockchain?

A) A key to access a centralized database
B) A unique identifier for transactions
C) A secret number used to sign transactions
D) A key to generate new coins

43. What is the purpose of a blockchain explorer?

A) To monitor live transactions and blocks on the blockchain
B) To create new transactions
C) To develop smart contracts
D) To mine new blocks

44. What is a transaction fee in blockchain?

A) A fee to store data on the blockchain
B) A fee paid to use a smart contract
C) A fee charged by wallet providers
D) A fee paid to miners for processing and verifying transactions

45. What is a public key in blockchain?

A) A private code used to sign transactions
B) A key used to receive cryptocurrency or verify signatures
C) A cryptographic hash
D) A wallet address

46. What does 'proof of stake' mean in blockchain?

A) A mining algorithm based on computational work
B) A consensus mechanism where participants lock up cryptocurrency as collateral
C) A token standard for decentralized apps
D) A method for validating wallets

47. What is 'block size' in blockchain?

A) The size of a transaction
B) The amount of cryptocurrency in a transaction
C) The maximum amount of data a block can store
D) The time it takes to mine a block

48. What is a consensus mechanism in blockchain?

A) A protocol used to settle disagreements
B) A method of generating new coins
C) A legal contract enforced by the blockchain
D) A protocol that ensures agreement on the blockchain's current state

49. What is a 'gas limit' in Ethereum?

A) The minimum amount of gas required to run a smart contract
B) The maximum amount of gas allowed per block
C) The amount of gas miners need to execute a transaction
D) The amount of gas an account can hold

50. What is a dApp (Decentralized Application)?

A) A centralized application that uses blockchain for data storage
B) A decentralized application built on a blockchain with no central control
C) A token generation app
D) A blockchain mining app

51. What is the block reward in Bitcoin mining?

A) A bonus paid to miners for verifying blocks
B) A fixed amount of Bitcoin given to the miner who mines a block
C) A reward given to all blockchain participants
D) A reward given for staking tokens

52. What is the purpose of a token in blockchain?

A) To represent digital assets or utility within a project
B) To mine blocks
C) To create wallets
D) To develop dApps

53. What does a hard cap in an ICO mean?

A) The maximum amount of funds the project aims to raise
B) The maximum number of tokens distributed
C) The limit on transaction fees
D) The minimum required funds for the project

54. Which consensus mechanism was used by Ethereum before the transition to Proof of Stake?

A) Proof of Stake
B) Proof of Authority
C) Proof of Work
D) Delegated Proof of Stake

55. What is the purpose of a decentralized exchange (DEX)?

A) To facilitate peer-to-peer cryptocurrency trades without intermediaries
B) To store cryptocurrency
C) To stake tokens
D) To mine cryptocurrency

56. What is an oracle in the blockchain world?

A) A type of blockchain node
B) A mining algorithm
C) A type of wallet
D) A service that provides off-chain data to smart contracts

57. What is gas price in Ethereum?

A) The cost of executing a transaction on the network, expressed in gwei
B) The price to store data on the blockchain
C) The price of Ether
D) The price for mining new blocks

58. What is a node in blockchain?

A) A smart contract function
B) A private key
C) A device or program that participates in the blockchain network
D) A wallet

59. What is sharding in blockchain?

A) A method to split the blockchain into smaller parts for scalability
B) A way to store private keys
C) A method for verifying transactions
D) A tool for creating tokens

60. What is a cold wallet in cryptocurrency?

A) A wallet for staking tokens
B) A wallet for daily transactions
C) A wallet for mining tokens
D) A wallet that stores cryptocurrency offline for security purposes

61. What is a hot wallet in cryptocurrency?

A) A wallet connected to the internet for daily transactions
B) A wallet stored offline for security
C) A wallet used to mine tokens
D) A wallet only for staking

62. What is the main advantage of using a blockchain?

A) Increased transaction fees
B) Increased transparency and security
C) Centralized control of data
D) Fast mining

63. What does it mean for a blockchain to be 'permissionless'?

A) Anyone can join and participate in the network
B) Only verified users can participate
C) Users need permission to create smart contracts
D) Only miners are allowed to join

64. What is a blockchain 'node' responsible for?

A) Creating wallets
B) Mining new cryptocurrency
C) Storing a copy of the blockchain and validating transactions
D) Writing smart contracts

65. What is the function of a Merkle tree in blockchain?

A) To reduce the size of transactions
B) To verify the integrity of transactions efficiently
C) To mine new blocks
D) To create new tokens

66. What is an example of a 'fungible' token?

A) An NFT (Non-Fungible Token)
B) A CryptoKitty
C) Ethereum (ETH)
D) A unique collectible item

67. What is an example of a 'non-fungible' token?

A) Bitcoin
B) A CryptoKitty (NFT)
C) Ethereum
D) Ether (ETH)

68. What is the relationship between gas price and gas limit in Ethereum?

A) Gas price and gas limit determine how fast a block is mined
B) They are unrelated
C) Gas limit sets the minimum cost of a transaction
D) Gas price determines the cost per unit, and gas limit sets the maximum units required for a transaction

69. What is the main difference between Bitcoin and Ethereum?

A) Bitcoin is used for smart contracts, while Ethereum is used for payments
B) Bitcoin is a payment system, and Ethereum is a platform for decentralized applications
C) Bitcoin is faster than Ethereum
D) Ethereum uses Proof of Work, and Bitcoin uses Proof of Stake

70. What is a consensus algorithm in blockchain?

A) A protocol used to mine tokens
B) A method to ensure all participants agree on the state of the blockchain
C) A system for controlling nodes
D) A method for encrypting transactions

71. What does PoW stand for in blockchain terminology?

A) Proof of Wallet
B) Proof of Wager
C) Proof of Work
D) Proof of Writing

72. What is the primary purpose of mining in Bitcoin?

A) To increase transaction speed
B) To validate transactions and secure the network
C) To create smart contracts
D) To generate new wallets

73. What does immutability mean in blockchain?

A) Transactions cannot be modified once confirmed
B) Transactions can be edited by the miners
C) Smart contracts can be modified
D) Wallet balances can be reversed

74. What is a soft fork in blockchain?

A) A backward-compatible upgrade to a blockchain
B) A non-backward-compatible update
C) A method of reversing transactions
D) A change to the mining algorithm

75. What is the primary function of MetaMask?

A) To write smart contracts
B) To provide hardware wallets
C) To mine Ether
D) To manage Ethereum wallets and interact with dApps

76. What is an Initial Coin Offering (ICO)?

A) A process to mine new coins
B) A smart contract for dApp development
C) A fundraising method for new blockchain projects by issuing tokens
D) A method to fork the blockchain

77. What is a public key in blockchain?

A) A key used to encrypt transactions
B) A cryptographic code used to receive cryptocurrency
C) A private code used to sign transactions
D) A wallet address

78. What is Proof of Stake (PoS?

A) A consensus mechanism where validators are chosen based on the amount of cryptocurrency they hold
B) A method to encrypt blockchain transactions
C) A system to stake tokens for rewards
D) A mining algorithm for Ethereum

79. What is a token in blockchain?

A) A mining algorithm
B) A private key
C) A public key
D) A digital asset that represents ownership or utility

80. What is the difference between a coin and a token in cryptocurrency?

A) Coins operate on their own blockchain, while tokens operate on top of another blockchain
B) Coins are used for smart contracts, tokens are not
C) Tokens can be mined, coins cannot
D) Coins are digital assets, tokens are not

81. What is gas in Ethereum?

A) A type of cryptocurrency
B) A unit of computational work required to execute transactions or smart contracts
C) A mechanism to validate blocks
D) A method for mining Ether

82. What is a decentralized autonomous organization (DAO)?

A) A government entity that regulates cryptocurrency
B) A centralized organization that manages blockchain projects
C) An organization governed by smart contracts and run by its community
D) A company that creates smart contracts

83. What is the main function of a private key in blockchain?

A) To encrypt transactions
B) To sign transactions and provide access to the user's funds
C) To store Ether
D) To mine new blocks

84. What is the difference between public and private blockchains?

A) Public blockchains are permissioned, and private blockchains are permissionless
B) There is no difference
C) Private blockchains are more secure than public blockchains
D) Public blockchains are open to anyone, and private blockchains require permission to join

85. What does ERC stand for in ERC-20 token?

A) Ethereum Request for Change
B) Ethereum Reserve Currency
C) Ethereum Request for Comments
D) Ethereum Resource Code

86. What is a non-fungible token (NFT)?

A) A type of token that represents unique digital assets
B) A token that can be exchanged for an equal amount of another token
C) A cryptocurrency used for payments
D) A mining algorithm

87. What is staking in the context of blockchain?

A) The process of locking cryptocurrency to support the operations of a blockchain
B) The process of mining new tokens
C) A method for storing private keys
D) The process of creating new smart contracts

88. What is the role of miners in a Proof of Work (PoW) blockchain?

A) To create new tokens
B) To verify transactions and secure the network by solving cryptographic puzzles
C) To generate public and private keys
D) To write smart contracts

89. What is a block explorer used for in blockchain?

A) To send cryptocurrency
B) To view and verify transactions and blocks on the blockchain
C) To create smart contracts
D) To mine blocks

90. What is double-spending in blockchain?

A) Spending the same cryptocurrency in two different transactions
B) Sending cryptocurrency to two wallets at the same time
C) Mining two blocks simultaneously
D) Using two private keys for the same wallet

91. What is the purpose of gas in Ethereum?

A) To create tokens
B) To mine Ether
C) To store cryptocurrency
D) To execute smart contracts and transactions

92. What is the purpose of a blockchain consensus mechanism?

A) To create new wallets
B) To mine new tokens
C) To ensure all participants in the network agree on the current state of the blockchain
D) To store cryptocurrency securely

93. What is the main difference between Proof of Work (PoW) and Proof of Stake (PoS)?

A) PoW relies on miners solving complex puzzles, while PoS relies on validators holding cryptocurrency
B) PoS requires more computational power than PoW
C) PoW is faster than PoS
D) There is no difference

94. What is the purpose of a digital signature in blockchain transactions?

A) To ensure that transactions are encrypted
B) To verify the authenticity and integrity of a transaction
C) To mine new cryptocurrency
D) To write smart contracts

95. What is a smart contract in Ethereum?

A) A type of cryptocurrency
B) A tool to mine Ether
C) A self-executing contract with the terms of the agreement directly written into code
D) A token standard on Ethereum

96. What is the purpose of a wallet in cryptocurrency?

A) To mine cryptocurrency
B) To store, send, and receive cryptocurrency by managing private and public keys
C) To create new tokens
D) To write smart contracts

97. What is the difference between a soft fork and a hard fork in blockchain?

A) A soft fork is backward-compatible, while a hard fork is not
B) A hard fork requires less computational power
C) A soft fork changes the entire blockchain
D) A hard fork is a software update for nodes

98. What does 'trustless' mean in blockchain technology?

A) A system where all participants must trust one central entity
B) A private transaction network
C) A network where miners sign all transactions
D) A system where participants do not need to trust one another

99. What is the maximum supply of Ether in the Ethereum blockchain?

A) 21 million
B) 50 milliond
C) 100 million
D) Unlimited

100. What is the role of consensus algorithms in blockchain?

A) To govern smart contract execution
B) To ensure the agreement of all network participants on the state of the blockchain
C) To prevent hackers from accessing private keys
D) To develop dApps