CBCP CBCP Blockchain Governance and Regulation 1 — Questions and Answers
Question 1: Which type of blockchain governance model relies on token holders voting directly on protocol changes?
- Delegated governance
- On-chain governance (Correct answer)
- Off-chain governance
- Consortium governance
Correct answer: On-chain governance
On-chain governance embeds the voting and decision-making process directly into the blockchain protocol, allowing token holders to vote on proposed changes.
Question 2: What is a DAO (Decentralized Autonomous Organization) primarily governed by?
- A centralized board of directors
- Government regulations
- Smart contracts and token-based voting (Correct answer)
- A single founding team
Correct answer: Smart contracts and token-based voting
A DAO is governed by smart contracts and token-based voting, allowing stakeholders to propose and vote on decisions without centralized control.
Question 3: In blockchain governance, what is a 'hard fork' typically used to address?
- Minor software bugs
- Major protocol upgrades or fundamental rule changes (Correct answer)
- Transaction fee adjustments
- Node synchronization issues
Correct answer: Major protocol upgrades or fundamental rule changes
A hard fork implements major protocol upgrades or fundamental rule changes that are not backward-compatible, requiring all nodes to upgrade.
Question 4: Which US regulatory body has primary jurisdiction over cryptocurrency exchanges operating as securities platforms?
- CFTC
- FinCEN
- SEC (Correct answer)
- OCC
Correct answer: SEC
The Securities and Exchange Commission (SEC) has primary jurisdiction over cryptocurrency exchanges that trade digital assets classified as securities.
Question 5: What is the primary purpose of AML (Anti-Money Laundering) requirements for blockchain businesses in the US?
- To increase transaction speed
- To prevent illegal funds from being disguised as legitimate assets (Correct answer)
- To reduce blockchain energy consumption
- To standardize smart contract formats
Correct answer: To prevent illegal funds from being disguised as legitimate assets
AML requirements are designed to prevent criminals from disguising illegally obtained funds as legitimate assets by monitoring and reporting suspicious transactions.
Question 6: Which governance concept describes a blockchain network where changes require agreement from a defined subset of network participants?
- Proof of Authority
- Multisig governance
- BFT-based governance
- Threshold governance (Correct answer)
Correct answer: Threshold governance
Threshold governance requires a predefined minimum number or percentage of participants to agree before a protocol change or transaction is approved.
CBCP CBCP Blockchain Governance and Regulation 1
Which type of blockchain governance model relies on token holders voting directly on protocol changes?