CBC Tokenization & Digital Assets

Question 1

What is tokenization in the context of blockchain technology?

Accepted Answer

Converting rights to a real-world or digital asset into a blockchain-based digital token

Answer

The process of encrypting private keys using symmetric algorithms

Answer

The mechanism by which nodes validate transactions in a distributed ledger

Answer

Creating anonymous wallet addresses to obscure transaction history

Question 2

Which Ethereum token standard defines a common interface for fungible tokens?

Accepted Answer

ERC-20

Answer

ERC-721

Answer

ERC-1155

Answer

ERC-998

Question 3

What is the primary characteristic of a utility token?

Accepted Answer

It provides access to a product or service within a specific blockchain ecosystem

Answer

It represents ownership equity in a company and pays dividends

Answer

It is pegged 1:1 to a fiat currency like the US dollar

Answer

It must be registered with the SEC as a security instrument

Question 4

Asset-backed tokenization primarily differs from cryptocurrency in that it:

Accepted Answer

Represents a claim on an underlying tangible or financial asset

Answer

Uses proof-of-work consensus exclusively to validate transactions

Answer

Cannot be transferred between wallets on a public blockchain

Answer

Is always issued by a central bank or government authority

Question 5

What factor most commonly causes a token to be classified as a security under US law?

Accepted Answer

Investors expect profits primarily from the efforts of others

Answer

The token is issued on a public rather than private blockchain

Answer

The token uses the ERC-20 standard on Ethereum

Answer

The token supply exceeds one billion units at issuance

Question 6

What makes a non-fungible token (NFT) distinct from a standard ERC-20 token?

Accepted Answer

Each NFT has a unique identifier making it non-interchangeable with other tokens

Answer

NFTs can only be minted by government-authorized entities

Answer

NFTs are stored off-chain and only referenced by the blockchain

Answer

NFTs require proof-of-work mining to validate each transfer

Question 7

Fractional ownership through tokenization primarily enables investors to:

Accepted Answer

Purchase proportional shares in high-value assets that were previously illiquid

Answer

Bypass KYC and AML requirements for high-value asset purchases

Answer

Automatically receive dividends without tax reporting obligations

Answer

Convert any digital token into a legal deed recognized by courts