Skip to content

CFA Level I · CFA Level I Exam · Introduction to Digital Assets

An analyst compares two ledgers. Ledger X lets anyone run a validating node and relies on economic incentives to secure the record. Ledger Y admits only vetted firms as validators. Which statement is most accurate?

Ledger Y, the permissioned ledger, is more exposed to collusion because it relies on a small set of vetted validators. Ledger X, being open, spreads validation across many anonymous participants secured by incentives. Both use consensus mechanisms, and identification is a feature of permissioned, not permissionless, networks.

  1. ALedger Y is more exposed to a single point of collusion among its few validators than Ledger XCorrect
  2. BLedger X depends on validators being legally identified, whereas Ledger Y does not
  3. CLedger X cannot use a consensus mechanism, whereas Ledger Y must

Explanation

Ledger Y has a small, vetted validator set, so collusion or compromise among a few parties is a greater risk than in a broad open set. Ledger X is permissionless and does not require identification, and both ledgers use consensus mechanisms.

Did you get it right without looking?

One question tells you little. A timed set on Introduction to Digital Assets shows your real accuracy, how long you take and where you lose marks.

Practise Introduction to Digital AssetsFree diagnostic mock

More Introduction to Digital Assets questions