CFA Level I · CFA Level I Exam · Introduction to Digital Assets
In a distributed ledger network, the participants who validate transactions and add new blocks to the chain, and who typically receive fees or newly issued tokens for doing so, are best described as:
Validators or miners validate transactions and add blocks to the chain, earning fees or new tokens as compensation. Custodians only safeguard assets and keys, and wallet providers only supply software to store keys, so neither of them performs the validation role in a distributed ledger.
- Avalidators or minersCorrect
- Bcustodians
- Cwallet providers
Explanation
Validators (proof of stake) or miners (proof of work) verify transactions and append blocks, and are compensated with fees or newly issued tokens. Custodians only safeguard private keys or assets. Wallet providers supply software for holding keys and do not validate blocks.
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