Decentralized Payment Systems

What is blockchain technology?

• A type of software used for social media platforms.

• A centralized database managed by a single entity.

• A method for creating digital currencies only.

• Blockchain technology is a decentralized digital ledger that securely records transactions across multiple computers.

How does blockchain enhance payment security?

• Blockchain does not use encryption for securing payment information.

• Blockchain enhances payment security by providing a decentralized, encrypted, and immutable ledger for transactions.

• Blockchain relies on a central authority for transaction verification.

• Blockchain transactions are easily reversible and can be altered.

What are the benefits of decentralized payments?

• Mandatory identification for users

• Higher transaction speeds

• Lower fees, increased privacy, enhanced security, greater accessibility, and control over funds.

• Limited currency options

Name a popular cryptocurrency used for payments.

• Litecoin

• Ripple

• Ethereum

• Bitcoin

How does a smart contract work in blockchain?

• A smart contract is a physical document signed by parties involved.

• A smart contract is only applicable to cryptocurrency transactions.

• A smart contract works by executing code on a blockchain when specific conditions are met, automating agreements and transactions.

• A smart contract requires a central authority to enforce its terms.

What role do miners play in blockchain transactions?

• Miners store user data and personal information on the blockchain.

• Miners are responsible for developing blockchain software and protocols.

• Miners validate and confirm transactions, adding them to the blockchain and ensuring network security.

• Miners create new cryptocurrencies by generating random numbers.

What is the difference between public and private blockchains?

• Public blockchains are always faster than private blockchains.

• Private blockchains are accessible to everyone without restrictions.

• Public blockchains are controlled by a single organization.

• Public blockchains are open and decentralized, while private blockchains are restricted and controlled by a specific organization.

How can blockchain reduce transaction fees?

• By eliminating intermediaries and using decentralized validation.

• By implementing higher fees for faster transactions.

• By using traditional banking systems for validation.

• By increasing the number of intermediaries involved.

What is a digital wallet in the context of blockchain?

• A digital wallet is a software application for storing and managing cryptocurrencies and digital assets.

• A digital wallet is a type of cryptocurrency that can be traded.

• A digital wallet is a physical device for storing cash.

• A digital wallet is a bank account used for online transactions.

What challenges does blockchain face in payment systems?

• Low transaction fees

• Scalability, energy consumption, regulatory uncertainty, integration challenges, and user experience.

• Universal acceptance by all merchants

• Instant transaction confirmation