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Questions and Answers
What is the main difference between centralization and decentralization?
What is the main difference between centralization and decentralization?
- Centralization is more prone to money laundering-related offenses and fraud
- Decentralization is more prone to money laundering-related offenses and fraud
- Centralization is less sensitive to inflation.
- Decentralization is less sensitive to inflation. (correct)
What is the purpose of decentralized cryptoassets?
What is the purpose of decentralized cryptoassets?
- To be used as an alternative to regulated currency. (correct)
- To be issued, operated, managed, and regulated by a central party.
- To be more sensitive to inflation.
- To be less sensitive to money laundering-related offenses and fraud
What is the primary risk associated with decentralized cryptoassets?
What is the primary risk associated with decentralized cryptoassets?
- Inflation.
- Money laundering-related offenses and fraud (correct)
- Central oversight.
- Alternative currency.
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Study Notes
- Centralization and decentralization can be applied to cryptoassets, networks, and exchanges.
- Centralization refers to the extent to which a cryptoasset is issued, operated, managed, and regulated by a central party.
- Decentralization refers to the lack of a single controlling party for a cryptoasset, which can make it less sensitive to inflation and allow it to be used as an alternative to regulated currency.
- Because decentralized cryptoassets lack central oversight, they are more prone to money laundering-related offenses and fraud.
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