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Which of the following is a key characteristic of centralization?

A) Control is distributed across many participants

B) A single entity or a small group controls decision-making

C) All transactions are transparent and anonymous

D) No intermediaries are required for validation

Decentralization means that no single entity controls the network, and decisions are made by consensus.

True

False

What is one of the main risks associated with centralized financial systems?

A) The high cost of decentralization

B) Increased transparency for users

C) Single points of failure, making the system vulnerable to attacks

D) Lack of government regulation

Which of the following is an example of a decentralized platform?

A) Facebook

B) Ethereum

C) Federal Reserve Bank

D) Apple Pay

Decentralized systems, like Bitcoin, require intermediaries to verify and approve transactions.

True

False

What is a disadvantage of decentralization?

A) It creates more single points of failure

B) It tends to be slower due to the need for consensus among participants

C) It increases corruption

D) It restricts transparency and trust

Which of the following best represents the push for decentralization in modern finance?

A) The development of Central Bank Digital Currencies (CBDCs)

B) The rise of decentralized finance (DeFi) platforms like Uniswap and Aave

C) The implementation of strict KYC (Know Your Customer) regulations

D) The creation of government-backed cryptocurrencies

Centralization typically leads to faster decision-making since fewer entities are involved.

True

False

What is one potential advantage of centralization in financial systems?

A) Improved privacy for users

B) Faster decision making and scalability

C) Less vulnerability to external attacks

D) Reduced government oversight

In a decentralized system, decisions are made by a central governing body.

True

False

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