Which of the following is a risk associated with using a 'Public Blockchain' for financial reporting?

Answer options:

Centralized control allows a single entity to manipulate the ledger.

Data is encrypted and cannot be viewed by anyone.

Lack of a central authority makes it difficult to correct erroneous transactions.

It requires a VPN to access.

How to approach this question

Identify the downside of 'Immutability' and 'Decentralization'.

Full Answer

C.Lack of a central authority makes it difficult to correct erroneous transactions.✓ Correct

In a public blockchain, the ledger is immutable and decentralized. If a financial transaction is recorded in error, there is no central administrator to 'undo' or 'reverse' it. A correcting entry must be made, but the original error remains visible.

Common mistakes

Thinking public blockchains are private/encrypted by default.

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