Cryptoasset Anti-Financial Crime Specialist (CCAS) Certification Practice Test

What is the primary goal of using smart contracts on a blockchain?

1. To improve business between parties using a blockchain, where anonymity is key

2. To simplify business and trade between both anonymous and identified parties, sometimes without the need for a middleman

3. To increase the security associated with traditional business methods, without compromising on authenticity and credibility

4. To allow for last-minute changes to a business contract

The correct answer is: To simplify business and trade between both anonymous and identified parties, sometimes without the need for a middleman

The primary goal of using smart contracts on a blockchain is to simplify business and trade between parties, whether they are anonymous or identified, often eliminating the need for intermediaries. Smart contracts are self-executing contracts with the terms of the agreement written directly into code. This technology enables trustless transactions where all parties can interact directly without relying on a centralized authority. By facilitating automated execution of contractual conditions once predetermined criteria are met, smart contracts enhance efficiency and reduce costs associated with traditional contract processes. They enable swift, transparent, and tamper-proof execution of agreements, which is particularly beneficial in scenarios involving multiple parties or complex transactions. This ability to streamline processes leads to faster and more reliable transactions, benefiting a diverse range of applications, from supply chain management to financial services. Thus, option B accurately captures the essence of why smart contracts are employed in blockchain ecosystems.