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

Which type of transaction is considered most secure?

1. Lightning Network

2. Split transaction across blockchains

3. Standardized Bitcoin transfer

4. Smart contract

The correct answer is: Smart contract

The option referring to smart contracts is considered the most secure type of transaction because smart contracts are self-executing contracts with the terms directly written into code. They are stored and replicated on the blockchain, which provides a secure, transparent, and tamper-proof environment for executing agreements. Once deployed, they automatically enforce the contractual conditions without the need for intermediaries, significantly reducing risks related to fraud or manipulation. These contracts are fully operational within the decentralized network, which enhances security by making it difficult for malicious actors to alter the agreements once implemented. Additionally, smart contracts can be programmed with various layers of security features, including cryptographic verification and multi-signature requirements that further protect the transaction's integrity. In contrast, other options may have their own security mechanisms, but they generally do not match the robustness of smart contracts. The Lightning Network, while offering fast and low-cost transactions, relies on anchors and opening and closing channels, which can introduce vulnerabilities if not managed correctly. Split transactions across blockchains can also face risks related to the inter-chain communication and the potential for value loss, while standardized Bitcoin transfers, though relatively secure, do not benefit from the added complexities and automated safeguards of smart contracts.