CryptoCurrency quiz 2

In blockchain cryptography, what is the primary purpose of a hash function?

To produce a fixed-length digital fingerprint of any input data

Which of the following is NOT a defining characteristic of a public blockchain?

Controlled access restricted to vetted participants only

In a Proof of Work (PoW) consensus mechanism, what do miners compete to do?

Solve a computationally difficult cryptographic puzzle first

What is the maximum total supply of Bitcoin that will ever exist?

21 million BTC

What makes a Non-Fungible Token (NFT) 'non-fungible' compared to regular cryptocurrency?

Each NFT is unique and not interchangeable with another NFT on a 1:1 basis

Why are stablecoins important to the crypto ecosystem?

They reduce volatility for trading and DeFi activity

Sharding aims to:

Improve scalability by splitting workload across network segments

One problem historically faced by Ethereum was:

Network congestion and high gas fees

Non-Fungible Tokens (NFTs) are:

Unique digital assets verified on blockchain

Which mechanism helps stablecoins maintain price stability?

Pegging to reserve assets or algorithms

What is the fundamental structure of a blockchain?

A distributed, decentralized, public ledger

Which of the following is a core characteristic of most public blockchains?

Immutability of recorded data

The primary purpose of a "Stablecoin" is to:

Provide a cryptocurrency whose value is pegged to a stable asset, like the US Dollar

What defines a "Public Blockchain"?

Anyone can join the network, read data, write transactions, and participate in consensus

What is a "Hybrid Blockchain"?

A network architecture that combines both public and private blockchain features

What is a major problem with Ethereum's early blockchain design?

Scalability issues

What created the split between Ethereum and Ethereum Classic?

A major hack of the DAO smart contract

Why are stablecoins widely used in DeFi?

Provide stable collateral for lending

What is the maximum supply of Bitcoin?

21 million coins

A hard fork occurs when:

Blockchain rules change incompatibly

In a Proof-of-Work consensus mechanism, what is the primary role of cryptographic hashing?

To ensure that finding a valid block hash requires significant computational effort, making the chain tamper-resistant

Which of the following best explains why altering a single block in a blockchain is computationally impractical?

Changing one block invalidates its hash, which cascades through all subsequent blocks, requiring re-mining the entire chain

How does Bitcoin's blockchain specifically solve the double-spending problem without relying on a trusted third party?

It uses a network of decentralized nodes that validate and timestamp transactions, making previously spent coins traceable on the public ledger

What distinguishes a public blockchain from a private blockchain in terms of participation and governance?

Public blockchains are open to anyone to read and participate in, while private blockchains restrict access and are controlled by a designated organization

Which of the following factors would most likely cause a significant short-term decline in Bitcoin's market valuation?

A major government announcing a ban or heavy regulatory crackdown on cryptocurrency exchanges

When was Bitcoin first introduced?

2009

Which of the following is not a type of blockchain network?

Blockchain powered by magic crystals

What is a key difference between fiat currency and digital currency like Bitcoin?

Fiat currency is issued by governments; Bitcoin is decentralized

What is double spending?

Spending the same digital currency twice

How does blockchain prevent double spending?

Through distributed consensus and transaction verification

What was a major factor in the 2021 Bitcoin price surge?

Institutional adoption

Bitcoin reached nearly $20,000 during which major market event?

The 2017 crypto bull market

What is sharding in Ethereum?

Breaking the blockchain into smaller parts to increase scalability

Which factor strongly influences Bitcoin's price?

All of the above

What are stablecoins designed to do?

Maintain a stable value by pegging to another asset

What is Bitcoin?

A digital currency

One important feature of blockchain is:

Transparency

The Byzantine Generals Problem is about:

Agreeing on information in a network

Bitcoin mining requires a lot of:

Electricity

A smart contract is:

Code that runs automatically on a blockchain

Which factor significantly affects Bitcoin's valuation?

Supply and demand

NFTs are:

Unique digital assets

Blockchain history began primarily with:

Bitcoin

Cryptography in blockchain ensures:

Data is encrypted and secure

Which event marks the creation of the first blockchain?

Bitcoin whitepaper release in 2008

The history of Bitcoin's price is characterized by:

A stable, slow increase in value

Which of the following is NOT an advantage of digital currencies like Bitcoin over physical fiat currency?

Being backed by a physical commodity like gold

Which of the following are examples of real-world use cases for DeFi applications on Ethereum?

A, B, and C

What is the primary purpose of a "stablecoin"?

To maintain a peg to a stable asset (like the US Dollar) to reduce volatility

What makes a Non-Fungible Token (NFT) different from an ERC-20 token like Ethereum or a fungible token?

NFTs have unique properties and cannot be exchanged on a one-to-one basis with other tokens

In Bitcoin, why are blocks linked together using hashes of previous blocks?

To ensure immutability and detect tampering

What was CryptoKitties?

A blockchain game where users collect and breed digital cats

Which of the following is a common consensus mechanism?

Proof of Work

Why is Bitcoin mining often criticized environmentally?

It consumes large amounts of electricity

What is "fiat currency"?

Currency issued by governments and not backed by a commodity

Which type of blockchain requires permission to join and is typically used by private organizations?

Private/Permissioned Blockchain

Looking at Bitcoin's price history, what occurred during the "Halving" events?

The reward for mining new blocks was cut in half

A "Hard Fork" in a blockchain occurs when:

There is a permanent divergence from the previous version of the blockchain, creating two separate paths

What does "NFT" stand for in the context of Ethereum?

Non-Fungible Token

What is the main purpose of a "Stablecoin"?

To maintain a stable value pegged to a real-world asset (like the US Dollar) to reduce price volatility

Decentralized Finance (DeFi) refers to:

Financial services built on blockchain without traditional intermediaries

What was CryptoKitties known for?

One of the first popular NFT blockchain games

One major problem with the Ethereum blockchain historically has been:

Splitting the blockchain into smaller parts to improve scalability

What is a fork in blockchain?

A change in the protocol creating a new version of the blockchain

A hybrid blockchain combines features of:

Public and private blockchains

What is sharding in Ethereum?

Dividing the blockchain into smaller pieces to improve scalability

Ethereum is best known for enabling:

Smart contracts

What is double spending?

Spending the same digital currency more than once

Why is Bitcoin mining criticized environmentally?

It consumes large amounts of electricity

Who introduced Bitcoin in 2008?

Satoshi Nakamoto

What consensus mechanism secures the Bitcoin network?

Proof of Stake

What is the double-spending problem?

Attempting to spend the same digital currency more than once

Ethereum differs from Bitcoin primarily because Ethereum:

Only stores financial transactions

What are Non-Fungible Tokens (NFTs)?

Identical digital coins

What is a stablecoin in cryptocurrency markets?

A cryptocurrency that can only be mined with special hardware

What was CryptoKitties?

A blockchain game where users collect digital cats

What is Decentralized Finance (DeFi)?

Financial services built on blockchain without intermediaries

What is a fork in blockchain?

A split in the blockchain creating two versions of the ledger

What is double spending?

Spending the same digital currency twice

Who introduced Bitcoin?

Satoshi Nakamoto

What is a block in blockchain?

A collection of verified transactions linked to previous blocks

What is the maximum supply of Bitcoin?

21 million

What activity allows users to create a new CryptoKitty?

Breeding two existing CryptoKitties

Why did CryptoKitties cause congestion on Ethereum?

Too many smart contract and breeding transactions were executed

What is sharding in blockchain technology?

Splitting the network into smaller pieces to improve scalability

What makes NFTs different from cryptocurrencies like Bitcoin?

NFTs are unique and not interchangeable

On which blockchain were NFTs first widely popularized?

Ethereum

What was CryptoKitties known for?

One of the first popular NFT games on Ethereum

Which real-world use case is commonly associated with NFTs?

Digital art ownership

What is one factor that gives NFTs value?

Scarcity enforced by blockchain technology

What is the purpose of a consensus mechanism in blockchain?

To ensure all participants agree on the state of the ledger

Why is Bitcoin mining often criticized environmentally?

It consumes large amounts of electricity

Which statement best describes Ethereum's long-term goal?

To become a global decentralized computing platform

Which of the following is a major challenge for the Ethereum blockchain?

Network congestion and high transaction fees

Ether (ETH) is:

The native cryptocurrency used on the Ethereum network

Why are stablecoins important in cryptocurrency markets?

They reduce volatility and facilitate trading

Which is a major use case of Decentralized Finance (DeFi) on Ethereum?

Lending and borrowing without intermediaries

What are NFTs (Non-Fungible Tokens)?

Unique digital assets recorded on a blockchain

Which project famously demonstrated NFTs through digital collectibles?

CryptoKitties

A major problem historically associated with the Ethereum blockchain is:

Network congestion and high transaction fees