Blockchain Wallets and Key Management Techniques BBLC Practice Questions (Page 1)

Questions 1–5

1. 1expert · hard

   A wallet manufacturer is designing a new hardware wallet. The manufacturer wants to ensure that the device generates private keys with high entropy and that the recovery phrase is generated in a way that is both secure and user-friendly. Which combination of features should the manufacturer implement?

   • AUse a software random number generator on the connected computer to generate the seed, and display the recovery phrase on the computer screen
   • BGenerate the seed using a user-chosen passphrase and display it on the device screen
   • CUse a fixed seed derived from the device's serial number to simplify recovery
   • DUse a hardware random number generator (TRNG) to generate the seed, and display the recovery phrase on the device screen for the user to write down
   Reveal Solution Discussion Select an answer first
2. 2expert · hard

   A company uses an HD wallet for its operational funds. The compliance team wants to ensure that if a single private key is compromised, the attacker cannot access the entire balance. The company also wants to minimize the operational burden of moving funds between wallets. Which approach best meets both goals?

   • AUse a custodial wallet and rely on the provider's insurance
   • BStore the HD wallet's master seed in a password manager and use the same seed for all accounts
   • CUse a single-key HD wallet and rotate the master seed every month
   • DUse a multi-signature wallet that requires two of three keys for each transaction
   Reveal Solution Discussion Select an answer first
4. 3foundation · easy

   Which practice is considered a best practice for securely storing a private key?

   • AEmailing the private key to yourself for backup
   • BKeeping the private key in a plain text file on the desktop for easy access
   • CStoring the private key in a password manager that is protected by a strong master password
   • DSharing the private key with a trusted friend for safekeeping
   Reveal Solution Discussion Select an answer first
5. 4application · medium

   A small business owner wants to accept cryptocurrency payments from customers. The owner is concerned about the risk of malware on the office computer and wants to keep the private keys offline as much as possible, but still needs to make occasional transactions from the office. Which wallet type best meets these requirements?

   • AA paper wallet generated offline and used to import the private key into a software wallet for each transaction
   • BA hardware wallet connected to the office computer only when signing transactions
   • CA software wallet installed on the office computer with a strong password
   • DA custodial wallet provided by a cryptocurrency exchange
   Reveal Solution Discussion Select an answer first
6. 5foundation · easy

   Which of the following is a common phishing attack targeting blockchain wallet users?

   • AA distributed denial-of-service (DDoS) attack on the blockchain network
   • BA malware that mines cryptocurrency on the user's device
   • CA brute-force attack on the wallet's encryption password
   • DA fake website that mimics a legitimate wallet service and prompts the user to enter their recovery phrase
   Reveal Solution Discussion Select an answer first