Blockchain Wallets and Key Management Techniques BBLC Practice Questions (Page 4)

Questions 16–20

1. 16application · medium

   A company manages a cryptocurrency treasury and wants to ensure that no single employee can move funds without authorization. The company also wants to protect against the risk of a compromised employee device. Which key management technique should the company implement?

   • AA custodial wallet at an exchange with withdrawal whitelist addresses
   • BA single hardware wallet with a PIN known only to the CFO
   • CMulti-signature wallet that requires signatures from at least two of three designated executives
   • DA software wallet with a complex password stored in a shared password manager
   Reveal Solution Discussion Select an answer first
2. 17application · medium

   A user has a hardware wallet that displays a 24-word mnemonic phrase during initial setup. The user writes the phrase on a piece of paper and stores it in a desk drawer. Later, the user wants to create a backup that is more resilient to fire and theft. Which backup method is the most secure and practical?

   • ATake a photo of the paper and store it in a cloud storage account protected by a strong password
   • BStamp the mnemonic phrase onto multiple metal plates and store each plate in a separate secure location, such as a bank safe deposit box and a home safe
   • CWrite the mnemonic phrase in a notebook that is kept in the same desk drawer
   • DSend the mnemonic phrase to a trusted friend via email and ask them to keep it
   Reveal Solution Discussion Select an answer first
4. 18application · medium

   A user wants to store a large amount of cryptocurrency for long-term savings and does not plan to transact frequently. The user is concerned about both online theft and physical damage to the storage medium. Which wallet type is the most appropriate?

   • AA paper wallet laminated and stored in a drawer
   • BA mobile software wallet with biometric authentication
   • CA custodial wallet on a reputable exchange
   • DA hardware wallet kept in a fireproof safe
   Reveal Solution Discussion Select an answer first
5. 19expert · hard

   A startup wants to accept cryptocurrency payments and needs to decide between using a custodial wallet provided by a payment processor or a non-custodial hardware wallet. The startup values ease of use and automatic conversion to fiat, but is also concerned about the risk of the payment processor being hacked. Which approach best balances these concerns?

   • AUse only a custodial wallet because the payment processor has insurance
   • BUse a custodial wallet for day-to-day operations, but keep a portion of funds in a hardware wallet for long-term storage
   • CUse only a hardware wallet and manually convert cryptocurrency to fiat when needed
   • DUse a software wallet on the company's server with a strong password
   Reveal Solution Discussion Select an answer first
6. 20expert · hard

   A company's CFO receives an email that appears to be from the CEO, urgently requesting a transfer of cryptocurrency to a vendor. The email mentions a 'new vendor' and asks the CFO to use the company's hot wallet. The CFO notices the sender's email address is slightly different from the CEO's usual address. What is the most appropriate action?

   • AReply to the email asking for a phone number to confirm
   • BVerify the request through a separate, known communication channel before taking any action
   • CTransfer a small test amount first to confirm the vendor's wallet address
   • DComply with the request because the CEO has authority to approve transfers
   Reveal Solution Discussion Select an answer first