Blockchain Wallets and Key Management Techniques BBLC Practice Questions (Page 7)

Questions 31–35

1. 31application · medium

   A company has a multi-signature wallet with a 2-of-3 configuration. One of the three key holders resigns and takes their hardware wallet. The company still has two hardware wallets with valid keys. What is the best course of action to maintain the same wallet address and continue operations?

   • AContinue using the existing two keys; the 2-of-3 wallet still functions with two signatures
   • BRecover the departed employee's key from the company's backup server
   • CAsk the departed employee to sign a transaction before they leave
   • DCreate a new 2-of-2 wallet and transfer all funds to it
   Reveal Solution Discussion Select an answer first
2. 32application · medium

   An employee receives a phone call from someone claiming to be IT support, asking the employee to read out their wallet's recovery phrase to 'verify account ownership'. The employee has a hardware wallet. What should the employee do?

   • AShare the phrase because the hardware wallet requires a PIN to use it
   • BRefuse to share the phrase and report the call to the real IT department
   • CShare the phrase and then change the wallet's PIN
   • DShare the phrase only if the caller provides a valid employee ID number
   Reveal Solution Discussion Select an answer first
4. 33application · medium

   A company's compliance team requires that no single employee can move funds from the corporate treasury wallet. They also want to ensure that if one employee leaves, the wallet can still be operated without recreating it from scratch. Which key management technique should they implement?

   • AA 2-of-3 multi-signature wallet with keys held by three different employees
   • BA custodial wallet with two-factor authentication on a single account
   • CA single private key split into three parts using Shamir's Secret Sharing
   • DA hardware wallet with a PIN known only to the CFO
   Reveal Solution Discussion Select an answer first
5. 34foundation · easy

   What is the primary purpose of a mnemonic phrase (seed phrase) in a blockchain wallet?

   • ATo provide a human-readable address for receiving funds
   • BTo authenticate the user to the blockchain network
   • CTo allow the wallet to be backed up and restored by deriving the private keys from the phrase
   • DTo serve as a password for encrypting the wallet file
   Reveal Solution Discussion Select an answer first
6. 35application · medium

   A wallet developer wants to allow users to generate multiple receiving addresses from a single backup phrase, so that users can use a new address for each transaction for privacy. The developer also wants to ensure that the backup phrase alone can restore all addresses. Which wallet architecture should the developer choose?

   • AA multi-signature wallet that requires multiple signatures for each address
   • BHierarchical deterministic (HD) wallet that derives child keys from a master seed
   • CA non-deterministic wallet that generates each private key independently
   • DA custodial wallet where the provider generates addresses on behalf of the user
   Reveal Solution Discussion Select an answer first