Mining Techniques BDC Practice Questions (Page 1)

Questions 1–5

1. 1application · medium

   A startup is evaluating whether to mine a PoW cryptocurrency. They have access to cheap electricity but limited capital. They are comparing GPU rigs and ASIC miners. The coin's algorithm is ASIC-resistant. Which hardware choice and economic reasoning best fits their situation?

   • APurchase a mix of GPUs and ASICs to hedge against algorithm changes.
   • BPurchase GPUs because they are effective on ASIC-resistant algorithms and can be resold if mining becomes unprofitable.
   • CPurchase CPUs because they are the cheapest upfront and consume the least electricity.
   • DPurchase ASICs because they always have the highest hash rate and therefore the best profitability.
   Reveal Solution Discussion Select an answer first
2. 2application · medium

   A blockchain network has seen a sudden influx of new miners, doubling the total hash rate. The network targets a 10-minute block time. What should happen to maintain the target block time?

   • AThe difficulty will increase at the next adjustment period, making it harder to find a valid block.
   • BThe network will switch to a PoS consensus to reduce energy consumption.
   • CThe block reward will be halved to slow down block production.
   • DThe block time will permanently decrease to 5 minutes.
   Reveal Solution Discussion Select an answer first
4. 3foundation · easy

   Which of the following is NOT a primary factor in calculating mining profitability?

   • ACurrent market price of the mined cryptocurrency
   • BThe color of the mining hardware
   • CElectricity cost per kilowatt-hour
   • DHash rate of the mining hardware
   Reveal Solution Discussion Select an answer first
5. 4foundation · easy

   In Proof of Authority (PoA), what determines who is allowed to validate transactions and create blocks?

   • AThe number of transactions the validator has processed
   • BThe validator's identity and reputation
   • CThe validator's computational power
   • DThe amount of cryptocurrency staked
   Reveal Solution Discussion Select an answer first
6. 5foundation · easy

   What is a 'block reward' in a PoW cryptocurrency like Bitcoin?

   • AThe total amount of cryptocurrency in circulation
   • BThe fee paid to miners for including a transaction in a block
   • CThe interest earned by staking coins in a proof-of-stake system
   • DThe newly created coins given to the miner who successfully mines a block
   Reveal Solution Discussion Select an answer first