Cryptocurrency Fundamentals and Wallets BFC Practice Questions (Page 3)

Questions 11–15

1. 11expert · medium

   A user's hardware wallet is lost. They have a 24-word recovery phrase stored in a bank safe deposit box. They also have a second hardware wallet of the same model. What is the correct procedure to restore access to their funds?

   • AUse the public address to request a private key reset from the blockchain network.
   • BBuy a new hardware wallet and create a new wallet, then transfer funds from the old address using a recovery service.
   • CContact the hardware wallet manufacturer to recover the private keys from the lost device.
   • DInitialize the new hardware wallet and enter the 24-word recovery phrase when prompted.
   Reveal Solution Discussion Select an answer first
2. 12foundation · easy

   In the context of cryptocurrency, what role does the blockchain play?

   • AIt is a centralized server that processes and validates all cryptocurrency transactions.
   • BIt acts as a public, immutable ledger that records all transactions in a chronological order.
   • CIt is a payment gateway that converts cryptocurrency to fiat currency.
   • DIt is a private database that stores users' passwords and private keys.
   Reveal Solution Discussion Select an answer first
4. 13application · medium

   A user accidentally shares their public address with a malicious actor. The malicious actor also obtains the user's public key. What can the malicious actor do with this information?

   • AThey can impersonate the user by creating a valid signature.
   • BThey can view the user's transaction history and balance.
   • CThey can freeze the user's funds by reporting the address.
   • DThey can spend the user's funds by deriving the private key from the public key.
   Reveal Solution Discussion Select an answer first
5. 14expert · hard

   A user's transaction has been broadcast but is stuck in the mempool with a low fee. The network is congested. What is the most effective way to get the transaction confirmed?

   • AWait for the network congestion to clear, as the transaction will eventually be mined
   • BCancel the transaction by sending a conflicting transaction with a higher fee
   • CContact the mining pool to prioritize the transaction
   • DIncrease the fee by editing the original transaction directly
   Reveal Solution Discussion Select an answer first
6. 15application · medium

   A blockchain network wants to reduce its energy consumption while still maintaining decentralization and security. The team is considering switching from Proof of Work to Proof of Stake. What is a key trade-off they should evaluate?

   • AProof of Stake makes transactions irreversible, so there is no need for consensus
   • BProof of Stake eliminates the need for a blockchain, so the network becomes centralized
   • CProof of Stake requires more computational power, increasing energy use
   • DProof of Stake relies on validators locking up tokens, which could concentrate power among the wealthy
   Reveal Solution Discussion Select an answer first