Cryptocurrency Fundamentals and Wallets BFC Practice Questions (Page 4)

Questions 16–20

1. 16application · medium

   A developer is building a custom cryptocurrency and wants to ensure that each transaction cannot be altered after it is signed. Which property of cryptographic hashing is most directly responsible for this?

   • ADeterministic output, which always produces the same hash for the same input
   • BAvalanche effect, where a small change in input produces a completely different hash
   • CCollision resistance, which prevents two different inputs from having the same hash
   • DPreimage resistance, which makes it infeasible to find the original input from the hash
   Reveal Solution Discussion Select an answer first
2. 17foundation · easy

   What is a primary difference between a cryptocurrency and traditional fiat currency?

   • AFiat currency uses cryptography to secure transactions, while cryptocurrency does not.
   • BFiat currency is always digital, while cryptocurrency is always physical.
   • CFiat currency is issued by a central authority, while cryptocurrency is typically issued through a decentralized process.
   • DCryptocurrency is backed by gold, while fiat currency is backed by government decree.
   Reveal Solution Discussion Select an answer first
4. 18foundation · easy

   How do digital signatures secure a cryptocurrency transaction?

   • AThey hide the sender's identity by using a pseudonymous address.
   • BThey encrypt the transaction so that only the recipient can decrypt it.
   • CThey prove that the transaction was authorized by the owner of the private key and that the data has not been altered.
   • DThey speed up transaction confirmation by reducing the amount of data transmitted.
   Reveal Solution Discussion Select an answer first
5. 19foundation · easy

   What is a key security trade-off between hot wallets and cold wallets?

   • AHot wallets are regulated by governments, while cold wallets are not.
   • BHot wallets can only store one cryptocurrency, while cold wallets can store multiple.
   • CHot wallets are always free, while cold wallets always require a subscription fee.
   • DHot wallets are more convenient for frequent transactions but are more vulnerable to online attacks; cold wallets are more secure but less convenient.
   Reveal Solution Discussion Select an answer first
6. 20expert · hard

   A proof-of-work blockchain is facing a 51% attack. The attacker now controls the majority of the network's hash rate. Which action is most likely to mitigate the attack?

   • AAsk the community to hard fork to a new proof-of-work algorithm that the attacker has not invested in
   • BIncrease the block reward to incentivize honest miners to return
   • CIncrease the difficulty of the mining puzzle to make it harder for the attacker
   • DFreeze the attacker's funds by coordinating with exchanges
   Reveal Solution Discussion Select an answer first