Cryptocurrency Fundamentals and Wallets BFC Practice Questions (Page 9)

Questions 41–45

1. 41application · medium

   A fintech startup is building a non-custodial wallet app. A user reports that they can see their balance and receive funds, but when they try to send a transaction, the app prompts them for a password that they never set up. The support team confirms the wallet was created correctly and the public address is active on the blockchain. What is the most likely cause of this issue?

   • AThe private key is encrypted with a password-derived key, and the user must enter that password to decrypt the key for signing.
   • BThe wallet app is trying to connect to a remote node and requires the user's node API key as a password.
   • CThe wallet app is using a hierarchical deterministic (HD) wallet and the user must enter the mnemonic passphrase each time they send funds.
   • DThe wallet is a multi-signature wallet and requires the user to provide a second signature from a hardware device.
   Reveal Solution Discussion Select an answer first
2. 42application · medium

   A user has a non-custodial software wallet on their phone and wants to back it up securely. They ask you for the best practice. What should you recommend?

   • ATake a screenshot of the private key and save it in the phone's photo gallery
   • BWrite down the 12-24 word recovery seed phrase on paper and store it in a safe deposit box
   • CEmail the private key to yourself so you can access it from any device
   • DStore the wallet's private key in a password manager that syncs to the cloud
   Reveal Solution Discussion Select an answer first
4. 43application · medium

   A company is evaluating blockchain-based fundraising options. They want to issue digital assets that represent equity in their startup, giving holders voting rights and a share of profits. Which type of digital asset should they issue?

   • AA governance token that only allows voting on protocol changes
   • BA security token that is compliant with securities regulations
   • CA payment coin such as Bitcoin
   • DA utility token that provides access to the company's future platform
   Reveal Solution Discussion Select an answer first
5. 44foundation · easy

   What is the primary role of cryptographic hashing in a cryptocurrency transaction?

   • ATo generate a private key from a public key.
   • BTo compress the transaction data to reduce block size.
   • CTo create a fixed-length digital fingerprint of transaction data that ensures integrity and links blocks together.
   • DTo encrypt the transaction so that only the sender and receiver can read it.
   Reveal Solution Discussion Select an answer first
6. 45foundation · easy

   What is the relationship between a private key and a public key in cryptocurrency?

   • ABoth keys are generated independently and are not mathematically related.
   • BThe private key is used to encrypt data, and the public key is used to decrypt it.
   • CThe public key is derived from the private key using a one-way cryptographic function.
   • DThe private key is derived from the public key using a one-way cryptographic function.
   Reveal Solution Discussion Select an answer first