Bitcoin Introduction

Question 1

What two parts make up every Bitcoin transaction?

Answer 1

Inputs (references to UTXOs + signatures) and Outputs (recipient addresses + amounts).

Question 2

When is a transaction input spendable?

Answer 2

If it references an unspent output (UTXO) and is signed by the owner’s private key.

Question 3

Define UTXO.

Answer 3

Unspent Transaction Output — a spendable chunk of bitcoin recorded on the blockchain.

Question 4

Give the four-step lifecycle of a Bitcoin transaction.

Answer 4

Create & sign → Broadcast → Peers validate & store in mempool → Miner confirms in a block.

Question 5

Describe Bitcoin’s Proof‑of‑Work puzzle in one line.

Answer 5

Find a nonce that makes the block hash fall below the current difficulty target.

Question 6

Why is mining vital to Bitcoin?

Answer 6

It validates/chronologises transactions and mints new BTC without a central authority.

Question 7

How is the 10‑minute block interval enforced?

Answer 7

Difficulty adjusts every 2016 blocks so average PoW solve time remains ~10 min.

Question 8

What does a miner receive for a valid block?

Answer 8

Block subsidy (halving every ~4 years) plus transaction fees.

Question 9

State Bitcoin’s maximum supply and its deflationary mechanism.

Answer 9

Capped at 21 million BTC via block‑reward halvings until ~2140.

Question 10

Why does address reuse harm Bitcoin privacy?

Answer 10

Repeated use links transactions, making it easier to deanonymise the user.