Chapter A3. Exploring the Bitcoin Whitepaper Flashcards
4 important elements to achieve decentralization:
1) Consensus Mechanism
2) Public Key Cryptography
3) Decentralized algorithm such as proof of work
4) The Blockchain
What is a hash?
Hash is a summary of digital information. We use it to sumarize information. It has the following characteristics: unique.
What do you need to create a hash?
A hash function and an algorithm
Coin based transaction is…
the first one to happen in a block.
It is like a paycheck minors would get if they are able to win the competition of proof of work and they will get two different incentives: fee of transactions and the block reward.
block reward is…
amount of reward that is created when a block is mined.
all other transactions on the blockchain (other than coin based) have …
inputs and outputs, which means
UTXO
transaction until is confirmed
Timestamp server…
information that is added in the header of the block whenever the next block is being mined.
Nounce:
is included in the header of the block.
The proof of work involves scanning for a value that when hashed, the hash begins with…
a number of zero bits.
According to the Bitcoin Whitepaper, the four elements/ technologies that are crucial to achieve decentralization are:
Select one or more:
a. a centralized algorithm
b. blockchain
c. public key cryptography
d. consensus mechanism
b,c and d
Miners get something like a paycheck if they make it to win the competition of proof of work in the Bitcoin blockchain. Basically, they are receiving two different incentives:
Select one or more:
a. the block reward
b. a new chain
c. the fee of all the transactions that are in the block
d. money
a and c
A person who receives Bitcoin needs to show to the world his or her public key.
Select one:
True
False
true
Digital signatures allow the rest of the network to see that someone is the authentic owner of the money that he/she is transferring to…
Select one or more:
a. another person
b. the blockchain
c. the bank
d. an indermediary
a
Satoshi Nakamoto, the author of the Bitcoin Whitepaper, is providing/ suggesting a solution to the following problems:
Select one or more:
a. double spending problem
b. need of an intermediary
c. centralization of power
d. decentralization of power
a, b and c
The network timestamps transactions by hashing them into an ongoing chain of hash-based…
Select one or more:
a. proof of work
b. proof of stake
c. digital ledger
d. blockchain
a
The real person who published the Bitcoin whitepaper is unknown.
Select one:
True
False
TRUE
The Bitcoin blockchain is immutable.
Select one:
True
False
TRUE
Blockchain is the only element behind bitcoin to achieve decentralization.
Select one:
True
False
FALSE
With the Bitcoin blockchain, you can transfer money, but you need a financial institution to help you make this transaction.
Select one:
True
False
FALSE
The _____ reward is the amount of bitcoin created every time a block is mined.
block
The ______ key is like a personal password for someone to access his/her Bitcoin.
private
Whenever you want to transfer Bitcoin to someone else you need to create a ______ signature.
digital
bitcoin is a distributed network based on …
computers which are nodes.
What are the steps of the network? How does ir work?
- new transactions are broadcast to all nodes
- each node collects new transactions into a block
- each node (miners) works on finding a difficult proof-of-work for its block
- when a node finds a proof-of-work, it broadcasts the block to all nodes
- nodes accept the block only if all transactions in it are valid and not already spent
- nodes express their acceptance of the block by working on creating the next block in the chain, using the hash of the accepted block as the previous hash.
block reward value currently
6.25
bitcoin is always evolving
TRUE OR FALSE
TRUE
just like the internet.
Merkle tree is…
a structure used for efficiency and security (immutability).
it includes the block header and the merkle root
block header with no transactions is about ____ bytes
80
simplified payment verification
It is possible to verify payments without running a full network node. The user only needs to keep a copy of the block headers of the longest proof-of-work chain.
You only need the block header to verify payments.
All miners in the Bitcoin blockchain are in a competition with each other.
Select one:
True
False
true
Blockchain is a chain of intermediaries.
Select one:
True
False
false
When it comes to transactions in Bitcoin, the sum of the inputs needs to be greater than the sum of the outputs.
Select one:
True
False
true
In the Bitcoin blockchain, nodes are constantly communicating with each other about …
Select one or more:
a. what has already happened in the system before
b. rules
c. digital signatures
d. the true and valid reality of the system
a, b and d
Satoshi is calling the miners nodes.
Select one:
True
False
true
Whenever I want to make a transaction, I need to pay a fee.
Select one:
True
False
true
In the Bitcoin blockchain, the rewards for mining are…
Select one or more:
a. new blocks
b. the fees of all the transactions
c. block reward
d. money
b and c
Once a transaction is secured in a block on the Bitcoin blockchain, that information can be modified.
Select one:
True
False
false
