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crypto > quizzes 1-3 > Flashcards

quizzes 1-3 Flashcards

1
Q

For most modern-day currencies, which institution sits at the core of the system?

A

central banks

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2
Q

The emergence of chartered public banks, improved efficiency, and other operations needed to support a viable currency. This growth is an example of:

A

centralization

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3
Q

Which of the following is not a fundamental role of money:

  • Unit of Account
  • Security for Investment
  • Store of Value
  • Medium of Exchange
A

security for investment

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4
Q

The issuer of money can be:

  • private banks
  • central banks
  • nobody
  • merchants
A

private banks, central banks, and nobody

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5
Q

An important contributor to safety and cost-effectiveness of payment systems is _______

A

scalability

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6
Q

There is a long history of currencies being easily debased, this issue violates which fundamental role of money?

A

store of value

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7
Q

Evaluate the following statements(true or false)

1) Money can be physical or digital
2) Money must be widely accessible

A

true - false

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8
Q

Why are commodity monies not well suited for use as currency?

A

cumbersome to exchange

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9
Q

Finality of payment requires the system to…

A

be free of fraud

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10
Q

Which risk factors necessitated a switch away from the crude “I owe you” system of trade, to the use of money/currencies (select all that apply)?

  • settlement risk
  • default risk
  • complexity risk
  • interest rate risk
  • liquidity risk
A

settlement risk and default risk

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11
Q

When faced with multiple chains of transactions, nodes will always select which chain?

A

the longest chain

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12
Q

The greatest risk to the bitcoin system is via:

A

a cooperating group of attacker nodes

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13
Q

Bitcoin’s distributed timestamp server utilizes which verification system?

A

proof of work

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14
Q

Evaluate the following statements(true or false)

1) nodes work simultaneously in a coordinated fashion to ensure the Bitcoin system stays honest
2) nodes can leave and rejoin the network at will

A

false - true

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15
Q

Evaluate the following statements:

1) new transaction broadcasts must reach all nodes to be valid
2) currently, the primary incentive to participate in managing the bitcoin universe is transaction fees

A

false - false

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16
Q

One major issue solved by Bitcoin (not previously available) was

A

the double-spending problem

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17
Q

One issue associated with the involvement of financial institutions in money is

A

small casual transactions are not viable

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18
Q

Evaluate the following statements:

1) bitcoin was the first digital currency
2) bitcoin is the first example of using a timestamp server

A

false - false

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19
Q

Evaluate the following statements:

1) in the bitcoin system, all transactions must be announced publicly
2) in the bitcoin system privacy is maintained via the use of anonymous private keys

A

true - true

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20
Q

Representation within the Bitcoin system is based on

A

one-CPU-one-vote

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21
Q

The maximum number of bitcoin that will ever be in circulation is

A

21 million

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22
Q

select all that apply. What incentive(s) is/are in place to encourage Bitcoin users to maintain the peer-to-peer network and be nodes for the authentication of transactions?

  • free coins
  • control over new ledgers
  • transaction fees
  • higher bitcoin price
  • increased voting rights
  • the system does not require incentives
A

free coins and transaction fees

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23
Q

Evaluate the following statements

1) The verification of all new ledger updates by the network of miners and users is essential to incentivize miners to add only valid transactions
2) Communication lags can lead to different miners adding conflicting updates

A

true - true

24
Q

If users wish to update the protocol and start a new ledger, they may do so via what process

A

forking

25
Q

How do cryptocurrencies solve the double-spending problem?

A

distributed ledger

26
Q

To be fully decentralized, transactions must be recorded and changed by

A

consensus

27
Q

Select all that apply. Which of the following elements help ensure cryptocurrencies do not fall prey to the misguided incentives existing within the existing banking/monetary system

  • Ledger
  • Protocol
  • Proof-of-Work
  • Forking
  • Private Keys
  • Nodes
A

ledger and nodes

28
Q

Private digital money existed for decades prior to Bitcoin(true or false)

A

true

29
Q

Evaluate the following statements

1) it is possible for someone to forge a cryptocurrency
2) The more people use Bitcoin as a medium of exchange, the more efficient the payment system becomes

A

true - false

30
Q

Bitcoin implemented its distributed ledger across the peer-to-peer network and utilized what system to authenticate transactions

A

proof-of-work

31
Q

The bitcoin protocol ______ be changed/amended; conflicting transaction ________ be added to the same block candidate(can or cannot)

A

can - cannot

32
Q

The average time between Bitcoin blocks is

A

10 minutes

33
Q

The first block of the Bitcoin blockchain (Block #0) was created in

A

2009

34
Q

Which network is the current leader in the field of smart contracts?

A

Ethereum

35
Q

Evaluate the following statements

1) Bitcoin has no intrinsic value
2) traditional currencies (e.g. US Dollar, Euro, Yen, etc) have no intrinsic value

A

true - true

36
Q

Satoshi Nakamoto’s original motivation behind Bitcoin was to create a(n)

A

electronic cash-like payment system

37
Q

The reward for Bitcoin miners is halved approximately every`

A

4 years

38
Q

Evaluate the following statements

1) there is no single instance of the bitcoin blockchain
2) miners collect bitcoin transactions and verifies their legitimacy, in so doing, the miners ensure bitcoin will rise to a higher price

A

true - false

39
Q

Evaluate the following statements

1) only people with sophisticated, high powered computers can become miners
2) Mining is an expensive task to undertake for most individuals

A

false - true

40
Q

The smallest fraction of a bitcoin is known as a

A

Satoshi

41
Q

It is not possible to undo a transaction when using Bitcoin Cash(true or false)

A

true

42
Q

Which of the following factors contribute to the future value of a cryptocurrency

  • Price Level
  • Usage
  • Market Cap
  • Mining Reward
  • Demand
  • Adoption
A

usage, demand, and adoption

43
Q

When comparing Bitcoin and Bitcoin Cash, ____ appears to be focused on storing value, while ____ is focused on medium of exchange(bitcoin or bitcoin cash)

A

bitcoin - bitcoin cash

44
Q

When comparing Bitcoin and Bitcoin Cash, ____ has a slower processing time and ____ has lower transaction fees(bitcoin or bitcoin cash)

A

bitcoin - bitcoin cash

45
Q

When a cryptocurrency has a hard fork, the outcome is a

A

brand new crypto

46
Q

Smart Contracts are most analogous to

A

if-then statements

47
Q

Who is responsible for running smart contract operations (i.e. executing the smart contracts)?

A

miners

48
Q

Which cryptocurrency is used as a transaction fee to incentivize miners to include your transaction on the Ethereum blockchain

A

ether

49
Q

Who is the founder of Ethereum?

A

Vitalik Buterin

50
Q

Ethereum was the first instance of blockchain technology enabling…

A

decentralized applications

51
Q

The creator of a dApp owns the application and generates fee income each time the application is used(true or false)

A

false

52
Q

The more people use Ethereum based applications, the higher the value associated with ether(true or false)

A

true

53
Q

____ is used to run applications on the Ethereum blockchain

A

ether

54
Q

What is the current mining reward per block on the ethereum blockchain?

A

2 ETH

55
Q

Ether is less a digital currency and more analogous to a

A

digital commodity

56
Q

Ethereum miners are compensated in

A

ether

57
Q

The smallest denomination of Ether is called a

A

WEI

crypto (2 decks)

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