Bitcoin Consensus Mechanisms Explained Quiz

1. What is the primary function of a consensus mechanism in the Bitcoin blockchain?

• To ensure cryptocurrency transactions are valid before they are added to the blockchain database.
• To enable users to exchange coins easily with each other.
• To create new cryptocurrencies during the mining process.
• To control the number of miners in the network.

2. What does the term `Genesis block` refer to in Bitcoin?

• A decentralized exchange
• A type of cryptocurrency
• A Bitcoin wallet
• The first block in a blockchain

3. Explain the concept of Proof of Work (PoW) in Bitcoin.

• A technique to lock user funds in a non-retrievable wallet for added safety.
• A technology that enables immediate transaction approvals without verification.
• A consensus mechanism that involves solving a computationally challenging puzzle to create new blocks in the Bitcoin blockchain.
• A method of securing transactions using quantum computing algorithms to enhance speed.

4. How often does the target hash adjust in Bitcoin`s Proof of Work algorithm?

• Once every 500 blocks or about once every month.
• Once every 144 blocks or about once every day.
• Once every 100 blocks or about once every week.
• Once every 2016 blocks or approximately once every 2 weeks.

5. What is a nonce`s role in Bitcoin`s mining process?

• To determine the transaction fees for miners when they create new blocks.
• To adjust variable fields until a hexadecimal number is reached that has a lower value than the network`s difficulty target.
• To encrypt the transactions before they are added to the blockchain.
• To verify the identity of the miners participating in the network.

6. Name the four fields that make up a block header in Bitcoin.

• Block size, transaction counter, public key, and miner reward.
• Network difficulty, transaction ID, sender address, and receiver address.
• Software version, previous block`s hash, Merkle root, and timestamp.
• Ledger timestamp, nonce value, stack height, and data root.

7. Why is the Merkle root significant in Bitcoin blocks?

• It prevents miners from earning rewards.
• It provides a cryptographic hash of all transactions in the block.
• It defines the maximum block size allowed.
• It stores the metadata of the block`s creator.

8. What does the difficulty target do in Bitcoin mining?

• To define the maximum size of a block in the blockchain.
• To determine the minimum hash value required for a new block to be accepted.
• To increase the speed of transactions in the blockchain.
• To regulate the temperature of the mining hardware used.

9. How are miners compensated in the Bitcoin network?

• Miners are paid in cash based on transaction fees.
• Miners receive a fixed salary from the network.
• Miners earn points that can be redeemed for goods.
• Miners receive block rewards in return for validating blocks.

10. In what way do consensus mechanisms streamline the mining process?

• By increasing transaction fees for miners.
• By centralizing control to a single authority.
• By eliminating the need for network nodes.
• By validating transactions and ensuring miners are rewarded.

11. State the primary aim of consensus mechanisms in decentralized databases like Bitcoin.

• To randomly assign ownership of assets without verification.
• To enforce strict regulations on all participants to ensure compliance.
• To make it safe to do business with people you don’t know or trust by ensuring that transactions are valid and not altered.
• To eliminate all forms of transaction fees in the system.

12. Define Proof of Stake (PoS) in relation to Bitcoin.

• A method to mine new coins using high computational power.
• A consensus mechanism where validators invest in the coins of the system by locking up some of their coins as stakes.
• A process that allows unlimited transactions without verification.
• A system that rewards miners based solely on their electricity consumption.

13. How is a validator chosen in a Proof of Stake system?

• Validators are appointed by the network administrator.
• Validators are chosen based on their economic stake in the network.
• Validators are randomly selected without any criteria.
• Validators are chosen based on their transaction history.

14. What distinguishes Delegated Proof of Stake (DPoS) from traditional PoS?

• Everyone votes on all decisions made.
• Validators are chosen randomly without input.
• Only those with the most coins can vote.
• Users delegate their votes to other users.

15. How does Proof of Capacity utilize hard drive space in validation?

• By requiring miners to purchase specialized equipment only.
• By utilizing hard drive space to store data for block validation.
• By sending confirmations via a separate communication network.
• By using graphical processing units for extensive calculations.

16. Describe the essence of Proof of Elapsed Time (PoET) in blockchain consensus.

• A technique that requires participants to stake their cryptocurrency to gain the right to validate transactions.
• A method where validators must solve complex puzzles to add new blocks to the blockchain.
• A protocol that assigns block creation based on the amount of transaction fees paid by users.
• A consensus algorithm where validators wait for a random amount of time and the validator with the least timer value creates the next block.

17. List two advantages of using consensus mechanisms in Bitcoin.

• Automatically generating new cryptocurrencies for all users every month.
• Increasing transaction fees to miners for every block processed.
• Ensuring transaction validity, preventing double-spending, and maintaining network synchronization.
• Allowing any user to modify the blockchain without verification.

18. Why is the consensus mechanism vital for Bitcoin`s reliability?

• It ensures the integrity and security of the Bitcoin network by validating transactions and creating new blocks.
• It decreases the energy consumption of the Bitcoin network significantly.
• It centralizes the decision-making power among a few large miners.
• It allows users to trade Bitcoin freely without any restrictions.

19. What information does the timestamp in a Bitcoin block header convey?

• To show the time of transaction approval.
• To indicate the block`s size in bytes.
• To link the current block to the past transactions.
• To record the number of transactions in the block.

20. Explain how Practical Byzantine Fault Tolerance (PBFT) operates in blockchain.

• PBFT uses a single vote from the node with the highest power to finalize decisions.
• PBFT functions by randomly selecting nodes to create new blocks without consensus.
• PBFT operates by having nodes reach consensus through multiple rounds of voting, requiring a supermajority to approve transactions.
• PBFT relies solely on the fastest node to determine transaction validity.

21. How are consensus mechanisms tied to constructing blocks in Bitcoin?

• Blocks are created without any validation.
• Block construction validates past transactions.
• Blocks are created randomly without rules.
• Consensus mechanisms eliminate all miners.

22. What is the function of the transaction counter in a block header?

• To record the block`s creator`s identity.
• To keep track of the number of transactions in the block.
• To indicate the block`s size in bytes.
• To list the block`s transaction fees.

23. How do consensus mechanisms enable transactions without trust?

• By ensuring all participants know each other personally before transactions occur.
• By relying on a central authority to approve each transaction for users.
• By using physical cash transactions to build trust and verify identities.
• By validating transactions without requiring human judgment, ensuring that people don’t spend the same crypto twice or buy things without paying for them.

24. What is the difference between public and private blockchains?

• Private blockchains are only for personal use and cannot be accessed by anyone else.
• Public blockchains are always faster than private blockchains, which operate slowly.
• Public blockchains are centralized while private blockchains are decentralized.
• Public blockchain networks are permissionless and non-restrictive, while private blockchain networks operate on a closed network with restricted access and control privileges.

25. What overarching goal influenced the creation of Bitcoin?

• To launch a global stock exchange.
• To create a peer-to-peer electronic cash system.
• To establish a decentralized social media platform.
• To develop a digital identity verification system.

26. How does the Proof of Work model validate transactions on the Bitcoin network?

• By allowing anyone to approve transactions without validation.
• By requiring miners to solve a computationally challenging puzzle to create new blocks.
• By automatically validating all transactions in real-time.
• By using random numbers to authenticate transaction data.

27. What does the block size indicate in a Bitcoin block header?

• It indicates the size of the block, which can affect the number of transactions it can hold.
• It represents the time taken to mine the block.
• It shows the number of miners participating in the network.
• It determines the level of encryption used for transactions.

28. How does the Merkle root contribute to transaction integrity in Bitcoin?

• It provides a cryptographic hash of all transactions in the block, ensuring their integrity.
• It creates a random number for each transaction to prevent duplicate entries.
• It stores transaction timestamps for future audit trails.
• It encrypts user data to protect personal information during transactions.

29. What triggers the adjustment of the difficulty target in mining?

• The difficulty target is set randomly by the miners.
• The difficulty target adjusts once every 2016 blocks or approximately once every 2 weeks.
• The target hash changes every hour during peak times.
• The adjustment occurs automatically every day at midnight.

30. Why is the software version included in a Bitcoin block header?

• To register user identities for transactions.
• To store the transaction history of the block.
• To specify the amount of cryptocurrency transferred.
• To indicate the version of the software used to create the block.