Bitcoin Demand and Supply Quiz

1. What is the primary factor that influences Bitcoin`s price?

• Popularity on social media.
• Government regulations.
• Mining costs.
• Supply and demand.

2. How does an increase in supply affect Bitcoin`s price?

• The price will stay the same.
• The price will double.
• The price will reduce.
• The price will increase significantly.

3. What happens to Bitcoin`s price if demand increases while supply remains constant?

• The price will rise.
• The price will fluctuate wildly.
• The price will remain the same.
• The price will fall.

4. What is the total supply of Bitcoin?

• 21 million
• 30 million
• 25 million
• 15 million

5. How many Bitcoins have been mined as of mid-2023?

• Approximately 15.2 million
• Approximately 22.8 million
• Approximately 19.4 million
• Approximately 18.0 million

6. What is the effect of a halving event on the supply of new Bitcoins?

• It increases the mining rewards indefinitely.
• It halves the mining rewards every four years.
• It doubles the number of Bitcoins mined.
• It eliminates all new Bitcoin creation.

7. How does the halving event affect mining profitability?

• It has no impact on mining profitability.
• It makes it harder for miners to cover their costs.
• It allows miners to earn more Bitcoins.
• It increases the mining difficulty significantly.

8. What is the term for the minimum price at which mining Bitcoin can be profitable?

• The `cap price.`
• The `break-even price.`
• The `floor price.`
• The `market price.`

9. What is the role of miners in the Bitcoin network?

• Miners verify transactions and generate new Bitcoins.
• Miners trade Bitcoin on exchanges.
• Miners manage Bitcoin investment funds.
• Miners create Bitcoin wallets for users.

10. How does the difficulty of cryptographic puzzles affect the supply of new Bitcoins?

• It determines the total number of Bitcoins available.
• It influences how quickly new Bitcoins are produced.
• It has no effect on Bitcoin`s price fluctuations.
• It impacts Bitcoin`s market trading fees.

11. What happens to the available supply of Bitcoins on exchanges when demand increases?

• The available supply on exchanges remains the same.
• The available supply on exchanges decreases.
• The available supply on exchanges increases.
• The available supply on exchanges fluctuates unpredictably.

12. What is the relationship between demand and the speed at which Bitcoin prices rise?

• The speed at which Bitcoin prices fall is entirely independent of demand.
• A fixed supply means prices cannot rise, no matter the demand.
• As more people buy Bitcoin, the available supply on exchanges decreases, impacting the speed at which prices rise.
• Increased supply leads to higher prices regardless of demand.

13. What is the economic principle that governs the market price and quantity of a specific commodity?

• The principle of opportunity cost.
• The concept of comparative advantage.
• The theory of marginal utility.
• The law of supply and demand.

14. How does a reduction in corn supply compare to the effect of a halving event on Bitcoin supply?

• Both lead to higher prices due to scarcity.
• Both cause a decrease in demand for other crops.
• Both result in increased production volume.
• Both have no significant impact on market prices.

15. What are the primary reasons for the fluctuating prices of Bitcoin?

• Supply, demand, media coverage, and regulatory changes.
• Government spending, international trade, weather patterns, and internet speed.
• User preferences, server uptime, miner locations, and transaction fees.
• Stock market trends, luxury brand sales, charity donations, and mining hardware sales.

16. How does the fixed supply of Bitcoin protect it from inflation?

• It ensures the value of Bitcoin decreases over time.
• It prevents the creation of new Bitcoins beyond the 21 million limit.
• It allows for unlimited creation of new Bitcoins.
• It increases the supply of new Bitcoins every year.

17. What is the effect of increased demand on the price of Bitcoin?

• The price increases.
• The price fluctuates randomly.
• The price decreases.
• The price remains the same.

18. What are the potential use cases of Bitcoin beyond financial transactions?

• Traditional banking services, loan applications, and home mortgages.
• Voting mechanisms, wills, trusts, future markets, crowdfunding, and decentralized domain names.
• Conducting in-person auctions, storing gold, and facilitating real estate transactions.
• Creating physical currencies, issuing government bonds, and national currency stabilization.

19. How can you purchase Bitcoin?

• You can only get Bitcoin by mining it yourself.
• You can acquire Bitcoin only through physical cash exchanges.
• You can purchase Bitcoin online using credit cards or e-wallets like PayPal.
• You can buy Bitcoin exclusively on the stock market.

20. How can you sell Bitcoin?

• You can sell Bitcoin exclusively by trading it for Ethereum.
• You can sell Bitcoin only via phone calls to brokers.
• You can sell Bitcoin only through local cryptocurrency shops.
• You can sell Bitcoin online to an exchange or other people, similar to purchasing it.

21. What type of products can you purchase with Bitcoins?

• Various products, but specific examples are not provided.
• Only digital art and collectibles.
• Just physical currency exchanges.
• Exclusively travel tickets for flights.

22. What is the role of the Bitcoin network in managing its supply?

• The network prohibits miners from creating new Bitcoins altogether.
• The network allows unlimited mining to increase supply freely.
• The network adjusts the difficulty of cryptographic puzzles to manage the supply of new Bitcoins.
• The network sets arbitrary prices to control Bitcoin`s supply.

23. How does the break-even point for miners affect the price of Bitcoin?

• It represents the minimum price at which mining Bitcoin can be profitable, known as the `floor price.`
• It dictates the maximum amount of Bitcoins that can be mined daily.
• It sets the price at which Bitcoin can be traded on exchanges.
• It determines the number of miners allowed to participate in the network.

24. What is the significance of the hard limit in the case of Bitcoin?

• It allows for unlimited supply to meet demand.
• It ensures Bitcoin can be mined indefinitely.
• It means that no more than 21 million Bitcoins will ever exist.
• It indicates the Bitcoin price will stabilize.

25. What is the effect of halving events on the rate at which new Bitcoins enter the market supply?

• It has no effect on the rate at which new Bitcoins enter the market supply.
• It slows down the rate at which new Bitcoins enter the market supply.
• It causes new Bitcoins to become instantly available in the market supply.
• It increases the rate at which new Bitcoins enter the market supply.

26. How does the scarcity of Bitcoin contribute to its value?

• It increases the value due to limited supply and growing demand.
• It decreases demand leading to lower prices.
• It makes Bitcoin worthless in the market.
• It has no effect on the value of Bitcoin.

27. What is the term for the reduction in mining rewards every four years?

• Halving
• Decreasing
• Shrinking
• Diminishing

28. How does the reduction in mining rewards affect mining profitability?

• It decreases the cost of mining operations.
• It increases mining output significantly.
• It guarantees higher profits for miners.
• It makes it harder for miners to cover their costs.

29. What is the relationship between the cost of production and the price of Bitcoin?

• The cost of production has no effect on Bitcoin`s price at all.
• The cost of production solely determines the market cap of Bitcoin.
• The cost of production directly regulates Bitcoin`s trading volume.
• The cost of production contributes to establishing a baseline price for miners.

30. How does the overall mining power influence the rate of Bitcoin creation?

• The mining power determines the Bitcoin exchange rate directly.
• Increased mining power reduces the number of Bitcoins created.
• A higher mining power results in more frequent halving events.
• The Bitcoin network adjusts the difficulty of its cryptographic puzzles in response to the overall mining power.