Bitcoin Peer-to-Peer Investments Quiz

1. Who is the founder of Bitcoin and is known under a pseudonym?

• Satoshi Nakamoto
• Charlie Lee
• Roger Ver
• Vitalik Buterin

2. What document outlines the foundational concepts of Bitcoin?

• The Blockchain Guide
• The Crypto Manual
• The Bitcoin Ledger
• The Bitcoin White Paper

3. Which exchange experienced a significant hack in 2014, leading to its collapse?

• Bitfinex
• Binance
• Mt. Gox
• Kraken

4. What is the maximum supply of Bitcoin that can exist?

• 21,000,000
• 30,000,000
• 18,000,000
• 25,000,000

5. What off-chain technology aims to reduce Bitcoin transaction fees and times?

• Lightning Network
• Sidechain Protocol
• Escrow Service
• Transaction Pool

6. Which statement about bitcoin wallets is false?

• Public wallets can be accessed without any private keys.
• A wallet allows you to store unlimited cryptocurrencies securely.
• To open a wallet you must submit a request to the wallet provider.
• A hot wallet provides complete anonymity for transactions.

7. What foundational technology powers Bitcoin?

• Cloud computing
• Blockchain
• Quantum computing
• Artificial intelligence

8. Can Bitcoin be sent to another blockchain`s address?

• Yes, Bitcoin can be sent to any blockchain`s address.
• No, Bitcoin cannot be sent to another blockchain`s address.
• Only Ethereum addresses can accept Bitcoin.
• Bitcoin can only be sent to Bitcoin addresses.

9. What event is celebrated on Bitcoin Pizza Day?

• The day when a computer programmer, Lazlo Hanyecz, paid 10,000 bitcoins for two pizzas in 2010.
• The day the first Bitcoin transaction between two users occurred.
• The day Bitcoin was created by Satoshi Nakamoto in 2009.
• The day Bitcoin reached its all-time high price in 2021.

10. What type of algorithm does Bitcoin use for hashing?

• MD5
• SHA-256
• AES
• RSA

11. What does a nonce do in Bitcoin mining?

• A tool for measuring mining efficiency.
• A variable for adjusting block sizes.
• A format for storing transaction data.
• A number used once in a cryptographic hash function.

12. What was the primary purpose of creating Bitcoin?

• A means to fund startups exclusively.
• A centralized banking system.
• A strictly peer-to-peer currency.
• A protocol for stock trading only.

13. How long does it typically take to mine a new Bitcoin block?

• 10 minutes
• 30 minutes
• 5 minutes
• 15 minutes

14. What rewards do nodes receive for maintaining the Bitcoin network?

• The steady addition of new coins and transaction fees.
• Fees for external wallet usage.
• Rewards based solely on network size.
• Only transaction fees from users.

15. What must an attacker do to change the blockchain if they gain more CPU power?

• The attacker must redo the proof-of-work.
• The attacker gains instant control over the network.
• The attacker can change the previous blocks.
• The attacker can erase all transaction history.

16. When did the first Bitcoin transaction take place?

• October 31, 2008
• December 25, 2010
• January 3, 2009
• March 1, 2011

17. What type of exchange allows users to trade Bitcoin directly without intermediaries?

• Centralized marketplace
• Traditional broker
• Peer-to-peer (P2P) exchange
• Hybrid platform

18. Why is a peer-to-peer network advantageous for Bitcoin transactions?

• Transactions are recorded on a blockchain network without the need for a trusted third party.
• It requires a bank to oversee all transactions.
• It guarantees instant transaction confirmations every time.
• It centralizes control to few entities for faster processing.

19. What prevents double-spending in Bitcoin transactions?

• By requiring a physical ID for every transaction.
• With a central authority overseeing all transactions.
• Using proof-of-work to timestamp transactions and form a record that cannot be changed without redoing the proof-of-work.
• Through a monthly verification process by users.

20. What function do digital signatures serve in Bitcoin?

• Digital signatures encrypt the blockchain data.
• Digital signatures act as public keys for wallets.
• Digital signatures provide strong control of ownership.
• Digital signatures serve as transaction speed enhancers.

21. Which encryption algorithm does Bitcoin utilize for securing transactions?

• SHA-256 hashing algorithm
• DES block cipher
• RSA encryption standard
• AES symmetric algorithm

22. How does the blockchain guarantee the immutability of blocks?

• By using a centralized database to manage transactions.
• By storing all data on a single server.
• By requiring a government authority to validate changes.
• By hashing each block and linking it to the previous block.

23. What is a key distinction between P2P exchanges and centralized exchanges?

• Both types of exchanges require a third-party verification process.
• P2P exchanges are monitored by a central authority.
• Centralized exchanges allow users to trade directly with one another.
• Peer-to-peer exchanges do not require intermediaries, while centralized exchanges do.

24. How can users achieve anonymity in their cryptocurrency transactions?

• By using a peer-to-peer transaction directly from one wallet to another without the services of an intermediary.
• By using a credit card linked to a cryptocurrency account.
• By sharing personal information on social media accounts to gain trust.
• By employing a centralized exchange as an intermediary for transactions.

25. Why is the Lightning Network considered important for Bitcoin?

• It is an off-chain scaling solution to mitigate fees and long transaction times.
• It serves as a backup for lost Bitcoins.
• It centralizes the transaction process for faster confirmations.
• It increases block size to accommodate more transactions.

26. What function does an escrow wallet provide in P2P trades?

• To ensure assets are exchanged without interference and protect users from potential theft.
• To manage market liquidity for better trading.
• To facilitate direct communication between buyers and sellers.
• To store users` data securely during trades.

27. How does Bitcoin`s decentralization attract traders?

• It allows trades exclusively during business hours only.
• It requires extensive identification checks making it secure.
• It offers full control over transactions and typically lower fees.
• It increases transaction speeds by using centralized servers.

28. What advantage does blockchain technology provide in P2P transactions?

• It provides a secure and transparent ledger that records all transactions.
• It slows down transaction processing times significantly.
• It eliminates the need for any digital record-keeping.
• It requires a trusted third party to verify transactions.

29. How does proof-of-work enhance the security of the Bitcoin network?

• It allows transactions to be processed instantly without confirmation.
• It enables unlimited transaction amounts at zero cost.
• It requires miners to provide personal information for network access.
• It makes it computationally impractical for an attacker to change the blockchain if honest nodes control a majority of CPU power.

30. What role do transaction fees play in the Bitcoin ecosystem?

• They are a penalty for slow transaction processing.
• They serve as an incentive for miners to validate transactions and add them to the blockchain.
• They increase the amount of bitcoin created.
• They limit user access to the Bitcoin network.