Bitcoin Peer-to-Peer Network Quiz

1. What is the primary characteristic of Bitcoin`s peer-to-peer network?

• The primary characteristic is that nodes are structured in a hierarchical manner with administrators controlling access.
• The primary characteristic is that all nodes are peers to each other, meaning there are no administrative computers or terminals with greater access.
• The primary characteristic is that transactions require approval from a central authority before being validated.
• The primary characteristic is that a single server processes all transactions to ensure speed.

2. How does Bitcoin`s peer-to-peer network operate?

• Bitcoin`s peer-to-peer network operates on a decentralized architecture where each participant (or node) has equal privileges and can initiate or complete transactions directly with each other.
• Bitcoin`s peer-to-peer network relies on a central server to process all transactions and maintain the ledger.
• Bitcoin`s peer-to-peer network functions through a hierarchy with specialized nodes having more power than others.
• Bitcoin`s peer-to-peer network is strictly governed by a specific group of miners who validate all transactions.

3. What is the role of nodes in Bitcoin`s peer-to-peer network?

• Nodes only serve as users who send and receive Bitcoin without any other function.
• Nodes are responsible for creating Bitcoin and controlling its supply.
• Nodes in the network are solely focused on trading Bitcoin without any operational tasks.
• Nodes in Bitcoin`s peer-to-peer network store a copy of the blockchain, validate transactions, and contribute to decentralization.

4. What is the significance of the blockchain in Bitcoin`s peer-to-peer network?

• The blockchain serves as a private database for individual users` transaction records.
• The blockchain functions solely as a platform for trading Bitcoin assets.
• The blockchain is a public ledger of all Bitcoin transactions that is maintained and verified by nodes in the network.
• The blockchain acts as a regulatory tool for banks to monitor Bitcoin transactions.

5. How are transactions validated in Bitcoin`s peer-to-peer network?

• Transactions are validated by a central bank.
• Transactions are validated by random selection among users.
• Transactions are validated by sending them to a government authority.
• Transactions are validated by nodes through a process called mining.

6. What is the benefit of a decentralized network like Bitcoin`s peer-to-peer system?

• It allows only registered users to send or receive transactions.
• The decentralized network reduces costs, increases transaction speed, and enhances the system`s resilience and security by eliminating the need for intermediaries.
• It requires a subscription fee for network access.
• It relies on a central bank to manage transactions effectively.

7. How many listening nodes typically run the Bitcoin Core client?

• Around 5,000
• Approximately 2,000
• Between 7,000 and 10,000
• More than 12,000

8. What is the extended Bitcoin network?

• The extended Bitcoin network includes the core Bitcoin P2P protocol and any other specialized nodes that might run ancillary or focused protocols.
• The extended Bitcoin network is limited to only authorized users and has strict access controls.
• The extended Bitcoin network is entirely disconnected from the main Bitcoin blockchain and operates independently.
• The extended Bitcoin network solely relies on a centralized server to operate all transactions.

9. What types of nodes compete in the mining process?

• Gateway nodes
• Storage nodes
• Mining nodes
• User nodes

10. How does the absence of a central authority in Bitcoin’s P2P network affect the currency?

• The absence of a central authority makes the currency highly volatile and unpredictable in value.
• The absence of a central authority means all transactions are anonymous and cannot be traced.
• The absence of a central authority ensures that no single entity can control or manipulate the currency, preserving its integrity and transparency.
• The absence of a central authority allows for unlimited printing of currency, leading to inflation.

11. What is the structure of Bitcoin’s peer-to-peer network?

• The structure is a flat network with a mesh topology where any node can talk to any other node.
• The structure is a hierarchical network where nodes are arranged in a tree format.
• The structure is a centralized network where all nodes connect to a single server.
• The structure is a ring network where nodes connect in a closed loop.

12. What is the role of miners in Bitcoin’s peer-to-peer network?

• Miners facilitate communication between users by managing the network traffic of transaction data.
• Miners control the price of Bitcoin by influencing the mining difficulty levels and transaction volume.
• Miners solve complex cryptographic puzzles to add transactions to the blockchain, ensuring their authenticity and preventing double-spending.
• Miners act as brokers who process transactions and charge fees for their services.

13. How does a wallet create and propagate a new transaction?

• The wallet creates a new block and broadcasts it to the entire network immediately.
• The wallet tells all the nodes it is connected to about the transactions, who then tell all the nodes they are connected to.
• The wallet stores transactions locally and submits them periodically to the network.
• The wallet encrypts the transaction and sends it directly to a central server.

14. What is a UTXO (Unspent Transaction Output)?

• A UTXO is a confirmation that a transaction has been completed successfully.
• A UTXO is a type of wallet used for storing cryptocurrencies.
• A UTXO is a protocol for securing transaction data on the blockchain.
• A UTXO is an output of a transaction that can be spent as an input in a new transaction.

15. What type of Bitcoin address is created by performing hash functions on a public key?

• P2PKH (Pay-to-Public-Key-Hash) address.
• P2WPKH (Pay-to-Witness-Public-Key-Hash) address.
• P2WPKSH (Pay-to-Witness-Public-Key-Script-Hash) address.
• P2SH (Pay-to-Script-Hash) address.

16. What checks are run when validating a transaction?

• Inputs are unspent and signatures are valid.
• Outputs are corrupted and timestamps are wrong.
• Balances are always zero and all fees are waived.
• Transactions are delayed and no checks are performed.

17. What is the difference between a hard fork and a soft fork?

• A hard fork only changes the transaction fees on the network.
• A hard fork alters the protocol, making previously valid transactions invalid.
• A hard fork requires constant internet access for all nodes.
• A hard fork is a type of mining process used to create new coins.

18. Why do miners not control the Bitcoin ecosystem?

• Miners implement consensus rules and create blocks.
• Miners have exclusive access to wallet services.
• Miners set the value of Bitcoin in the market.
• Miners control the transaction fees and exchanges.

19. What does it mean for a blockchain to be “neutral”?

• The blockchain requires all participants to be verified before processing transactions.
• The blockchain will process any valid transaction regardless of sender, receiver, or content.
• The blockchain operates only with pre-approved entities participating in it.
• The blockchain allows only specific types of transactions based on user credentials.

20. In what encoding format does the Bitcoin daemon often display transaction data?

• UTF-8
• Hex
• Base64
• ASCII

21. What are two types of Bitcoin transactions?

• ICO and Token.
• P2PKH and P2SH.
• USD and GBP.
• BTC and ETH.

22. Why is it inherently difficult to update the Bitcoin consensus rules?

• Users can request changes instantly through a designated committee.
• The network can change rules at any time with a majority vote.
• Miners choose updates and all nodes must accept them immediately.
• There is no centralized decision-maker and most participants need to support changes.

23. How is conflicting data on the network resolved?

• Nodes vote to decide which data to accept on the network.
• When miners have conflicting data, the “winning” miner’s version of history becomes the truth on the network.
• Data conflicts are resolved by randomly selecting a version of the transaction.
• Conflicting data is ignored until a central authority intervenes.

24. What is the term for a peer-to-peer network where all nodes are peers to each other?

• Hybrid network
• Client-server network
• Peer-to-peer (P2P) network
• Centralized network

25. How does the Bitcoin network maintain a balance of power such that no one interest group can control the network?

• Only miners have the power to propose changes to the network’s rules.
• Wallet manufacturers decide the network`s protocol and its governance.
• Developers, miners, wallets, merchants, and exchanges all hold influence, and no one entity can dictate a change to Bitcoin.
• A centralized authority oversees all network transactions to maintain control.

26. What does it mean for a blockchain network to be permission-less?

• The network is restricted to government-approved entities only.
• Only selected users can access the network for transactions.
• Anyone can join the network and transactions can be created or sent without an intermediary.
• Users need special permissions to participate in the network.

27. What is the primary goal of Bitcoin’s decentralized architecture?

• Ensure all transactions go through government regulations.
• Eliminate the need for intermediaries like banks.
• Create a centralized authority for transactions.
• Increase transaction fees for all users.

28. How does the absence of intermediaries in Bitcoin’s P2P network affect transaction fees?

• The absence of intermediaries reduces transaction fees.
• The absence of intermediaries has no impact on transaction fees.
• The absence of intermediaries eliminates transaction fees entirely.
• The absence of intermediaries increases transaction fees.

29. What are the benefits of a decentralized network like Bitcoin’s P2P system?

• The main advantage is a central control over transactions.
• The only benefit is the ability to mine Bitcoin.
• The system is designed to eliminate user anonymity completely.
• The benefits include reduced costs, increased transaction speed, enhanced resilience, and improved security.

30. What is the structure of a peer-to-peer network?

• A star topology with a main hub.
• A hierarchical structure with a central server.
• A linear structure with nodes connected in a single line.
• A flat structure where any node can talk to any other node.