Bitcoin Privacy Features Quiz

1. What primary cryptographic method does Zcash utilize to ensure transaction privacy?

• Public key infrastructure
• Secure hashing
• Asymmetric encryption
• Zero-knowledge proofs

2. In Zcash, what is the term for transactions that do not reveal sender or receiver details on the public blockchain?

• Transparent Zcash
• Shielded Zcash
• Regular Zcash
• Public Zcash

3. What techniques do privacy coins use to obscure user identities and transaction details?

• By incorporating advanced cryptographic protocols such as coin mixing and utilizing cryptographic algorithms that enable the unlinking of transaction inputs and outputs.
• By using a single, fixed address for all transactions to enhance identification.
• By limiting users to transactions only within a specific geographic location.
• By requiring users to create a public profile linked to their transactions for transparency.

4. What is the function of stealth addresses in privacy-focused cryptocurrencies?

• To embed transaction fees directly within the token to streamline payments.
• To create a multi-signature wallet for added security and transparency.
• To allow for real-time transaction tracking on the public ledger.
• To generate a unique, one-time address for the receiver derived from the recipient`s public key.

5. How do ring signatures contribute to the anonymity of Bitcoin transactions?

• It enables the sender to mix their transaction with several others, making it nearly impossible to determine which participant initiated the transaction.
• It requires all parties to verify the transaction identity before proceeding, thus enhancing transparency.
• It uses a centralized system of transaction logging, ensuring that all actions are recorded and associated with user identities.
• It limits transaction sizes to reduce exposure, making the sender`s actions less visible.

6. What advantage do zero-knowledge proofs provide in the context of privacy coins?

• It prevents the sending of any funds between users entirely.
• It allows the verification of a transaction`s validity without revealing any sensitive information.
• It ensures all transaction data is stored permanently on the main blockchain.
• It provides a way to make transactions more expensive for everyone involved.

7. How does Bitcoin Core maintain privacy for transactions received by users?

• By downloading all 230 million transactions on the Bitcoin blockchain and processing them to find which transactions pay you, providing perfect receiving privacy.
• By using encryption to hide the transaction amounts from public view.
• By storing transactions on a private server that only certain users can access.
• By limiting the number of transactions a user can receive in a given time frame.

8. What important privacy distinction exists between Bitcoin Core and lightweight wallet clients?

• Bitcoin Core relays transactions for all peers, confusing anti-privacy organizations.
• Lightweight wallets store all blockchain data locally and maintain user anonymity.
• Lightweight clients track all transactions on the network to protect user identities.
• Bitcoin Core uses ring signatures to ensure transaction privacy for all users.

9. In what way does Tor enhance privacy for Bitcoin users?

• It helps disassociate your online activity from your IP address, significantly increasing your ability to confound anti-privacy organizations.
• It relies on encrypted wallets for secure transactions.
• It stores users` transaction data on remote servers for safety.
• It uses strong passwords to protect user identities.

10. How does Samourai Wallet protect user anonymity during Bitcoin transactions?

• It employs a different address every time you interact with Bitcoin, uses Tor and VPN support, and operates by scanning a public payment code to establish a payment channel between two wallets.
• It allows users to make transactions without an internet connection.
• It requires personal identification before any transaction is processed.
• It stores user data on a centralized server for easier access.

11. What is CoinJoin`s role in enhancing transaction privacy in cryptocurrency wallets?

• To mix multiple transactions together, making it difficult to trace individual coins.
• To validate the amount of digital currency being transferred.
• To reduce transaction fees across the network.
• To encrypt the transaction details for better security.

12. Why is using a non-custodial wallet significant for maintaining user privacy?

• It only allows transactions between known parties, limiting interaction.
• It requires multiple confirmations for every transaction, reducing speed.
• It stores the cryptocurrency on a centralized server, increasing risk.
• It ensures that no third party can freeze or seize a user’s money, giving users complete control over their cryptocurrency.

13. How does Wasabi Wallet offer enhanced privacy for its users?

• It has a built-in Tor connection and uses CoinJoin.
• It shares transaction information on a public ledger.
• It requires users to provide their real names and addresses.
• It tracks every transaction made by users for security.

14. What impact does using different addresses in transactions have on Bitcoin user anonymity?

• It makes your transactions visible to everyone.
• It allows others to track your transactions easily.
• It prevents anyone from identifying you, your transactional amounts, and the number of Bitcoins you hold.
• It connects all your transactions to a single address.

15. How does the UTXO model in Bitcoin influence user privacy concerns?

• It prevents all transactions from being tracked by external organizations.
• It allows users to create disposable addresses that cannot be traced back to them.
• It increases user privacy by ensuring all transactions are kept secret from public view.
• It can lead to privacy problems because every transaction must be available for all to see, forever, and change address detection can link ownership of inputs with new outputs.

16. What is the common-input-ownership heuristic and how does it endanger anonymity?

• It securely encrypts all transaction information, preserving anonymity.
• It ensures that all transactions are completely hidden from public view.
• It allows an adversary to cluster addresses, endangering user privacy.
• It prevents any association between sender and recipient addresses.

17. Why are bloom filters considered a privacy risk for lightweight wallets?

• They only store public keys without any personal information.
• They can reveal who you paid, who paid you, and what your current Bitcoin balance is, incurring serious privacy leakage.
• They ensure all transactions are secure and untraceable to any person.
• They encrypt all user data, making it private and anonymous.

18. How does Bitcoin Core`s transaction relay feature assist in confusing tracking agencies?

• It confuses anti-privacy organizations by relaying thousands of separate transactions a day.
• It prevents users from receiving any transactions at all.
• It only relays transactions made in one hour.
• It requires users to use encrypted email for every transaction.

19. What advantage do Tor hidden services offer for Bitcoin privacy?

• It anonymizes all Bitcoin transactions by default.
• It creates untraceable Bitcoin wallets for users.
• It allows mobile clients to connect securely to nodes.
• It encrypts Bitcoin transactions entirely in the network.

20. In what manner does Samourai Wallet`s protocol facilitate anonymous transactions?

• It stores all user transactions on a public ledger for transparency.
• It limits transactions to small amounts to maintain secrecy.
• It requires users to register with personal information to use the service.
• It operates by scanning a public payment code to establish a payment channel.

21. How does a VPN contribute to increasing privacy in Bitcoin transactions?

• It stores Bitcoin in a decentralized manner away from public view.
• It allows users to use an anonymous IP address that is not associated with them or their location, enhancing anonymity.
• It automatically mixes transactions among users in the network.
• It encrypts all Bitcoin transactions directly on the blockchain.

22. What negative effect does Bitcoin’s public ledger have on user identity concealment?

• It obscures user identities through ring signatures.
• It creates a permanent record of all transactions.
• It allows users to anonymize their IP addresses.
• It enhances user privacy through encryption.

23. What benefits arise from frequently changing addresses in Bitcoin transactions?

• It makes it more difficult to track transaction history.
• It speeds up the transaction confirmation time.
• It reduces transaction fees significantly.
• It allows for unlimited transaction amounts.

24. How does Bitcoin Core`s processing method enhance privacy for received transactions?

• By downloading all 230 million transactions and processing them for receiving privacy.
• By limiting transactions to a single peer for security.
• By obscuring sender addresses only in private transactions.
• By encrypting each transaction with a unique code.

25. What is the privacy challenge posed by third-party services in Bitcoin transactions?

• Third-party services can monitor user activity.
• Third-party services use randomized addresses.
• Third-party services ensure complete anonymity.
• Third-party services increase blockchain visibility.

26. How does the UTXO model fundamentally affect privacy dynamics in Bitcoin?

• It creates a completely anonymous network where transactions cannot be traced at all.
• It enhances privacy by ensuring that all transactions are private and hidden from public view.
• It protects user identities by automatically mixing transactions with unrelated ones.
• It can lead to privacy problems because every transaction must be available for all to see, forever, and change address detection can link ownership of inputs with new outputs.

27. Why are non-custodial wallets crucial for transaction security and privacy?

• It guarantees that transactions are processed faster than custodial wallets.
• It allows users to trade cryptocurrencies anonymously, without any restrictions.
• It eliminates the need for a backup because all funds are secure on the blockchain.
• It ensures that no third party can freeze or seize a user’s money, giving users complete control over their cryptocurrency.

28. How does the Tor integration in Wasabi Wallet bolster user privacy?

• It employs a centralized server for mixing coins.
• It uses blind signatures for transactions.
• It requires personal identification to access features.
• It has a built-in Tor connection.

29. What results from utilizing CoinJoin in transactions within Wasabi Wallet?

• It allows tracking of each coin`s movement across wallets.
• It mixes multiple transactions together, making it difficult to trace individual coins.
• It combines user balances into a single account for easier management.
• It reveals all transaction details publicly, enhancing transparency.

30. In what way does Samourai Wallet`s unique address generation safeguard personal anonymity?

• It requires personal identification for every address.
• It generates a unique address for each transaction.
• It uses a single static address for all transactions.
• It shares addresses publicly to enhance visibility.