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Bitcoin 101 Cognitive Class Exam Quiz Answers

Bitcoin 101 Cognitive Class Certification Answers

Question 1: Which of the following statements is NOT true?

  • The total number of bitcoin in circulation is automatically increased without miners.
  • Miners are rewarded in a predetermined amount of bitcoin for verifying new blocks of transactions.
  • Miners run a full-node which propogates new blocks to the bitcoin network.
  • Miners are a collection of transactions waiting to be verified and confirmed.

Question 2: The transaction process is controlled by asymmetric cryptography, where a public key identifies the wallet and a corresponding private key allows sending balances to another wallet.

  • False
  • True 

Question 3: Which of the following statements are true?

  • Your private key is your representation on the bitcoin network.
  • Whoever owns the private key owns the bitcoin.
  • Web Wallet stores your private key on an internet server.
  • Cold storage are devices connected to the internet.

Question 1: What is the Byzantine Generals Problem?

  • Two commanders must coordinate messages between 3 or more lieutenants in a timely and trustworthy manner.
  • One commander must coordinate messages between 3 or more lieutenants in a timely and trustworthy manner.
  • Two commanders must coordinate messages between 2 or more lieutenants in a timely and trustworthy manner.
  • One commander must coordinate messages between 2 or more lieutenants in a timely and trustworthy manner. 

Question 2: Bitcoin network is a first of its kind decentralized autonomous corporations.

  • False
  • True 

Question 3: Which of the following statements are true?

  • Blockchain allows users to create “smart property” by representing real world assets with bitcoin.
  • The Open Assets Protocol is built on top of Bitcoin Blockchain.
  • The Open Assets Protocol allows issuance and transfer of user-created assets.
  • ADEPT stands for the Autonomous, Decentralized, Peer-to-Peer Telemetry.

Question 1: Which of the following statements is NOT true?

  • Blockchain allows us to verify all information.
  • Bitcoin does not allow us to send money anonymously.
  • Bitcoin allows us to send as much or as little as we like.
  • Bitcoin allows us to send money anywhere, anytime, to anyone.

Question 2: Bitcoin’s money supply becomes less inflationary over time.

  • False
  • True 

Question 3: Bitcoin reflects many investment characteristics similar to gold, such as:

  • Scarce
  • Quasi-indestructable
  • Portable
  • Divisible

Question 1: Which of the following statements about Bitcoin is NOT true?

  • Bitcoin transaction fee can be represented as taxation.
  • The higher the transaction fee, the sooner it gets verified by miners.
  • There is no tax on Bitcoin transactions.
  • The transaction fee is voluntary.

Question 2: New blocks of bitcoin will be mined every 5 minutes on average based on a regulatory algorithm.

  • False
  • True

Question 3: Which of the following statements is true?

  • Taxation of cryptocurrencies will come from nation states.
  • Bitcoin transactions are all anonymous.
  • The blockchain cannot be used to identify criminal activity.
  • Bitcoin blockchain can be used to store any digital information. 

Question 1: How might bitcoin disrupt traditional forms of government?

  • Form of money which recognizes no geopolitical boundaries or taxation methods
  • Enables near-instant, global transactions
  • Limited in the supply of money
  • Cannot ‘print’ new bitcoin
  • Is used on the black market

Question 2: In what year did the bitcoin network first come online?

  • 2007
  • 2008
  • 2009
  • 2010
  • 2011

Question 3: In which year can we expect all bitcoin to have been mined?

  • 2040
  • 2080
  • 2114
  • 2140
  • 2041

Question 4: What are the computers which verify new blocks of bitcoin transactions known as?

  • Printers
  • Miners
  • Hashcash
  • Verifyers
  • Partial Nodes

Question 5: What do bitcoin sidechains mainly promise to introduce?

  • Applications which can integrate with the main bitcoin system and absorb network security
  • A form of currency which can be redeemed for real money
  • Standalone blockchain networks
  • Lower transaction verification times
  • Bitcoin automated tipping

Question 6: What do you need to share in order to receive bitcoin payments?

  • Private Key
  • Public Key
  • IP Address
  • Block Identification
  • Both Public and Private Key

Question 7: What does bitcoin introduce on an economic level?

  • Digital scarcity
  • Unlimited purchasing power
  • Decrease in the velocity of money
  • Duplicatable money supply
  • Something way too complicated for our grandma’s to understand

Question 8: What is the cryptographic ledger which verifies transactions known as?

  • Bitledger
  • Blockstream
  • Blocknet
  • Blockchain
  • SkyNet

Question 9: What is the limit on the number of bitcoin which can ever be in circulation?

  • 2.1 Million
  • 2.1 Billion
  • 210 Thousand
  • 21 Million
  • 42 Million

Question 10: Which 3 characteristics resemble bitcoin most closely?

  • digital, decentralized, antifragile
  • virtual, exchangeable, duplicatable
  • divisible, virtual, commoditized
  • distributed, autonomous, infinite
  • divisible, tangible, valuable

Question 11: Which cryptographic function does bitcoin use to create a chain of verified transactions?

  • Proof-of-stake
  • Proof-of-reserve
  • Proof-of-work
  • Proof-of-existance
  • Proof-of-power

Question 12: Which cryptographic hash function does bitcoin utilize?

  • SHA-384
  • SHA-1
  • SHA-3
  • SHA-512
  • SHA-256 

Question 13: Which most closely represents the tax structure of bitcoin?

  • Untaxable money supply
  • Pay capital gains/losses when exchanging into another cryptocurreny
  • Voluntary, pay-for-performance transaction fees
  • Progressive taxation (pay more for moving larger quantities)
  • Fixed taxation rate (pay an identical fee on every transaction)

Question 14: Which of the following best describe the technology of bitcoin?

  • A digital economy
  • An internet protocol for the transfer of money
  • Digital gold
  • An electronic cash system
  • All of the above 

Question 15: Which of the following best describes the nature of bitcoin’s money supply?

  • Inflationary
  • Deflationary
  • Disinflationary
  • All of the above
  • None of the above

Question 16: Which of the following computational problems is bitcoin thought to have solved? (2  answers)

  • Numerical Folding Problem
  • Byzantine Generals Problem
  • Double-Spending Problem
  • Double-Entry Accounting Problem
  • Fermi Paradox

Question 17: Which of the following is the best method to get your bitcoin hacked?

  • Paper Wallet
  • Hardware Wallet
  • Cold Storage
  • Hot Storage
  • Multi-signature account

Question 18: Which of the following represents your ability to sign bitcoin transactions?

  • Public Key
  • Blockstream
  • Block Identification
  • Private Key
  • Block Key

Question 19: Who invented bitcoin?

  • NSA among other intelligence agencies
  • Team of scientists working at CERN
  • Satoshi Nakamoto
  • Team of scientists working at DARPA
  • World Wide Web Consortium (W3)

Introduction to Bitcoin 101

Bitcoin is a digital or virtual currency that operates on a decentralized peer-to-peer network known as the blockchain. Here’s a breakdown of Bitcoin:

  1. Decentralization: Unlike traditional currencies, Bitcoin is not controlled by any central authority like a government or financial institution. Instead, it relies on a decentralized network of computers (nodes) to validate and record transactions.
  2. Blockchain: Bitcoin transactions are recorded on a public ledger called the blockchain. This ledger is distributed across the network and is maintained by the nodes. Each block in the chain contains a set of transactions, and once added, it becomes a permanent part of the blockchain.
  3. Cryptographic Security: Bitcoin transactions are secured using cryptographic techniques. Each user has a public address (similar to a bank account number) and a private key (like a password). The private key is used to sign transactions, proving ownership, while the public address is used to receive funds.
  4. Limited Supply: There will only ever be 21 million bitcoins in existence. This scarcity is programmed into the system and is designed to mimic the scarcity of precious metals like gold. The limited supply is expected to increase the value of Bitcoin over time, assuming demand continues to rise.
  5. Mining: New bitcoins are created through a process called mining. Miners use powerful computers to solve complex mathematical puzzles that validate and secure transactions. In return for their efforts, miners are rewarded with newly created bitcoins and transaction fees.
  6. Pseudonymity: While Bitcoin transactions are recorded on the blockchain and are publicly viewable, the identities of the parties involved are pseudonymous. Instead of using real names, transactions are identified by alphanumeric addresses. However, it’s important to note that transactions can still be traced through careful analysis of the blockchain.
  7. Volatility: The price of Bitcoin can be highly volatile, with values fluctuating dramatically over short periods. Factors such as market demand, regulatory news, and technological developments can all influence the price.
  8. Wallets: To store and manage bitcoins, users use digital wallets. These wallets can be software-based (desktop, mobile, or web) or hardware-based (physical devices). They allow users to send, receive, and manage their bitcoin holdings securely.

Bitcoin has gained popularity as both a digital currency and a store of value, attracting investors, traders, and individuals seeking an alternative to traditional financial systems. However, it’s essential to understand the risks involved, including regulatory uncertainty, security concerns, and market volatility, before getting involved in Bitcoin or any other cryptocurrency.

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