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How to understand cryptocurrency - Test
Contributed by: Black
  • 1. What is cryptocurrency?
A) A government-issued currency.
B) A digital or virtual currency secured by cryptography.
C) A physical coin made of precious metals.
D) A type of stock market investment.
  • 2. What is blockchain technology?
A) A type of computer virus.
B) A centralized database controlled by one entity.
C) A form of cloud storage.
D) A distributed, decentralized, public ledger.
  • 3. What is mining in the context of cryptocurrency?
A) Manufacturing cryptocurrency tokens.
B) Verifying and adding new transactions to the blockchain.
C) Selling cryptocurrency on an exchange.
D) Digging for physical coins in the ground.
  • 4. What is a cryptocurrency wallet?
A) A physical wallet for holding cash.
B) A stock brokerage account.
C) A software or hardware device used to store private keys.
D) A bank account for cryptocurrency.
  • 5. What is a private key?
A) A secret code that allows you to access and control your cryptocurrency.
B) A password for your cryptocurrency exchange account.
C) The public address where you receive cryptocurrency.
D) The name of your cryptocurrency wallet.
  • 6. What is a public key?
A) The owner's social security number.
B) A personal identification number.
C) An address used to receive cryptocurrency.
D) A secret code to spend cryptocurrency.
  • 7. What is the purpose of cryptography in cryptocurrency?
A) To regulate the price of the currency.
B) To make the currency difficult to understand.
C) To make the currency look aesthetically pleasing.
D) To secure transactions and control the creation of new units.
  • 8. What is decentralization?
A) Regulation by a government agency.
B) Centralized control by a single entity.
C) Distribution of control and decision-making away from a central authority.
D) Control by a stock exchange.
  • 9. What is Bitcoin?
A) A government-backed digital currency.
B) A company that sells cryptocurrency wallets.
C) A type of banking institution.
D) The first decentralized cryptocurrency.
  • 10. What is Ethereum?
A) A blockchain platform with smart contract functionality.
B) A competitor to Bitcoin mining hardware.
C) A financial institution.
D) A type of hardware wallet.
  • 11. What are smart contracts?
A) Self-executing contracts with the terms directly written into code.
B) Physical contracts written on paper.
C) Verbal agreements between parties.
D) Contracts that require lawyers to execute.
  • 12. What is a stablecoin?
A) A government-issued digital currency.
B) A type of stock option.
C) A cryptocurrency with a highly volatile price.
D) A cryptocurrency designed to maintain a stable value.
  • 13. What is volatility in the context of cryptocurrency?
A) The degree of price fluctuation over time.
B) The number of transactions processed per second.
C) The stability of the price over time.
D) The amount of electricity used for mining.
  • 14. What is a cryptocurrency exchange?
A) A place to store physical cryptocurrency coins.
B) A place where you can mine cryptocurrencies.
C) A platform where you can buy, sell, and trade cryptocurrencies.
D) A government agency that regulates cryptocurrencies.
  • 15. What is DeFi?
A) Distributed Federal Investments.
B) Department of Financial Institutions.
C) Decentralized Finance.
D) Deflationary Economics.
  • 16. What are NFTs?
A) Negotiable Future Transactions.
B) Non-Fungible Tokens.
C) National Finance Transfers.
D) New Financial Technologies.
  • 17. What is a hard fork?
A) A radical change to the protocol of a blockchain.
B) A type of cryptocurrency exchange.
C) A minor update to a cryptocurrency wallet.
D) A tax on cryptocurrency transactions.
  • 18. What is a soft fork?
A) A type of cryptocurrency wallet.
B) A radical change to the protocol of a blockchain.
C) The process of mining new cryptocurrency.
D) A backward-compatible change to the protocol of a blockchain.
  • 19. What is gas in the context of Ethereum?
A) A unit of energy used for mining.
B) A type of cryptocurrency.
C) A fee required to execute transactions or smart contracts.
D) A reward given to miners.
  • 20. What is scalability?
A) The ability of a blockchain to handle a large number of transactions.
B) The privacy of transactions on a blockchain.
C) The security of a cryptocurrency wallet.
D) The price stability of a cryptocurrency.
  • 21. What is proof-of-work (PoW)?
A) A way to steal cryptocurrency.
B) A consensus mechanism where miners solve complex computational problems.
C) A type of cryptocurrency wallet.
D) A system where users vote on new transactions.
  • 22. What is proof-of-stake (PoS)?
A) A consensus mechanism where validators stake their cryptocurrency to validate transactions.
B) A way to print new cryptocurrency.
C) A system where miners solve complex computational problems.
D) A type of hardware wallet.
  • 23. What is a 51% attack?
A) When a cryptocurrency loses 51% of its value.
B) When a hacker steals 51% of the cryptocurrency on an exchange.
C) When a single entity controls more than 50% of the network's mining power.
D) When a government bans cryptocurrency in 51 countries.
  • 24. What is a double-spending problem?
A) The risk that cryptocurrency can be spent more than once.
B) The risk of losing your private key.
C) The risk of a hard fork.
D) The risk of government regulation.
  • 25. What is a mempool?
A) A government agency.
B) A waiting area for transactions before they are confirmed on the blockchain.
C) A type of cryptocurrency wallet.
D) A mining pool.
  • 26. What is layer 2 scaling solution?
A) Upgrading the hardware of mining computers.
B) Rewriting the blockchain's original code.
C) Protocols built on top of a blockchain to improve transaction speed and scalability.
D) Storing cryptocurrency in a physical vault.
  • 27. What is a DAO?
A) Distributed Automated Output.
B) Digital Accounting Office.
C) Department of Advanced Operations.
D) Decentralized Autonomous Organization.
  • 28. What does 'hodl' mean in the cryptocurrency community?
A) To hold onto your cryptocurrency for the long term.
B) To sell all your cryptocurrency.
C) To mine cryptocurrency.
D) To actively trade cryptocurrency.
  • 29. What is KYC in cryptocurrency?
A) Key Yielding Cryptocurrency.
B) Known Yearly Commissions.
C) Keep Your Coins.
D) Know Your Customer, a process of verifying users' identities.
  • 30. What is the purpose of a block explorer?
A) To create new cryptocurrencies.
B) To view transactions and other information on a blockchain.
C) To store cryptocurrency.
D) To mine cryptocurrency.
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