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