Cryptocurrencies: Fundamentals and Applications

Question 1

Which of the following is a key characteristic of cryptocurrencies?

Accepted Answer

Decentralization

Answer

Centralized authority

Answer

Government support

Question 2

What is the underlying technology that forms the foundation of most cryptocurrencies?

Accepted Answer

Blockchain

Answer

Peer-to-peer network

Answer

Hashing algorithm

Answer

Distributed ledger

Question 3

Which cryptocurrency is widely recognized as the first and most established?

Accepted Answer

Bitcoin

Answer

Ripple

Answer

Ethereum

Answer

Litecoin

Question 4

What is the process of validating and adding new transactions to the blockchain network called?

Accepted Answer

Mining

Answer

Validating

Answer

Staking

Answer

Forging

Question 5

Which of the following is a potential advantage of using cryptocurrencies?

Accepted Answer

Lower transaction fees

Answer

Price volatility subject to manipulation

Answer

Limited accessibility and acceptance

Answer

Increased government regulation

Question 6

What is the primary purpose of a cryptocurrency wallet?

Accepted Answer

Storing and managing cryptocurrency funds

Answer

Mining new cryptocurrencies

Answer

Exchanging fiat currencies

Answer

Tracking cryptocurrency transactions

Question 7

Besides being a cryptocurrency, what is another notable application of Ethereum?

Accepted Answer

Smart contract platform

Answer

File storage

Answer

Online gaming

Answer

Social media platform

Question 8

What is the term for the public and shared record of all cryptocurrency transactions?

Accepted Answer

Blockchain ledger

Answer

Digital wallet

Answer

Transaction history

Answer

Market data

Question 9

Which attribute is NOT inherent to cryptocurrencies?

Accepted Answer

Central authority backing

Answer

Decentralization

Answer

Immutability

Answer

Robust security

Question 10

Identify the first decentralized cryptocurrency to emerge.

Accepted Answer

Bitcoin

Answer

Litecoin

Answer

Ethereum

Answer

Dogecoin

Question 11

Which consensus mechanism is employed by Bitcoin to validate transactions?

Accepted Answer

Proof of Work

Answer

Delegated Proof of Stake

Answer

Proof of Stake

Answer

Byzantine Fault Tolerance

Question 12

What is the primary purpose of a cryptocurrency wallet?

Accepted Answer

Securely store private keys and facilitate transaction management of cryptocurrencies

Answer

Exchange cryptocurrencies

Answer

Mine cryptocurrencies

Question 13

What is the key benefit of using blockchain technology in cryptocurrency transactions?

Accepted Answer

Provides immutability and enhanced security for transaction records

Answer

Minimizes transaction fees

Answer

Significantly reduces transaction times

Question 14

Differentiate between a cryptocurrency and a token.

Accepted Answer

Cryptocurrencies operate on their blockchain, while tokens utilize an existing blockchain platform

Answer

Tokens have inherently higher value than cryptocurrencies

Answer

Cryptocurrencies are solely used for payments, while tokens are investment vehicles

Question 15

What is a prominent application of Ethereum?

Accepted Answer

Development and deployment of decentralized applications (dApps)

Answer

Online gaming platforms

Answer

Cross-border payment solutions

Answer

Currency trading and exchanges

Question 16

What is the primary objective of a smart contract?

Accepted Answer

Automating and executing contracts without the need for intermediaries or central authorities

Answer

Secure storage of cryptocurrency transactions

Answer

Creation of new cryptocurrencies

Question 17

Which of the following characterizes cryptocurrencies?

Accepted Answer

Decentralization

Answer

Centralized authority

Answer

Reversible transactions

Answer

Depreciation over time

Question 18

Who is attributed with the creation of Bitcoin?

Accepted Answer

Satoshi Nakamoto

Answer

Tim Berners-Lee

Answer

Elon Musk

Answer

Vitalik Buterin

Question 19

Which consensus mechanism is employed by Bitcoin?

Accepted Answer

Proof of Work

Answer

Delegated Proof of Stake

Answer

Proof of Stake

Question 20

What distinguishes a cryptocurrency from a token?

Accepted Answer

Cryptocurrencies possess their own blockchain, unlike tokens.

Answer

Tokens are inherently more valuable than cryptocurrencies.

Answer

Cryptocurrencies are more decentralized compared to tokens.

Question 21

What advantage do stablecoins offer?

Accepted Answer

Price stability

Answer

Unlimited divisibility

Answer

Anonymity

Answer

High returns

Question 22

What is the primary role of miners in the Bitcoin network?

Accepted Answer

Validating transactions and securing the network

Answer

Trading and holding Bitcoins

Answer

Generating new Bitcoins

Answer

Governing the network

Question 23

Which of the following could be a long-term impact of cryptocurrencies?

Accepted Answer

Disruption of traditional financial systems

Answer

Eradication of poverty

Answer

Universal harmony

Answer

Global economic collapse