Blockchain 101 Certification Tokens, Wallets & Digital Assets

Question 1

What characteristic defines a fungible token?

Accepted Answer

Every token of the same type is interchangeable and holds equal value

Answer

Each token is unique and cannot be exchanged equally with another

Answer

Tokens are tied to a specific real-world physical asset

Answer

Tokens can only be transferred once between wallets

Question 2

Which Ethereum token standard is most commonly used for creating fungible tokens like cryptocurrencies and utility tokens?

Accepted Answer

ERC-20

Answer

ERC-721

Answer

ERC-1155

Answer

ERC-777

Question 3

What is a Non-Fungible Token (NFT)?

Accepted Answer

A unique cryptographic token that represents ownership of a distinct asset

Answer

A token with no monetary value stored on a centralized server

Answer

A token backed 1:1 by a fiat currency reserve

Answer

A token that can be subdivided into fractional units freely

Question 4

How do utility tokens primarily differ from security tokens?

Accepted Answer

Utility tokens grant access to a product or service; security tokens represent an investment contract

Answer

Utility tokens represent equity ownership; security tokens grant platform access

Answer

Utility tokens are always issued on Ethereum; security tokens use Bitcoin

Answer

Utility tokens are anonymous; security tokens require KYC only at issuance

Question 5

What is the process of creating new tokens and adding them to a blockchain called?

Accepted Answer

Minting

Answer

Burning

Answer

Staking

Answer

Forking

Question 6

Which token standard on Ethereum is specifically designed for Non-Fungible Tokens (NFTs)?

Accepted Answer

ERC-721

Answer

ERC-20

Answer

ERC-4626

Answer

ERC-223

Question 7

What does 'token burning' accomplish in a blockchain ecosystem?

Accepted Answer

It permanently destroys tokens by sending them to an unspendable address, reducing total supply

Answer

It converts tokens from one blockchain to another via a bridge

Answer

It freezes tokens so they cannot be transferred for a set period

Answer

It splits each token into two separate tokens of half the value