Blockchain 101 Certification Tokens, Wallets & Digital Assets 3

Question 1

What is the UTXO (Unspent Transaction Output) model used in Bitcoin?

Accepted Answer

A ledger model where each transaction consumes previous outputs and creates new unspent outputs

Answer

A method for compressing blockchain data to reduce storage requirements

Answer

A consensus mechanism that selects validators based on token holdings

Answer

A smart contract pattern for releasing funds based on time conditions

Question 2

What are 'gas fees' on the Ethereum network?

Accepted Answer

Fees paid in ETH to compensate validators for the computational resources used to process transactions

Answer

Penalties paid to validators when a transaction is rejected for invalid data

Answer

Monthly subscription costs charged by Ethereum node operators

Answer

Fees paid to token issuers whenever their ERC-20 token is transferred

Question 3

How is a blockchain transaction cryptographically authorized before broadcasting?

Accepted Answer

The transaction data is hashed and signed with the sender's private key

Answer

The sender emails confirmation to the receiving node operator

Answer

The receiving wallet generates a one-time approval code sent via SMS

Answer

The transaction is co-signed by the blockchain's founding organization

Question 4

What does a transaction 'confirmation' mean in a blockchain context?

Accepted Answer

Each new block added on top of the block containing the transaction, increasing finality assurance

Answer

An email acknowledgment from the recipient that they received the funds

Answer

A regulatory approval required for transactions above a certain value

Answer

An on-chain event fired by a smart contract when payment is detected

Question 5

What is the primary purpose of a stablecoin in the digital asset ecosystem?

Accepted Answer

To provide price stability by pegging the token's value to a stable asset like the US dollar

Answer

To increase in value faster than Bitcoin by using algorithmic supply control

Answer

To anonymize transactions by breaking the link between sender and receiver

Answer

To replace native blockchain currencies as the means of paying gas fees

Question 6

In DeFi (Decentralized Finance), what is a liquidity pool?

Accepted Answer

A smart contract holding reserves of two or more tokens that enables automated trading and yields

Answer

A reserve of funds locked by a government to back a national digital currency

Answer

A consortium of banks that provide fiat on-ramps for crypto users

Answer

A cold-storage vault shared between multiple exchanges to reduce hack risk

Question 7

What is 'token wrapping' (e.g., Wrapped Bitcoin — WBTC) used for?

Accepted Answer

Representing a token from one blockchain on another blockchain in a compatible format

Answer

Encrypting a token's metadata so only the owner can view its properties

Answer

Locking tokens for a fixed staking period to earn rewards

Answer

Converting an NFT into a fungible token to enable fractional ownership