Bitcoin Commerce and Ecosystem Flashcards
7 cards from real CBP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Bitcoin Commerce and Ecosystem flashcards as text
What is a Bitcoin hardware wallet and why is it important for commerce?
Answer: A dedicated offline device that stores private keys securely away from internet threats
Hardware wallets store private keys in an isolated environment, protecting funds from malware and online attacks, which is critical for merchants holding Bitcoin.
Which type of Bitcoin wallet is most vulnerable to theft and hacking?
Answer: Hot wallet connected to the internet
Hot wallets remain connected to the internet, exposing private keys to malware, phishing, and remote attacks.
What is a Bitcoin invoice in the context of merchant payments?
Answer: A payment request containing amount, address, and expiry time sent to the payer
A Bitcoin invoice (BIP 70/BIP 21 URI) is a standardized payment request that specifies the exact amount, receiving address, and often an expiration time.
What does 'settlement finality' mean in Bitcoin commerce?
Answer: The point at which a transaction is considered irreversible and fully settled
Settlement finality in Bitcoin is typically considered achieved after 6 confirmations, at which point reversing the transaction would require enormous computational effort.
A Bitcoin business operating in the US is typically required to register as what type of entity with FinCEN?
Answer: A money services business (MSB)
US-based Bitcoin exchanges and processors must register as Money Services Businesses with FinCEN and comply with AML/BSA requirements.
What is a payment channel in the context of the Lightning Network?
Answer: A multi-signature Bitcoin transaction that locks funds between two parties for off-chain payments
A Lightning payment channel is opened by locking Bitcoin in a 2-of-2 multisig transaction, allowing unlimited off-chain payments between the two parties.
Which of the following best describes a Bitcoin remittance use case?
Answer: Sending Bitcoin internationally to family members as a cheaper alternative to wire transfers
Bitcoin remittances allow migrant workers to send money to family abroad with lower fees and faster settlement than traditional wire services like Western Union.