CBP Bitcoin Commerce and Ecosystem 4

Question 1

What is a Bitcoin hardware wallet and why is it important for commerce?

Accepted Answer

A dedicated offline device that stores private keys securely away from internet threats

Answer

Hardware wallets store private keys in an isolated environment, protecting funds from malware and online attacks, which is critical for merchants holding Bitcoin.

Question 2

Which type of Bitcoin wallet is most vulnerable to theft and hacking?

Accepted Answer

Hot wallet connected to the internet

Answer

Hot wallets remain connected to the internet, exposing private keys to malware, phishing, and remote attacks.

Question 3

What is a Bitcoin invoice in the context of merchant payments?

Accepted Answer

A payment request containing amount, address, and expiry time sent to the payer

Answer

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.

Question 4

What does 'settlement finality' mean in Bitcoin commerce?

Accepted Answer

The point at which a transaction is considered irreversible and fully settled

Answer

Settlement finality in Bitcoin is typically considered achieved after 6 confirmations, at which point reversing the transaction would require enormous computational effort.

Question 5

A Bitcoin business operating in the US is typically required to register as what type of entity with FinCEN?

Accepted Answer

A money services business (MSB)

Answer

US-based Bitcoin exchanges and processors must register as Money Services Businesses with FinCEN and comply with AML/BSA requirements.

(CBP) Certified Bitcoin Professional Practice Test

(CBP) Certified Bitcoin Professional Practice Test

CBP Bitcoin Commerce and Ecosystem 4