Practice Test Geeks(CBSE) Certified Blockchain Security Expert Practice Test
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Key Management and Wallet Security Flashcards

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Read the first 7 Key Management and Wallet Security flashcards as text

  1. What is a Hardware Security Module (HSM) primarily used for in blockchain environments?

    Answer: To securely generate, store, and manage cryptographic keys

    HSMs are tamper-resistant hardware devices purpose-built to securely generate, store, and manage cryptographic keys, preventing key extraction even by privileged users.

  2. What is the primary purpose of a BIP-39 mnemonic seed phrase?

    Answer: To provide a human-readable backup encoding for generating private keys

    BIP-39 defines a standard for generating a 12-24 word mnemonic phrase that encodes the entropy used to deterministically derive a wallet's private keys.

  3. Which wallet type provides the strongest protection against remote network-based attacks?

    Answer: Cold wallet stored on an air-gapped hardware device

    Cold wallets store private keys offline on air-gapped devices, making them immune to remote or network-based attacks since keys never touch an internet-connected system.

  4. What does a Hierarchical Deterministic (HD) wallet primarily enable?

    Answer: Generation of an unlimited tree of key pairs from a single master seed

    HD wallets (BIP-32) allow generating a hierarchical tree of key pairs from one master seed, enabling organized key management without storing each individual key separately.

  5. What is the primary security risk of using a hot wallet for storing cryptocurrency assets?

    Answer: Exposure of private keys to internet-connected systems vulnerable to remote attacks

    Hot wallets are connected to the internet, making private keys vulnerable to malware, phishing, and remote attacks that could expose or steal keys.

  6. What is the primary security advantage of a multi-signature (multisig) wallet?

    Answer: Elimination of single points of failure by requiring multiple key approvals

    Multisig wallets require M-of-N signatures to authorize transactions, ensuring that a single compromised key cannot enable unauthorized fund transfers.

  7. What does the BIP-44 derivation path m/44'/0'/0'/0/0 define in an HD wallet?

    Answer: A specific child key derived following the BIP-44 hierarchical structure

    BIP-44 defines a structured derivation path (purpose/coin-type/account/change/index) enabling standardized, interoperable key generation across compatible HD wallets.