CBSE Key Management and Wallet Security 3

Question 1

What privacy risk arises from reusing the same blockchain address for multiple transactions?

Accepted Answer

Address linking enables transaction graph analysis to de-anonymize the user

Answer

Reusing addresses allows blockchain analysts to link all transactions to a single entity using graph analysis, potentially de-anonymizing users through their public transaction history.

Question 2

How does a Threshold Signature Scheme (TSS) differ fundamentally from traditional multisig?

Accepted Answer

TSS generates a single valid signature collaboratively without any party ever holding the complete private key

Answer

In TSS, parties use multi-party computation to collaboratively produce one signature without the full private key ever existing in one place, unlike multisig where each participant signs independently.

Question 3

Why is key escrow used in enterprise blockchain deployments?

Accepted Answer

To enable authorized recovery of keys when the primary holder is unavailable

Answer

Key escrow allows enterprises to recover blockchain asset access if a key holder departs, is incapacitated, or loses their key, satisfying business continuity and regulatory requirements.

Question 4

What is the security implication of generating private keys using a weak or predictable random number generator?

Accepted Answer

Private keys become predictable and vulnerable to enumeration or brute-force attacks

Answer

Insufficient entropy in key generation reduces the effective key space, making keys predictable and discoverable by attackers, as demonstrated by the Android Bitcoin wallet PRNG vulnerability.

Question 5

What is the primary security concern of storing blockchain private keys in a cloud-based key management service?

Accepted Answer

The cloud provider or an attacker breaching the provider gains potential access to stored keys

Answer

Delegating key storage to a cloud provider creates a critical third-party trust dependency; a provider breach, insider threat, or misconfiguration can expose all stored private keys.

(CBSE) Certified Blockchain Security Expert Practice Test

(CBSE) Certified Blockchain Security Expert Practice Test

CBSE Key Management and Wallet Security 3