Cryptocurrency Core Concepts Flashcards

What is the primary purpose of a cryptographic hash function in blockchain?

Answer: Produce a fixed-size digest from arbitrary input data

Cryptographic hash functions take arbitrary input and produce a fixed-size output (digest) used to verify data integrity.

Which property ensures that a hash function output cannot be reversed to reveal the original input?

Answer: Pre-image resistance

Pre-image resistance means it is computationally infeasible to derive the original input from its hash output.

In a UTXO-based blockchain like Bitcoin, what does UTXO stand for?

Answer: Unspent Transaction Output

UTXO stands for Unspent Transaction Output, representing discrete amounts of cryptocurrency available to be spent.

What role does the Merkle root play in a Bitcoin block header?

Answer: It provides a single hash summarizing all transactions in the block

The Merkle root is a single hash derived from hashing all transactions in a block, enabling efficient and tamper-evident verification.

What is a soft fork in the context of blockchain protocol upgrades?

Answer: A backward-compatible upgrade where old nodes still accept new blocks

A soft fork introduces tightened validation rules that old nodes still accept, making it backward-compatible.

Which consensus mechanism requires validators to lock up cryptocurrency as collateral to participate in block creation?

Answer: Proof of Stake

Proof of Stake requires validators to stake (lock up) coins as collateral, which can be slashed for dishonest behavior.

What is the significance of the 'genesis block' in a blockchain?

Answer: It is the first block hard-coded into a blockchain with no predecessor

The genesis block is block zero, hard-coded into the client software as the immutable starting point of the chain.