CCE Wallets and Asset Security 3

Question 1

What is a 'brain wallet' and its primary security weakness?

Accepted Answer

A wallet memorized as a passphrase, weak because human-chosen phrases are predictable

Answer

Brain wallets derive keys from memorized passphrases, but humans choose predictable phrases that attackers can brute-force with dictionary attacks.

Question 2

What does 'dusting attack' refer to in cryptocurrency security?

Accepted Answer

Sending tiny amounts of crypto to addresses to de-anonymize wallet owners

Answer

Dusting attacks send minuscule amounts to many addresses; when victims move these funds, attackers can cluster addresses and link identities.

Question 3

Which feature distinguishes a 'stateless' hardware signer from a traditional hardware wallet?

Accepted Answer

It stores no keys on the device itself between sessions

Answer

Stateless signers (like some air-gapped devices) derive keys on demand from an externally held seed and store nothing persistently on the device.

Question 4

What is the purpose of a 'passphrase' (25th word) added to a BIP-39 seed?

Accepted Answer

It creates a completely different wallet, adding plausible deniability and extra security

Answer

A BIP-39 passphrase acts as an extra factor; any passphrase (including empty) produces a valid but different wallet, enabling plausible deniability.

Question 5

In the context of cold storage, what does 'air-gap' mean?

Accepted Answer

The signing device has no network connectivity at any point

Answer

An air-gapped device is physically isolated from all networks, ensuring private keys cannot be exfiltrated remotely.

(CCE) Certified Cryptocurrency Expert Practice Test