CCE Wallets and Asset Security 5 — Questions and Answers
Question 1: What is a 'stealth address' in cryptocurrency privacy?
- A temporary exchange deposit address that self-destructs after use
- A one-time address generated by the sender so only the recipient can detect incoming funds (Correct answer)
- An address hidden behind a Tor node for routing anonymity
- A smart contract address that requires a zero-knowledge proof to spend from
Correct answer: A one-time address generated by the sender so only the recipient can detect incoming funds
Stealth addresses use the recipient's public key to generate a unique one-time address per transaction that only the recipient can scan and spend from.
Question 2: What does 'SLIP-0039' define in the context of hardware wallets?
- A standard PIN brute-force lockout policy
- Shamir's Secret Sharing for mnemonic backup (Correct answer)
- A secure communication protocol between hardware wallets and host software
- An extended address format for multi-currency wallets
Correct answer: Shamir's Secret Sharing for mnemonic backup
SLIP-0039 (used by Trezor's Shamir Backup) standardizes how a BIP-39 seed can be split into multiple shares using Shamir's Secret Sharing.
Question 3: Which scenario best illustrates a 'SIM swap' attack targeting a crypto user?
- An attacker clones a hardware wallet's SIM-authenticated firmware
- An attacker convinces a carrier to transfer the victim's phone number to a new SIM, intercepting SMS 2FA codes (Correct answer)
- An attacker physically swaps SIM cards while the victim is sleeping
- An attacker exploits a weak SIM PIN to bypass wallet encryption
Correct answer: An attacker convinces a carrier to transfer the victim's phone number to a new SIM, intercepting SMS 2FA codes
SIM swapping involves social-engineering a mobile carrier to reassign the victim's number, giving the attacker control of SMS-based 2FA and account recovery.
Question 4: What is the purpose of 'PSBT' (Partially Signed Bitcoin Transaction)?
- A format that allows offline devices to contribute signatures before broadcasting (Correct answer)
- A transaction type that splits fees among multiple signers
- A Bitcoin protocol upgrade that reduces transaction size
- A mempool reservation system for high-priority transactions
Correct answer: A format that allows offline devices to contribute signatures before broadcasting
PSBT (BIP-174) is a standardized format for passing an unsigned or partially-signed transaction between devices (e.g., hot and cold wallets) to collect signatures before broadcasting.
Question 5: Why should users verify the receive address displayed on a hardware wallet's screen rather than trusting the host computer's display?
- Host software may show a different address injected by malware (Correct answer)
- Hardware screens display addresses in a more readable compressed format
- Host computers cannot display full bech32 addresses correctly
- Hardware wallets generate a different address for each session
Correct answer: Host software may show a different address injected by malware
Malware on the host computer can replace the displayed address with the attacker's; the hardware wallet's trusted screen shows the genuine address.
Question 6: What distinguishes 'custodial' from 'non-custodial' wallets in terms of security responsibility?
- Custodial wallets use stronger encryption than non-custodial ones
- With custodial wallets, a third party controls the private keys; with non-custodial, the user does (Correct answer)
- Non-custodial wallets require KYC while custodial wallets do not
- Custodial wallets only support proof-of-work chains
Correct answer: With custodial wallets, a third party controls the private keys; with non-custodial, the user does
In a custodial wallet, the service provider holds the private keys, meaning users rely on that party's security; non-custodial wallets give users sole key control.
Question 7: Which metal backup option provides the strongest resistance to physical destruction of a seed phrase?
- Laminated paper stored in a fireproof safe
- Stainless steel or titanium plates with engraved or stamped seed words (Correct answer)
- Encrypted USB drive in a Faraday cage
- Waterproof polymer card with laser-printed words
Correct answer: Stainless steel or titanium plates with engraved or stamped seed words
Metal plates (stainless steel or titanium) withstand fire, water, and physical impact far better than paper, polymer, or electronic storage.
CCE Wallets and Asset Security 5
What is a 'stealth address' in cryptocurrency privacy?