Cryptocurrency Fundamentals Flashcards

A Bitcoin user spends a 1 BTC UTXO to pay 0.3 BTC. In a properly built transaction, where does most of the remaining value go?

Answer: It is sent to a change address controlled by the sender

UTXOs must be spent in full, so wallets create a change output back to the sender, and any value left unassigned becomes the miner fee.

Which key derivation direction is computationally feasible in Bitcoin?

Answer: Private key to public key to address

Elliptic curve multiplication and hashing are one-way functions, so derivation only flows from the private key outward.

Which elliptic curve does Bitcoin use for its public-key cryptography?

Answer: secp256k1

Bitcoin uses the secp256k1 curve for both ECDSA and Taproot Schnorr signatures.

How many words are in the standard BIP-39 English mnemonic wordlist?

Answer: 2048

BIP-39 uses a 2048-word list, so each word encodes 11 bits of entropy plus checksum.

An investigator finds a Bitcoin address beginning with 'bc1p'. What address type is this?

Answer: Taproot (P2TR)

Bech32m addresses starting with bc1p are Taproot outputs, while bc1q indicates SegWit v0.

What is the smallest unit of bitcoin recorded on-chain?

Answer: One satoshi, 0.00000001 BTC

A satoshi is one hundred-millionth of a bitcoin and is the base unit used in transactions.

In Ethereum's account-based model, which transaction field ensures each transaction from an account is processed once and in order?

Answer: Nonce

The nonce is a sequential counter per account that prevents replay and enforces transaction ordering.