Cryptocurrency and Digital Assets Flashcards
7 cards from real CBCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Cryptocurrency and Digital Assets flashcards as text
Which consensus mechanism does Ethereum currently use after 'The Merge' in 2022?
Answer: Proof of Stake
Ethereum transitioned from Proof of Work to Proof of Stake via 'The Merge' in September 2022, reducing energy consumption by ~99.95%.
What is a 'hard fork' in the context of cryptocurrency?
Answer: A protocol change that is not backward compatible, creating a permanent divergence
A hard fork is a permanent, backward-incompatible protocol change that splits the blockchain into two separate chains if not all nodes upgrade.
What is the primary purpose of a cryptocurrency 'mempool'?
Answer: A temporary holding area for unconfirmed transactions awaiting inclusion in a block
The mempool (memory pool) is a node's staging area for valid but unconfirmed transactions, ordered by fee priority for miners/validators.
Which of the following best describes a 'stablecoin'?
Answer: A digital asset pegged to a stable reference asset such as fiat currency or commodities
Stablecoins maintain a stable value by pegging to reference assets like USD, gold, or through algorithmic mechanisms.
What is 'slippage' in the context of cryptocurrency trading?
Answer: The difference between the expected trade price and the actual executed price
Slippage is the gap between expected and actual execution prices, typically caused by low liquidity or large order sizes relative to the market.
What distinguishes a 'utility token' from a 'security token'?
Answer: Utility tokens grant access to a product or service while security tokens represent investment contracts in an enterprise
Utility tokens provide platform access or functionality, while security tokens represent ownership or profit-sharing rights and are subject to securities regulation.
What is the function of a 'block explorer' in cryptocurrency?
Answer: A tool that allows users to view and search all transactions and blocks on a blockchain
A block explorer is a web-based tool providing a transparent, searchable interface to all on-chain data including transactions, addresses, and block details.