Crypto Trading Crypto Basics

Question 1

What is a cryptocurrency wallet?

Accepted Answer

A digital tool that stores private keys used to access and manage your cryptocurrency

Answer

Crypto wallets do not store the actual cryptocurrency — they store the private keys that prove ownership and enable transactions on the blockchain.

Question 2

What is the difference between a hot wallet and a cold wallet?

Accepted Answer

A hot wallet is connected to the internet; a cold wallet is offline, providing greater security

Answer

Hot wallets (software, web) offer convenience but are vulnerable to hacking. Cold wallets (hardware, paper) are offline and much more secure for long-term storage.

Question 3

What is a blockchain block?

Accepted Answer

A collection of validated transactions bundled together and added to the blockchain

Answer

Each block contains a batch of transactions, a timestamp, a reference to the previous block's hash, and its own hash, forming the chain.

Question 4

What is market capitalization in crypto?

Accepted Answer

The total value calculated by multiplying the current price by the circulating supply

Answer

Market cap = price per token × circulating supply. It provides a measure of a cryptocurrency's total market value and relative size.

Question 5

What is a stablecoin?

Accepted Answer

A cryptocurrency pegged to a stable asset like the US dollar to minimize price volatility

Answer

Stablecoins like USDT and USDC are designed to maintain a 1:1 peg with a fiat currency, providing stability for trading and as a store of value.

Crypto Trading Practice Test

Crypto Trading Practice Test

Crypto Trading Crypto Basics