Cryptocurrency Basics Flashcards

What is the primary function of a blockchain in cryptocurrency?

Answer: To record and verify transactions

Blockchain acts as a decentralized digital ledger that records all transactions across a distributed network securely and transparently.

Which of the following best describes Bitcoin?

Answer: A decentralized cryptocurrency

Bitcoin is a decentralized digital currency that allows peer-to-peer transactions without the need for a central authority.

What does a private key in cryptocurrency enable the user to do?

Answer: Access and control funds

A private key grants the holder control over their cryptocurrency assets, allowing them to sign transactions and access their funds.

Which consensus mechanism does Bitcoin use?

Answer: Proof of Work

Bitcoin relies on Proof of Work (PoW), where miners solve complex puzzles to validate transactions and add new blocks to the blockchain.

What is a cryptocurrency wallet primarily used for?

Answer: To store and manage digital assets

Cryptocurrency wallets store private and public keys and allow users to send, receive, and manage their digital assets.

What does the term 'decentralized' mean in cryptocurrency?

Answer: Distributed across multiple participants

Decentralization means no single entity controls the network; instead, control is distributed among all participants.