Cryptocurrency Core Cryptographic Principles 4

Question 1

What is a zero-knowledge proof (ZKP) used for in cryptocurrency?

Accepted Answer

Proving a transaction is valid without revealing any underlying private data

Answer

ZKPs allow one party to prove knowledge of a secret (e.g., a valid transaction) to another party without revealing the secret itself.

Question 2

What is the significance of using a cryptographically secure pseudo-random number generator (CSPRNG) in wallets?

Accepted Answer

It ensures private keys are generated with sufficient entropy and cannot be predicted

Answer

A CSPRNG provides unpredictable, high-entropy randomness essential for generating private keys that cannot be guessed or reproduced by attackers.

Question 3

In HMAC (Hash-based Message Authentication Code), what role does the key play?

Accepted Answer

It is mixed with the message before hashing to bind authentication to a specific secret

Answer

HMAC XORs the key with padding constants and uses it in two nested hash operations, ensuring only parties with the secret key can verify or produce the MAC.

Question 4

Which of the following correctly describes the difference between confusion and diffusion in block ciphers?

Accepted Answer

Confusion obscures the relationship between key and ciphertext; diffusion spreads plaintext influence across the ciphertext

Answer

Shannon defined confusion (obscuring key-ciphertext relationships, via substitution) and diffusion (spreading plaintext influence, via permutation) as the two core principles of secure ciphers.

Question 5

What is Shamir's Secret Sharing used for in cryptocurrency key management?

Accepted Answer

Splitting a private key into multiple shares so a threshold number can reconstruct it

Answer

Shamir's Secret Sharing splits a secret into N shares where any K shares can reconstruct the secret, enabling threshold-based key custody without a single point of failure.

Cryptocurrency Practice Test

Cryptocurrency Practice Test

Cryptocurrency Core Cryptographic Principles 4