Cryptocurrency Wallets and Security 3

Question 1

What is a multisignature (multisig) wallet?

Accepted Answer

A wallet requiring multiple private key signatures to authorize a transaction

Answer

Multisig wallets require M-of-N key holders to sign before funds can be moved, reducing single points of failure.

Question 2

Which scenario best describes a '2-of-3' multisig setup?

Accepted Answer

Any two of three designated keys must sign to spend funds

Answer

In a 2-of-3 multisig, at least two of the three authorized private keys must provide signatures to approve any transaction.

Question 3

What is a 'watch-only' wallet?

Accepted Answer

A wallet containing only a public key or address to track balances without spending ability

Answer

Watch-only wallets hold public keys or addresses to monitor incoming transactions and balances without storing private keys, preventing unauthorized spending.

Question 4

What is clipboard hijacking in the context of cryptocurrency transactions?

Accepted Answer

Malware that replaces a copied wallet address with an attacker's address

Answer

Clipboard hijacking malware monitors the clipboard and silently replaces any cryptocurrency address the user copies with the attacker's address.

Question 5

Why should a seed phrase never be stored as a screenshot or photo on a smartphone?

Accepted Answer

Cloud backups and malware can expose the image to attackers

Answer

Photos auto-sync to cloud storage and can be accessed by malware or data breaches, exposing the seed phrase to remote attackers.

Cryptocurrency Practice Test

Cryptocurrency Practice Test

Cryptocurrency Wallets and Security 3