C4 Cryptocurrency Basics

Question 1

What is the primary function of a blockchain in cryptocurrency?

Accepted Answer

To record and verify transactions

Answer

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

Question 2

Which of the following best describes Bitcoin?

Accepted Answer

A decentralized cryptocurrency

Answer

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

Question 3

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

Accepted Answer

Access and control funds

Answer

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

Question 4

Which consensus mechanism does Bitcoin use?

Accepted Answer

Proof of Work

Answer

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

Question 5

What is a cryptocurrency wallet primarily used for?

Accepted Answer

To store and manage digital assets

Answer

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

(C4) CryptoCurrency Certification Consortium Practice Test