CBP Bitcoin Basics and Cryptography 1

Question 1

What is the primary function of Bitcoin's blockchain?

Accepted Answer

To store transaction data in a secure and decentralized manner

Answer

The blockchain is a decentralized ledger that records all Bitcoin transactions in a secure and immutable way.

Question 2

Which cryptographic algorithm is used to secure Bitcoin transactions?

Accepted Answer

SHA-256

Answer

Bitcoin transactions are secured using the SHA-256 cryptographic hash function, ensuring data integrity and security.

Question 3

What role do private keys play in Bitcoin transactions?

Accepted Answer

To sign transactions and prove ownership of Bitcoin

Answer

Private keys are used to sign transactions, proving ownership and enabling the spending of Bitcoin securely.

Question 4

How does Bitcoin achieve decentralization?

Accepted Answer

By using a peer-to-peer network of nodes

Answer

Bitcoin achieves decentralization by distributing transaction validation and ledger maintenance across a global network of nodes.

Question 5

What happens if a Bitcoin user loses their private key?

Accepted Answer

They permanently lose access to their Bitcoin

Answer

Losing a private key results in the permanent loss of access to the associated Bitcoin, as there is no recovery mechanism.

(CBP) Certified Bitcoin Professional Practice Test