CBP Bitcoin Transactions and Wallets

Question 1

What is the primary function of a Bitcoin wallet?

Accepted Answer

To store, send, and receive Bitcoin

Answer

A Bitcoin wallet is used to store, send, and receive Bitcoin securely using private and public keys.

Question 2

Which component is essential for signing Bitcoin transactions?

Accepted Answer

Private key

Answer

The private key is used to sign Bitcoin transactions, proving ownership and authorizing transfers.

Question 3

What determines the speed of a Bitcoin transaction confirmation?

Accepted Answer

The transaction fee

Answer

The transaction fee influences how quickly miners process and confirm a transaction on the Bitcoin network.

Question 4

Which of the following is a key difference between a hot wallet and a cold wallet?

Accepted Answer

Hot wallets are internet-connected, while cold wallets are offline

Answer

Hot wallets are connected to the internet, making them more convenient but less secure than cold wallets, which are offline.

Question 5

What happens if a Bitcoin user loses access to their private key?

Accepted Answer

The Bitcoin is permanently lost

Answer

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

(CBP) Certified Bitcoin Professional Practice Test