CBP Bitcoin Basics and Cryptography

Question 1

What is the primary function of Bitcoin's blockchain?

Accepted Answer

To store transaction data in a secure and decentralized manner

Answer

To create new bitcoins

Answer

To control Bitcoin supply

Answer

To regulate Bitcoin prices

Question 2

Which cryptographic algorithm is used to secure Bitcoin transactions?

Accepted Answer

SHA-256

Answer

RSA

Answer

MD5

Answer

Blowfish

Question 3

What role do private keys play in Bitcoin transactions?

Accepted Answer

To sign transactions and prove ownership of Bitcoin

Answer

To generate new bitcoins

Answer

To encrypt messages on the network

Answer

To verify other users' transactions

Question 4

How does Bitcoin achieve decentralization?

Accepted Answer

By using a peer-to-peer network of nodes

Answer

By relying on a single trusted authority

Answer

By storing all Bitcoin data on a centralized server

Answer

By requiring government regulation

Question 5

What happens if a Bitcoin user loses their private key?

Accepted Answer

They permanently lose access to their Bitcoin

Answer

They can recover it through the Bitcoin network

Answer

They can request a new key from the Bitcoin foundation

Answer

Their transactions get reversed

Question 6

Why is Bitcoin considered pseudonymous rather than anonymous?

Accepted Answer

Because transactions are publicly recorded on the blockchain but not directly linked to real identities

Answer

Because transactions are hidden from all users

Answer

Because the government assigns Bitcoin addresses

Answer

Because Bitcoin requires identity verification for transactions