Bitcoin: A Comprehensive Guide to the Leading Cryptocurrency

Question 1

Who is credited as the creator of Bitcoin?

Accepted Answer

Satoshi Nakamoto

Answer

Elon Musk

Answer

Vitalik Buterin

Answer

Charles Hoskinson

Question 2

Which type of blockchain architecture does Bitcoin employ?

Accepted Answer

Public blockchain

Answer

Private blockchain

Answer

Consortium blockchain

Answer

Hybrid blockchain

Question 3

What is the predetermined maximum supply of Bitcoins that can exist?

Accepted Answer

21,000,000

Answer

10,000,000

Answer

50,000,000

Answer

There is no limit

Question 4

Which cryptographic algorithm is used in Bitcoin mining?

Accepted Answer

SHA-256

Answer

Ethash

Answer

Blake2b

Answer

Scrypt

Question 5

Which of the following is considered a primary advantage of Bitcoin?

Accepted Answer

Decentralization

Answer

Government regulation and oversight

Answer

Rapid transaction processing speeds

Answer

Extremely low transaction fees

Question 6

What is the primary functionality of a Bitcoin wallet?

Accepted Answer

Storing private keys and facilitating the sending and receiving of Bitcoins

Answer

Serving as a central database for recording all Bitcoin transactions

Answer

Acting as a physical repository for storing Bitcoin

Question 7

What is a key characteristic that distinguishes Bitcoin's blockchain technology?

Accepted Answer

Decentralization, enabling transactions to be verified and recorded without relying on a central authority.

Answer

Centralized control, where a single entity manages the network and transactions.

Answer

Slow transaction speed, limiting its usage for real-time applications.

Answer

High transaction fees, making small payments less feasible.

Question 8

What is the primary purpose of the Bitcoin mining process?

Accepted Answer

Validating transactions and adding them to the blockchain, ensuring the integrity of the network.

Answer

Generating new Bitcoins, increasing the supply of the cryptocurrency.

Answer

Storing user data on the blockchain, providing a secure and immutable record.

Question 9

Which of the following is a potential drawback of using Bitcoin?

Accepted Answer

High transaction fees for small-value payments, limiting its practicality for certain transactions.

Answer

Low transaction fees for international payments, making it a cost-effective option for cross-border transfers.

Answer

Anonymity and privacy, protecting users' financial information from unauthorized access.

Answer

Fast and secure transactions, ensuring efficient and reliable transfers.

Question 10

Which algorithm is employed to secure Bitcoin's blockchain and ensure data integrity?

Accepted Answer

SHA-256, a cryptographic hashing function that generates a unique and irreversible fingerprint for each block.

Answer

AES-256, a symmetric encryption algorithm used to encrypt data at rest.

Answer

MD5, an outdated hashing algorithm that is no longer considered secure.

Answer

RSA-2048, an asymmetric encryption algorithm used for secure communication.

Question 11

Identify a common practical application of Bitcoin technology.

Accepted Answer

Cross-border remittances, allowing for faster, cheaper, and more transparent international money transfers.

Answer

Paying taxes, as Bitcoin is not widely recognized as a form of tax payment.

Answer

Investing in stocks, as Bitcoin can be traded as an asset on financial markets.

Answer

Purchasing everyday goods, despite limited acceptance by merchants.

Question 12

Describe the difference between a private key and a public key in the context of Bitcoin.

Accepted Answer

A private key is kept secret and used to spend Bitcoins, while a public key is shared and used to receive Bitcoins.

Answer

A private key is used to receive Bitcoins, while a public key is used to spend Bitcoins.

Question 13

According to Bitcoin's monetary policy, what is the maximum number of Bitcoins that can ever be created?

Accepted Answer

21 million, ensuring a finite and fixed supply.

Answer

The number is not fixed and can be increased, potentially causing inflation.

Answer

50 million, providing a larger supply but still maintaining scarcity.

Answer

10 million, limiting the potential growth and adoption of Bitcoin.

Question 14

Which of the following is a defining characteristic of Bitcoin?

Accepted Answer

Decentralization

Answer

Unlimited issuance

Answer

High throughput

Answer

Centralized governance

Question 15

What is the core technology that forms the foundation of Bitcoin?

Accepted Answer

Blockchain

Answer

Hashgraph

Answer

Hyperledger Fabric

Answer

Directed Acyclic Graph (DAG)

Question 16

Which of the following is NOT a potential advantage of utilizing Bitcoin?

Accepted Answer

Absolute anonymity

Answer

Enhanced security

Answer

Transparency

Answer

Reduced transaction costs

Question 17

What is the process of generating new Bitcoins known as?

Accepted Answer

Mining

Answer

Minting

Answer

Forging

Answer

Staking

Question 18

Which type of Bitcoin wallet offers the highest level of security?

Accepted Answer

Hardware wallet

Answer

Online wallet

Answer

Software wallet

Answer

Paper wallet

Question 19

What is the name of the network that facilitates off-chain transactions for Bitcoin, improving its scalability?

Accepted Answer

Lightning Network

Answer

Hyperledger Fabric

Answer

Ethereum Network

Question 20

Who is credited as the pseudonymous creator of Bitcoin?

Accepted Answer

Satoshi Nakamoto

Answer

Gavin Wood

Answer

Charles Hoskinson

Answer

Vitalik Buterin

Question 21

What is the underlying technology that supports Bitcoin transactions?

Accepted Answer

Blockchain

Answer

Distributed Ledger Technology

Answer

Cloud Computing

Answer

Artificial Neural Networks

Question 22

Which of the following is NOT a characteristic of Bitcoin?

Accepted Answer

Centralized authority

Answer

Scarcity

Answer

Transparency

Answer

Pseudonymity

Question 23

How are new Bitcoins created?

Accepted Answer

Mining

Answer

Central bank issuance

Answer

Printing

Answer

Minting

Question 24

What is the purpose of a Bitcoin wallet?

Accepted Answer

Store and manage Bitcoins

Answer

Track Bitcoin prices

Answer

Verify Bitcoin transactions

Answer

Mine Bitcoins

Question 25

How does Bitcoin differ from traditional fiat currencies?

Accepted Answer

Decentralized, limited issuance

Answer

Physical form, government-backed

Answer

Stable value, interest-bearing

Answer

Inflation-proof, universally accepted

Question 26

What is the difference between a Bitcoin full node and a lightweight node?

Accepted Answer

Full node stores complete blockchain, lightweight node relies on trusted third parties

Answer

Full node verifies transactions, lightweight node performs mining

Answer

Full node is used for mining, lightweight node for transactions