Blockchain and Cryptocurrency Explained Quiz Answers

Get Blockchain and Cryptocurrency Explained Quiz Answers

The sudden rise in the value of Bitcoin and other cryptocurrencies, and its subsequent decline, focused the world’s attention on cryptocurrencies as a means of payment. Blockchain technology powers Bitcoin and has been hyped as the next new, transformative technology.

In this course, we first discuss the technical underpinnings of blockchain and review key concepts such as decentralization and consensus algorithms. We then examine blockchain as an asset and review the dynamics of the cryptocurrency markets. Finally, we examine blockchain as a business solution, with a focus on understanding business cases in which blockchain does and does not make sense.

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Blockchain and Cryptocurrency Explained Week 01 Quiz Answers

Quiz : Case Discussion Partcipation

Q1. I certify that I participated in the case discussion and that my own original thinking is shown in my discussion post(s).

  • Yes, I participated in the case discussion for this lesson.
  • No, I did not participate in the case discussion for this lesson.

End of Module Quiz

Q1. What is the primary difference between a crypto “coin” and a crypto “token”?

  • A coin uses computationally intensive “mining” procedures such as proof-of-work while a token uses more efficient consensus means such as proof-of-stake
  • A coin is generally used for P2P payments. A token is generally used for C2B or B2B payments
  • A coin has significant return volatility while a token is usually stable with respect to the underlying fiat currency
  • A coin has its own blockchain while a token uses other blockchains

Q2. Please go to this SHA-256 online hashing tool and hash this message: “Fintech Innovations” (without the quotes) and do the same for this message: “FinTech Innovations”. Based on the properties of cryptographic hashing functions that we discussed, what can you infer from the two results?

  • Hashing functions are deterministic—they can be reverse engineered to infer the original inputs
  • Hashing functions have a high avalanche effect—small changes in the input would result in large changes in the output hash
  • Hashing functions might not offer collision resistance—it would be easy for two different inputs to produce the same hash

Q3. Why is hashing needed for public blockchains such as bitcoin?

  • It’s impossible to reverse therefore enhances trust in the system
  • It makes the search process over the blockchain more efficient
  • It’s collision proof and therefore ​is more efficient
  • It is energy-intensive to compute and therefore deters hacking attempts

Q4. Which of the following statements is NOT correct about a 51% attack?

  • The attack can be achieved by forking the blockchain and orphaning legitimate blocks
  • The probability of a successful attack is INVERSELY related to the amount of resources needed to produce and/or control a node
  • The 51% attack can be achieved more easily under the random consensus model
  • The attacker needs to physically hack 51% of all participating nodes

Q5. Which of the following are NOT a required component in a blockchain system? Please select all that apply

  • Complete decentralization—data should be stored on a distributed network of many computers
  • Crypto coins or tokens that facilitate value transfer within the system
  • User identities—either known identities or anonymized identities such as public keys
  • Data storage structure such as hash pointers and linked lists

Q6. What is the key relationship between public and private keys used in blockchains?

  • Taken together, public-private key pairs serve as the one and only identifier for a user of the blockchain, because it is impossible to create more than one key pair that uniquely identifies an individual
  • The public key is used to encrypt highly sensitive information while the private key is used to receive sensitive information
  • The keys are generated in pairs, therefore making it easy to infer the public key from the private key, and vice versa
  • Anything encrypted with public key can only be decrypted with private key, and anything encrypted with private key can only be decrypted with public key

Q7. What do nodes/miners actually do on the blockchain? Please select all that apply?

  • Running the blockchain-specific scripting language to execute some form of data processing tasks
  • Receiving the data and compiling them into blocks, if necessary
  • Running consensus algorithms specified by the blockchain to reconcile data differences
  • Organizing the executing marketing/promotional tasks to acquire and retain new users for the blockchain

Q8. What does “consensus” achieve in a blockchain

  • An increased level of operational security and hacking resistance
  • A unified set of record shared by the participants
  • An increased data processing speed and consequently higher throughput
  • Enhanced data integrity and redundancy

Q9. From our discussion on the blockchain data structure, we know that the blockchain data is mostly immutable. What if a piece of fraudulent data is uploaded to the blockchain?

  • The nodes would detect the tampering attempt and in the consensus process, remove the fraudulent data
  • It could be easily identified and eliminated if the blockchain is more centralized
  • This is not possible because it would not clear the consensus protocol
  • It becomes immutable fraudulent data on the blockchain

Blockchain and Cryptocurrency Explained Week 02 Quiz Answers

Quiz : Case Discussion Partcipation

Q1. I certify that I participated in the case discussion and that my own original thinking is shown in my discussion post(s).

  • Yes, I participated in the case discussion for this lesson.
  • No, I did not participate in the case discussion for this lesson.

End of Module Quiz

Q1. Which one of the following words best summarizes the nature of smart contracts?

  • Contract
  • Smart
  • Code
  • Standardized
  • Trustless

Q2. Which of the following statements, can be turned into a smart contract on Ethereum? Please select all that apply.

  • “Delete the previous data block”
  • “Transfer 5 ETH from my account to Bob’s account tomorrow”
  • “Output today’s date”
  • “Transfer 5 ETH from Bob’s account to my account”

Q3. Among all the consensus mechanisms that we discussed in class, which of them are the MOST costly to manipulate?

  • Proof-of-stake
  • Proof-of-Work
  • Random consensus

Q4. What is the main difference between Ethereum and Bitcoin?

  • As a blockchain, Ethereum can execute significantly more complicated tasks than Bitcoin
  • Ethereum is a token while Bitcoin is a coin
  • Code execution on Ethereum is significantly faster due to parallel processing by nodes
  • Ethereum has a hierarchy of nodes while Bitcoin has distributed nodes

Q5. How would one perform a major “software update” to the Bitcoin or Ethereum protocols that significantly improves their functionality?

  • Use the consensus protocols to distribute the update to all nodes ​
  • Use hashing functions to make the update small in size and efficient to distribute
  • Create a fork in the main blockchain
  • Remotely update client apps

Q6. What is the main purpose of solving the hashing puzzle in Bitcoin’s proof-of-work consensus algorithm?

  • To hide the identity of bitcoin user application
  • To prove that the node has computing power
  • To eliminate the possibility of double-spend attacks
  • To compress the transaction data and make them easier to distribute

Q7. How would you characterize the proof-of-work consensus protocol that’s used by so many blockchain implementations?

  • An economic deterrence to easy double-spend attacks
  • One of the quickest ways for nodes to reconcile data
  • A security protocol that makes the network more difficult to hack

Q8. What are the possible incentives that a new blockchain system can offer to induce nodes/miners to participate? Please select all that apply.

  • The right to create new coins/tokens 
  • Transaction fees received from processing user data
  • Ability to directly sell coins on cryptocurrency exchanges
  • The right to generate and broadcast transactions to the entire network

Q9. What is the role of transaction fees in public blockchains such as Bitcoin and Ethereum?

  • Nodes/miners will prioritize transactions with higher fees 
  • In practice, one does not need to pay a transaction fee on a public blockchain because by construction, it is accessible by the public
  • The fees serve as compensation to the blockchain developers for their effort in updating the maintaining the blockchain protocols
  • The fees will become less and less important as fewer new coins are minted in the future

Q10. Ethereum was originally designed as a decentralized, ‘turing-complete” computer. In practice, what is the current main role of this “computer”?

  • An alternative payment solution
  • A platform to launch new tokens
  • A replacement for centrally-organized entities
  • An environment for completely autonomous organizations

Blockchain and Cryptocurrency Explained Week 03 Quiz Answers

Quiz : Case Discussion Partcipation

Q1. I certify that I participated in the case discussion and that my own original thinking is shown in my discussion post(s).

  • Yes, I participated in the case discussion for this lesson.
  • No, I did not participate in the case discussion for this lesson.

End of Module Quiz

Q1. What is the key feature of the subclass of stablecoins represented by TUSD and Digix Gold?

  • Their returns are significantly more volatile than utility tokens such as ETH
  • They are physically backed by fiat currencies or commodities
  • They cannot be sold directly via crypto exchanges and transactions have to occur through banks
  • Their pegs to the underlying assets are digitally and dynamically adjusted on the blockchain

Q2. Say you just bought some cryptocurrency on an exchange such as Coinbase. What essentially did you just buy?

  • The private key for you to authorize the transaction of the cryptocurrency on the blockchain
  • The exchange’s promise that the cryptocurrency will be available to you should you decide to withdraw
  • The blockchain address that possess the cryptocurrencies
  • The ability to receive the cryptocurrencies from the seller’s blockchain address

Q3. Which of the following statements accurately describe the current state of the cryptocurrency market?

  • High return volatility
  • High return correlation within the crypto asset class
  • High return correlation with other commodities such as gold
  • Extreme segmentation with no dominant players

Q4. How can one acquire some cryptocurrencies? Please select all that apply.

  • Contact someone directly either online or offline, then transact directly on the blockchain
  • Deposit fiat currency into a crypto exchange, buy the ‘vurtual” crypto “balance” on the exchange, then withdraw via blockchain
  • Broadcast the transaction data to the miners and let them match a seller to your order

Q5. There are now many crypto asset management service providers available. What does “managing” your crypto assets actually mean?

  • The private key for you to authorize the transaction of the cryptocurrency on the blockchain
  • Designing diversified crypto investment portfolios
  • The ability to receive the cryptocurrencies from the seller’s blockchain address
  • Keeping the private keys safe

Q6. We learned that many blockchains technical limitations that prevent transactions from settling in real time (for example, you must wait at least ten minutes—usually longer—for your Bitcoin transactions to be verified and appear on the blockchain). If this is the case, then how are so many people able to trade bitcoin in high frequency?

  • They pay much higher transaction fees to the miners to get their transactions processed faster
  • They directly control more miners and therefore have a higher computing power
  • On the exchanges, they are not trading the actual bitcoins but exchange “balances” of bitcoins. These trades do not involve the blockchain at all

Q7. What is the key difference between “hot” and “cold” crypto storage?

  • Cold storage is significantly more convenient than hot storage
  • Hot storage is mostly accessible by online means. Cold storage is mostly offline.
  • Hot storage utilizes storage clouds while cold storage uses hard drives
  • Hot storage is significantly safer than cold storage

Q8. Which of the following are NOT a contributing factor to the dramatic return movements of the cryptocurrency asset class?

  • Limited total supply
  • Cybersecurity risks
  • Liquidity issues
  • Consumer sentiment

Q9. Despite being labeled as “decentralized”, the networks for many leading cryptocurrencies such as Bitcoin and Ethereum are ironically quite centralized. What does this mean? Please select all that apply.

  • Mining activities are concentrated into large mining centers and/or pools
  • Supply of hardware & equipment is concentrated in a few manufacturers
  • The decision-making power is concentrated into a handful of individuals
  • The users of these blockchains are concentrated in a few geographic regions
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