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Quizzes > Quizzes for Business > Finance

Cryptocurrency Knowledge Assessment Quiz

Test Your Cryptocurrency Basics and Trading Knowledge

Difficulty: Moderate
Questions: 20
Learning OutcomesStudy Material
Colorful paper art depicting elements related to a Cryptocurrency Knowledge Assessment quiz

Ready to measure your crypto IQ? This engaging Cryptocurrency Knowledge Quiz challenges your understanding of blockchain, wallets, and market mechanics. Perfect for students, educators, or anyone curious about digital currencies, it offers instant feedback and clear explanations to boost your confidence. Personalise any question in our editor to tailor the experience, then explore more quizzes or dive deeper with the Cryptocurrency Fundamentals Quiz . Take the quiz now and elevate your cryptocurrency know-how!

What is a blockchain?
A decentralized ledger distributed across a network
A centralized database managed by a single authority
A programming language for smart contracts
A consensus algorithm
A blockchain is a distributed ledger that records transactions across many nodes, ensuring immutability and transparency. It is not a programming language or solely a consensus algorithm.
Which of these was the first cryptocurrency?
Bitcoin
Ethereum
Dogecoin
Litecoin
Bitcoin, introduced in 2009 by Satoshi Nakamoto, was the first decentralized cryptocurrency. Other options appeared later as alternative projects.
What is the primary purpose of a digital wallet?
Storing private keys to access cryptocurrency
Mining new coins
Creating smart contracts
Issuing new tokens
Digital wallets securely store the private keys needed to access and sign cryptocurrency transactions. They do not mine coins or create tokens themselves.
Which consensus mechanism does Bitcoin use?
Proof of Work
Proof of Stake
Delegated Proof of Stake
Proof of Authority
Bitcoin relies on Proof of Work, where miners solve complex puzzles to add new blocks. Other mechanisms like Proof of Stake are used by different networks.
What is the primary function of a transaction in a blockchain network?
Transferring value between addresses
Distributing mining rewards
Validating new blocks
Creating smart contracts
Transactions serve to transfer cryptocurrency value from one address to another and are recorded on the blockchain. Mining rewards and smart contracts are separate processes.
What is a UTXO in Bitcoin?
Unspent Transaction Output
Untrusted Transaction Origin
Unified Token Output
Universal Transaction Opcode
A UTXO represents an output of a transaction that has not been spent and can be used as an input in a new transaction. It is fundamental to Bitcoin's coin transfer model.
Which feature distinguishes Ethereum from Bitcoin?
Smart contract functionality
Limited supply of tokens
SHA-256 hashing algorithm
UTXO-based accounting model
Ethereum introduced smart contracts, enabling programmable, self-executing agreements on its blockchain. Bitcoin does not natively support this functionality.
Which of these is a recommended security practice for digital wallets?
Backing up the seed phrase securely
Sharing the private key over email
Storing the password on a public forum
Using public Wi-Fi to authorize transactions
Backing up the seed phrase safely ensures recovery of wallet funds if devices fail. Sharing private keys or using insecure networks can compromise wallet security.
What role does the mempool play in a blockchain network?
Storing unconfirmed transactions before inclusion in a block
Holding completed blocks awaiting validation
Distributing mining rewards to nodes
Verifying the identity of network nodes
The mempool is a temporary pool of transactions that nodes have validated but which are not yet included in a block. Miners select transactions from the mempool to add to the next block.
How many confirmations are typically considered secure for large Bitcoin transactions?
Six confirmations
One confirmation
One hundred confirmations
Zero confirmations
Six confirmations are widely accepted for high-value Bitcoin transactions to ensure enough block depth against chain reorganizations. Fewer confirmations carry a higher risk of double-spending.
Which consensus algorithm is more energy-efficient than Proof of Work?
Proof of Stake
Delegated Proof of Work
Proof of Capacity
Proof of Activity
Proof of Stake requires validators to hold and lock tokens rather than solve energy-intensive puzzles, reducing power consumption. Proof of Work demands significant computational effort.
Which cryptocurrency uses a privacy protocol called zk-SNARKs?
Zcash
Litecoin
Ripple
Cardano
Zcash employs zk-SNARKs to enable private transactions by proving validity without revealing transaction details. Other listed cryptocurrencies do not use this protocol.
What is the primary function of a public key in cryptocurrency transactions?
Verifying a digital signature
Mining new blocks
Storing private keys
Generating wallet seed phrases
A public key verifies digital signatures to confirm transaction authenticity and is used as an address to receive funds. It does not store private keys or mine blocks.
In trading, what does slippage refer to?
The difference between expected and executed prices
Network congestion delays
A type of transaction fee
The process of halving block rewards
Slippage is the variance between the intended price of a trade and the price at which it is executed, often occurring in volatile or low-liquidity markets. It is not related to block reward formulas.
Which order type executes immediately at the best available market price?
Market order
Limit order
Stop order
Trailing stop order
A market order buys or sells instantly at the current best available price. Limit and stop orders execute only when specific price conditions are met.
In a Merkle tree, what is the primary benefit of the Merkle root?
Efficient verification of transaction integrity
Increases block size for more data
Determines mining difficulty
Sets transaction fee rates
The Merkle root summarizes all transactions in a block, enabling quick verification that a transaction is included without downloading the entire block. It does not affect block size or fees.
What does ASIC stand for in cryptocurrency mining?
Application-Specific Integrated Circuit
Automated Secure Investment Channel
Asynchronous System for Intelligent Computing
Advanced Signature Implementation Code
An ASIC is hardware designed for a specific application, such as mining cryptocurrencies with optimized performance. The other options are unrelated acronyms.
What is a 51% attack?
When a group controls the majority of mining power and can double-spend coins
When 51% of nodes go offline simultaneously
When transaction fees exceed block rewards by 51%
When block sizes exceed 51 megabytes
A 51% attack occurs if miners controlling over half the network's hashing power override legitimate transactions, potentially allowing double-spending. It is unrelated to node outages or fee structures.
In the context of cryptocurrency mining, what does hash rate measure?
The number of cryptographic hashes computed per second
The total size of the blockchain
The number of transactions per block
The number of nodes in the network
Hash rate quantifies mining power by measuring how many hash computations a miner or network can perform each second. It reflects computational capability, not blockchain size.
Which indicator is commonly used to measure momentum in cryptocurrency trading?
Relative Strength Index (RSI)
Moving Average Convergence (MAC)
Volume Weighted Average Price (VWAP)
Bollinger Bands
The RSI indicates overbought or oversold conditions by measuring price movement speed, making it a primary momentum indicator. Bollinger Bands and VWAP serve different analytical purposes.
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Learning Outcomes

  1. Analyse blockchain fundamentals and network operations
  2. Identify popular cryptocurrencies and their unique features
  3. Evaluate transaction workflows and security measures
  4. Apply digital wallet setup and management practices
  5. Demonstrate mining processes and consensus algorithms
  6. Master basic trading strategies and market analysis

Cheat Sheet

  1. Understand Blockchain Basics - Dive into how blockchain works as a decentralized, tamper-proof ledger that records transactions in chained blocks. You'll learn why cryptography and peer-to-peer networks make it so secure and transparent. Blockchain Explained
  2. Explore Popular Cryptocurrencies - Get to know Bitcoin, Ethereum and other leading digital coins, discovering their key features, differences and real-world use cases. This foundation will help you see why each token has its own niche. Cryptocurrency Overview
  3. Learn Transaction Processes - Follow every step of a blockchain transaction, from creating a transfer request to a miner verifying and adding it to the ledger. Understanding this flow helps you see the magic behind each recorded transfer. Transaction Guide
  4. Examine Security Measures - Unpack the cryptographic hashes, digital signatures and consensus rules that protect blockchains from fraud and hacking. A solid grasp of these tools is essential for anyone studying or working with distributed ledgers. Security Measures
  5. Set Up Digital Wallets - Learn how to create, secure and back up a cryptocurrency wallet for storing keys and funds. You'll also explore hot vs. cold wallets and best practices for keeping your assets safe. Wallet Setup Tips
  6. Understand Mining and Consensus - Discover how miners solve complex puzzles in Proof of Work or stake tokens in Proof of Stake to validate blocks. Grasping these algorithms is key to seeing how decentralized networks agree on a single version of truth. Mining & Consensus
  7. Master Trading Strategies - Study basic chart analysis, market indicators and risk management techniques to trade cryptocurrencies smartly. Building a strategy will help you make data-driven decisions rather than acting on FOMO. Trading Basics
  8. Recognize Blockchain Applications - Beyond money, blockchains power supply chain tracking, smart contracts, decentralized finance (DeFi) and more. Understanding these use cases shows why the tech has far-reaching potential. Use Case Highlights
  9. Stay Informed on Regulations - Keep up with laws and policies shaping cryptocurrency trading, taxation and compliance around the world. Regulatory knowledge keeps you ahead when markets and rules shift. Regulation Update
  10. Practice Safe Trading - Adopt key security habits like using trusted exchanges, enabling two-factor authentication and verifying contract addresses. These simple steps protect you from scams and hacks. Safety Best Practices
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