Understanding Cryptocurrency and Blockchain

What is a blockchain primarily used for in the context of cryptocurrencies?

• Storing data in a centralized database

• Recording transactions in a decentralized ledger

• Encrypting personal information

• Managing user accounts

Which of the following best describes the process of cryptocurrency mining?

• Creating new cryptocurrencies by solving complex mathematical problems

• Buying and selling cryptocurrencies on an exchange

• Storing cryptocurrencies in a digital wallet

• Transferring cryptocurrencies between users

What is the primary function of a cryptocurrency wallet?

• To mine new cryptocurrencies

• To store and manage digital currency

• To convert cryptocurrencies into fiat money

• To track cryptocurrency market trends

Which type of wallet is considered the most secure for storing cryptocurrencies?

• Online wallet

• Mobile wallet

• Hardware wallet

• Paper wallet

What is a smart contract in the context of blockchain technology?

• A legal agreement written in code that automatically executes actions

• A digital signature used to verify transactions

• A type of cryptocurrency used for smart devices

• A contract that requires manual approval by all parties

How does a transaction get added to a blockchain?

• It is verified by a central authority and then added

• It is broadcast to the network and added by miners after verification

• It is directly added by the sender

• It is stored temporarily until enough transactions are collected

What is the main advantage of decentralization in blockchain technology?

• Faster transaction speeds

• Reduced transaction costs

• Increased security and transparency

• Easier government regulation

Which of the following is a key characteristic of a decentralized network?

• Centralized control by a single entity

• Distributed control among multiple nodes

• Exclusive access to a select group of users

• Limited scalability

In the context of blockchain, what does the term "immutable" mean?

• The data can be easily modified

• The data is encrypted

• The data cannot be changed once recorded

• The data is stored temporarily

What role do miners play in the blockchain network?

• They create new blocks by solving cryptographic puzzles

• They provide customer support for cryptocurrency users

• They regulate the supply of cryptocurrencies

• They manage the blockchain's central database