EXAM III BLOCK CHAIN QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2025/2026
What are two valuable services performed by trusted third parties like banks and credit card
companies? - Answers -Authenticate: you are who you say you are
-Prevent double spending: trusted third party checks every transaction to make sure the money
you want to spend is in your account and has not already been spent.
Identify 8 problems with traditional currencies issued by governments & transacted through
trusted third parties - Answers -Lack of transparency
-Delays in settlements
-High transaction fees
-Multiple versions of the truth
-Currency exchange fees
-Exchange rate volatility
-Cybercrime
-Rules change at whims
Identify 7 problems solved with peer-to-peer cryptocurrencies - Answers -Full transparency: the
single ledger (called the blockchain) of every transaction that has ever occurred is public and
available on every node in the network
-Full Private: no personal data is collected - blockchain only stores account transactions
-Rapid settlement: e.g. bitcoin transactions designed to settle every 10 mins
-Low transaction fees: a small fraction of bitcoin transaction is offered to miners who add a
block of transactions to the block chain ledger
-One version of the truth: there is only one ledger and everyone has a copy
, -No currency exchange fees because of country: bitcoin is a universal currency
-Volatility: NOT SOLVED YET, bitcoin protocol does have large swings in value
-Cybercrime unprofitable: bitcoin protocol makes it unprofitable to hack the ledger, a criminal
would need to spend 51% of the computing power of the entire network to try to change history
-Rules are added: but not subtracted by bitcoin community
Why is blockchain considered "unhackable"? - Answers -it does not store any personal data at all,
blockchain only stores account transactions. Also it is unprofitable to hack the blockchain
What are the top 5 cryptocurrencies as of June 2016, as measured by market capitalization? -
Answers -Bitcoin
-Ethereum
-Ripple
-Litecoin
-The DAO
Bitcoin history: who wrote the 8-page white paper "bitcoin: peer-to-peer electronic cash
system?" - Answers an unknown person or group named Satoshi Nakamoto
Bitcoin history: who is the real satoshi nakamoto - Answers Australian entrepreneur craig wright
Bitcoin history: after release of the white paper, how did bitcoin become a reality? - Answers Jan
3 2009, the first block is mined, bitcoin now exists
first transaction between nakamoto and hal finney
Bitcoin history: what is considered the first real transaction on Bitcoin in which bitcoins were
used to pay for a physical item? - Answers he first transaction happened may 22 2010 when
10,000 bitcoins were used to buy a pizza
Upon what metaphor is bitcoin based? - Answers the metaphor of gold mining
What is the maximum number of bitcoins? will that maximum number likely be enough? -
Answers There are about 21 million bitcoins that will be mined byt the year 2140. Yes 21 million
What are two valuable services performed by trusted third parties like banks and credit card
companies? - Answers -Authenticate: you are who you say you are
-Prevent double spending: trusted third party checks every transaction to make sure the money
you want to spend is in your account and has not already been spent.
Identify 8 problems with traditional currencies issued by governments & transacted through
trusted third parties - Answers -Lack of transparency
-Delays in settlements
-High transaction fees
-Multiple versions of the truth
-Currency exchange fees
-Exchange rate volatility
-Cybercrime
-Rules change at whims
Identify 7 problems solved with peer-to-peer cryptocurrencies - Answers -Full transparency: the
single ledger (called the blockchain) of every transaction that has ever occurred is public and
available on every node in the network
-Full Private: no personal data is collected - blockchain only stores account transactions
-Rapid settlement: e.g. bitcoin transactions designed to settle every 10 mins
-Low transaction fees: a small fraction of bitcoin transaction is offered to miners who add a
block of transactions to the block chain ledger
-One version of the truth: there is only one ledger and everyone has a copy
, -No currency exchange fees because of country: bitcoin is a universal currency
-Volatility: NOT SOLVED YET, bitcoin protocol does have large swings in value
-Cybercrime unprofitable: bitcoin protocol makes it unprofitable to hack the ledger, a criminal
would need to spend 51% of the computing power of the entire network to try to change history
-Rules are added: but not subtracted by bitcoin community
Why is blockchain considered "unhackable"? - Answers -it does not store any personal data at all,
blockchain only stores account transactions. Also it is unprofitable to hack the blockchain
What are the top 5 cryptocurrencies as of June 2016, as measured by market capitalization? -
Answers -Bitcoin
-Ethereum
-Ripple
-Litecoin
-The DAO
Bitcoin history: who wrote the 8-page white paper "bitcoin: peer-to-peer electronic cash
system?" - Answers an unknown person or group named Satoshi Nakamoto
Bitcoin history: who is the real satoshi nakamoto - Answers Australian entrepreneur craig wright
Bitcoin history: after release of the white paper, how did bitcoin become a reality? - Answers Jan
3 2009, the first block is mined, bitcoin now exists
first transaction between nakamoto and hal finney
Bitcoin history: what is considered the first real transaction on Bitcoin in which bitcoins were
used to pay for a physical item? - Answers he first transaction happened may 22 2010 when
10,000 bitcoins were used to buy a pizza
Upon what metaphor is bitcoin based? - Answers the metaphor of gold mining
What is the maximum number of bitcoins? will that maximum number likely be enough? -
Answers There are about 21 million bitcoins that will be mined byt the year 2140. Yes 21 million
