Bitcoin for Everybody | PRDV151

PRDV151: Bitcoin for Everybody Answers

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  1. Who may review changes to Bitcoin?
    a. Anybody
    b. Bitcoin exchanges
    c. The BDFL (Benevolent Dictator For Life)
a. Anybody
  1. What was a distinguishing feature of Adam Back’s HashCash?
    a. Public keys
    b. Proof of work
    c. A21Mcoin limit
b. Proof of work
  1. Economist William Stanley Jevons observed that money evolves over time. Which of the following best describes the order
    that money evolves in?
    a. 1.medium of exchange; 2. store of value, 3. unit of account
    b. 1. collectible; 2. store of value; 3. medium of exchange; 4. unit of account
    c. 1.medium of exchange; 2. unit of account; 3. store of value; 4. collectible

b. 1. collectible; 2. store of value; 3. medium of exchange; 4. unit of account

  1. Why did the classical gold standard break down?
    a. Attacks by speculative investors caused price fluctuations
    b. Governments no longer kept the monetary promises they were entrusted with
    c. Paper currencies provided more productivity by enabling the faster flow of money

b. Governments no longer kept the monetary promises they were entrusted with

  1. What problems can money have if it does not have “censorship resistance”?
    a. Payments cannot be made privately
    b. Payments cannot be made without first seeking permission
    c. The monetary good cannot be identified and verified quickly

b. Payments cannot be made without first seeking permission

PRDV151: Bitcoin for Everybody Answers

  1. Over recent decades, what has happened to the “risk-free rate of return”?
    a. It has gone up
    b. It has gone down
    c. It has stayed about even

b. It has gone down

  1. What was a distinguishing feature of Nick Szabo’s Bit Gold?
    a. It included a Bit Gold mining scheme to help with the creation of new Bit Gold
    b. It included a digital ownership registry with hashes linked to public keys of their creators
    c. It provided collision resistance making it hard to find two inputs that hash to the same output.

b. It included a digital ownership registry with hashes linked to public keys of their creators

  1. Bitcoin development reached a stalemate in 2016 due to disagreements over which of the following?
    a. The method of marketing Bitcoin
    b. The method of scaling Bitcoin using larger blocks
    c. The way Bitcoin users should connect to the network

b. The method of scaling Bitcoin using larger blocks

  1. What would happen if the Bitcoin blockchain had multiple competing branches?
    a. Bitcoin as a project would die, since Bitcoin has no way to deal with this scenario
    b. Potential ‘ties’ would be broken as new blocks are formed, since the network switches to the longest branch available
    c. A developer would have to intervene to select which chain is correct, which is why developers need to be
    supported

b. Potential ‘ties’ would be broken as new blocks are formed, since the network switches to the longest branch available

  1. When using a hardware wallet, what is generally the best practice to confirm send or receive addresses and the amount of Bitcoin to send/receive?
    a. On a hardware wallet website wallet to see the amount “send 0.001 Bitcoin to address bc…”
    b. On the hardware wallet device itself the amount of Bitcoin to address “send 0.001 Bitcoin to address bc1…”
    c. Check what the laptop/desktop screen for the hardware wallet interface is showing in terms of “send 0.001 Bitcoin to address bc…”

b. On the hardware wallet device itself the amount of Bitcoin to address “send 0.001 Bitcoin to address bc1…”

  1. What is one of the trade-offs required for the Lightning Network to operate?
    a. The Lightning Network does not allow for private channels
    b. Lightning node participants must be online for transactions to occur
    c. Additional cryptographic assumptions are required for each transaction

b. Lightning node participants must be online for transactions to occur

PRDV151: Bitcoin for Everybody Answers

  1. Which of the following best describes money?
    a. A shared belief held by the members of society
    b. A battery for society, like stored energy to be drawn on by users
    c. A good selected for by society based on objective characteristics

c. A good selected for by society based on objective characteristics

  1. Why did the classical gold standard break down?
    a. Attacks by speculative investors caused price fluctuations
    b. Governments no longer kept the monetary promises they were entrusted with
    c. Paper currencies provided more productivity by enabling the faster flow of money

b. Governments no longer kept the monetary promises they were entrusted with

  1. Why is durability important for money?
    a. Being durable is a show of “unforgeable costliness”
    b. Being hard to destroy helps make it a more impressive monetary good
    c. If it were easily destroyed, people could no longer trade using that monetary
    good

c. If it were easily destroyed, people could no longer trade using that monetary
good

  1. Who benefits from fiat inflation, and what are the consequences of it?
    a. People with money in a savings account benefit since they will receive increased
    interest rates
    b. People who are owed money benefit since it becomes easier for the person in
    debt to repay the debt
    c. Debt holders benefit since their debts are ‘inflated away’, which creates incentives
    to take on unsustainable debts

c. Debt holders benefit since their debts are ‘inflated away’, which creates incentives
to take on unsustainable debts

  1. What does proof of work in Bitcoin achieve?
    a. It reduces the computational load on the computers participating in the network
    b. It ties the physical world to consensus in Bitcoin’s ledger since it is costly to
    produce
    c. It helps identify prime numbers that may have applications in other areas of
    science and technology

b. It ties the physical world to consensus in Bitcoin’s ledger since it is costly to
produce

  1. Over recent decades, what has happened to the “risk-free rate of return”?
    a. It has gone up
    b. It has gone down
    c. It has stayed about even

b. It has gone down

PRDV151: Bitcoin for Everybody Answers

  1. If Bitcoin were to succeed at becoming widely used as money, why would this be?
    a. It has more credible monetary properties
    b. It has a stronger ‘religion’ or faith built around it
    c. It achieved government approval and acceptance

a. It has more credible monetary properties

  1. Why is it unlikely that governments in the free world will ban Bitcoin?
    a. Bitcoin small, and does not seem as if it will grow to a size that will cause governments to consider banning it
    b. As more users adopt Bitcoin and agree that it will rise in value so dramatically, bans will become politically unfeasible
    c. Bitcoin operates completely outside the purview of all governments in the world, and is therefore “unbannable”

b. As more users adopt Bitcoin and agree that it will rise in value so dramatically, bans will become politically unfeasible

  1. What were the “crypto wars” about?
    a. Being able to make cryptocurrencies free from government regulation in relation
    to securities
    b. A series of yearly contests where cryptographers would meet up and try to break
    each other’s encryption algorithms
    c. Disagreements between the intelligence community and privacy activists over the rights of citizens to use end-to-end encryption

c. Disagreements between the intelligence community and privacy activists over the rights of citizens to use end-to-end encryption

  1. What was a distinguishing feature of Nick Szabo’s Bit Gold?
    a. It included a Bit Gold mining scheme to help with the creation of new Bit Gold
    b. It included a digital ownership registry with hashes linked to public keys of their creators
    c. It provided collision resistance making it hard to find two inputs that hash to the
    same output.

b. It included a digital ownership registry with hashes linked to public keys of their creators

  1. Bitcoin development reached a stalemate in 2016 due to disagreements over which of
    the following?
    a. The method of marketing Bitcoin
    b. The method of scaling Bitcoin using larger blocks
    c. The way Bitcoin users should connect to the network

b. The method of scaling Bitcoin using larger blocks

  1. What would happen if the Bitcoin blockchain had multiple competing branches?
    a. Bitcoin as a project would die, since Bitcoin has no way to deal with this scenario
    b. Potential ‘ties’ would be broken as new blocks are formed, since the network switches to the longest branch available
    c. A developer would have to intervene to select which chain is correct, which is why developers need to be supported
b. Potential 'ties' would be broken as new blocks are formed, since the network switches to the longest branch available
  1. Nowadays, what kind of technology is required to competitively mine Bitcoin?
    a. ASIC
    b. FPGA
    c. GPU

a. ASIC

PRDV151: Bitcoin for Everybody Answers

  1. The saying “Not your keys, not your coins” refers to which type of key?
    a. Public keys
    b. Private keys
    c. Ephemeral keys

b. Private keys

  1. Bitcoin and altcoins also offer a distinctive choice in which of the following characteristics?
    a. Using a blockchain
    b. Using public addresses
    c. Having a credibly fixed supply limit

c. Having a credibly fixed supply limit

  1. What would happen if the current maintainers tried to organize a coup on the Bitcoin GitHub repository?
    a. The ecosystem would be tricked into following them
    b. The ecosystem would notice, but would still be forced to follow them
    c. The focal point for development would shift i.e. people would run different code

c. The focal point for development would shift i.e. people would run different code

  1. What does open source development mean?
    a. The source code is available to be contributed to
    b. Developers must remain open-minded at all times
    c. The source code is not able to be contributed to but is available

a. The source code is available to be contributed to

  1. If you want to buy Bitcoin in a more private manner, which method is most suitable?
    a. Buying from a regulated OTC provider
    b. Buying from a large regulated exchange
    c. Buying it peer-to-peer from someone at a meetup

c. Buying it peer-to-peer from someone at a meetup

  1. For larger amounts of Bitcoin, what kind of wallet is suitable?
    a. Phone wallet
    b. Desktop wallet
    c. Multi-signature wallet

c. Multi-signature wallet

PRDV151: Bitcoin for Everybody Answers

  1. Why is it important to use well tested open-source software to interact with Bitcoin?
    a. It helps with using the Lightning Network
    b. Open Source software uses more advanced security techniques
    c. If there are bugs or malicious code, it can be identified by an external review

c. If there are bugs or malicious code, it can be identified by an external review

  1. In what context does it usually make more sense to use Lightning Network transactions instead of Bitcoin on-chain transactions?
    a. For very large, high-value transactions
    b. For low-value commerce or day-to-day spending
    c. For settlement transactions between Bitcoin banks

b. For low-value commerce or day-to-day spending

  1. What is the general recommendation in relation to Bitcoin and self custody?
    a. Reduce your risk by using self-custody
    b. Use the Sherman technique to secure your Bitcoin
    c. Avoid generating additional entropy for your Bitcoin seeds

a. Reduce your risk by using self-custody

  1. What is one of the main disadvantages of barter versus using money?
    a. Money solves the Byzantine General’s Problem
    b. The participants might experience language difficulties
    c. People trading must overcome the double coincidence of wants problem

c. People trading must overcome the double coincidence of wants problem

  1. Why did governments go “off the gold standard” during World War I?
    a. It was difficult to exchange gold during wartime
    b. Gold was not efficient enough as a transfer mechanism
    c. Governments inflated the supply of paper currency to fund warfare

c. Governments inflated the supply of paper currency to fund warfare

PRDV151: Bitcoin for Everybody Answers

  1. Why is scarcity arguably the most important attribute of money?
    a. A monetary good must not be perishable or easily destroyed
    b. A monetary good must not be easy to obtain or produce in quantity
    c. A monetary good must have scarcity to be dictated as money by governments

b. A monetary good must not be easy to obtain or produce in quantity

  1. Historically, gold was critiqued as money because people would “hoard” it. How should we analyze this?
    a. Hoarding is bad for society because it creates situations where there is not enough money to go around
    b. We use money and hold a cash balance to reduce future uncertainty; because of this, hoarding is not necessarily an issue
    c. Hoarding money is bad for society because it encourages people to sit on their money and not do productive things with it

b. We use money and hold a cash balance to reduce future uncertainty; because of this, hoarding is not necessarily an issue

  1. Which of the following can we compare Bitcoin’s energy use with?
    a. The costs of Visa and Mastercard running their networks
    b. Free and instant transfers provided by retail banking systems
    c. The costs society pays under a government fiat money standard

c. The costs society pays under a government fiat money standard

  1. How does fiat money inflation affect individual behavior?
    a. Individuals have less incentive to invest and instead will save money into their bank accounts
    b. They go about their behaviors mostly unchanged in terms of earning, saving, spending, or investing money
    c. Individuals must either become investment analysts and speculators or pay someone to perform this role for them

c. Individuals must either become investment analysts and speculators or pay someone to perform this role for them

  1. If the G20 countries coordinated to ban Bitcoin, what would be the likely outcome?
    a. Bitcoin would be totally fine with no adaptation needed
    b. Bitcoin’s “immune system” would accelerate innovation to immunize the threat
    c. Bitcoin would be destroyed as nobody would use it and the value would go down

b. Bitcoin’s “immune system” would accelerate innovation to immunize the threat

  1. Was Bitcoin a one-off invention?
    a. Yes, it was a singular breakthrough by Satoshi Nakamoto
    b. No, blockchain technology is the underlying technology behind Bitcoin
    c. No, it was the result of 40 years of research and development by cypherpunks and others

c. No, it was the result of 40 years of research and development by cypherpunks and others

PRDV151: Bitcoin for Everybody Answers

  1. Bitcoin transactions must reference which of the following?
    a. The 21M limit
    b. The unspent transaction output
    c. Satoshi Nakamoto, the creator of Bitcoin

b. The unspent transaction output

  1. How often does Bitcoin go through a block subsidy halving event?
    a. Every year
    b. Every 2 years
    c. Every 4 years

c. Every 4 years

  1. Battles amongst cryptocurrencies in the ‘market for money’ are about which of the following?
    a. Monetary qualities
    b. Technological capabilities
    c. The enthusiast community

a. Monetary qualities

  1. Who may propose/review changes to Bitcoin?
    a. Anybody
    b. Bitcoin exchanges
    c. The BDFL (Benevolent Dictator For Life)

a. Anybody

  1. When a developer wants to create a change to Bitcoin core’s codebase, which of the following allows this to be done?
    a. A merge
    b. A pull request
    c. A push request

b. A pull request

  1. For most people, what is the easiest and most cost-effective way to acquire Bitcoin?
    a. Mining it
    b. Buying it
    c. Earning it

b. Buying it

PRDV151: Bitcoin for Everybody Answers

  1. For smaller amounts of Bitcoin for in-person transactions, what kind of wallet is most suitable?
    a. Phone wallet
    b. Desktop wallet
    c. Hardware wallet

a. Phone wallet

  1. According to Rothbard, the monetary order had different characteristics during different periods. In the last 300 years, which era provided the best monetary order?
    a. The classical gold standard (1815-1914)
    b. The era of fluctuating fiat currencies (1973 to present)
    c. The Bretton-Woods new gold exchange standard (1945-1968)

a. The classical gold standard (1815-1914)

  1. Why is electricity used for Bitcoin mining not wasted?
    a. If users feel it is worth paying the market rate for electricity, it is not wasted
    b. Since Bitcoin mining equipment is specialized, it makes efficient use of electricity
    c. Bitcoin mining equipment is general commodity hardware, which spreads the cost across many people

a. If users feel it is worth paying the market rate for electricity, it is not wasted

  1. Where is Bitcoin’s ledger of transactions contained?
    a. A directed acyclic graph
    b. A set of accounts showing who owns what
    c. A chain of blocks where each references the prior block

c. A chain of blocks where each references the prior block

  1. Which of the following is a good analogy for Bitcoin mining?
    a. Constructing of a grand cathedral that requires long-term planning and great resources
    b. Creating a decentralized lottery system where those who contribute computing power earn tickets
    c. Creating a top-down centralized system where a committee determines who receives newly created supply

b. Creating a decentralized lottery system where those who contribute computing power earn tickets

  1. Today, the world is trending in which direction?
    a. Towards one money, dictated by government fiat or decree
    b. Towards the most saleable money, chosen without a central coordinator
    c. Towards many monies, each corresponding to different commercial zone

b. Towards the most saleable money, chosen without a central coordinator

  1. Why is Bitcoin not a pyramid scheme?
    a. It is not a business, has no employees, and its supply is finitely scarce
    b. It improves on fiat money with new technology, uses new encryption, and is programmable
    c. It promises very high rewards to people who join, has inspired artwork, and is building up a history

a. It is not a business, has no employees, and its supply is finitely scarce

PRDV151: Bitcoin for Everybody Answers

  1. What was a distinguishing feature of Wei Dai’s first B-money proposal?
    a. It contained a difficulty adjustment algorithm
    b. All participants had to maintain separate copies of the same ledger
    c. It offered pre-image resistance to ensure that the hash function protected the pre-image

b. All participants had to maintain separate copies of the same ledger

  1. The events of SegWit2X helped all understand that which of the following groups ultimately controls Bitcoin?
    a. Developers
    b. Miners
    c. Users

c. Users

  1. In terms of Bitcoin core contribution, which of the following is more of a “bottleneck”?
    a. Code review
    b. New pull requests
    c. New discussions on the mailing list

a. Code review

  1. For longer-term backup of your Bitcoin wallet seed words, which of the following is usually
    recommended?
    a. Steel backup
    b. Paper backup
    c. Memorising your 24 seed words

a. Steel backup

  1. Which of the following is a common recommendation regarding staying more private with your Bitcoin online?
    a. Use closed-source software
    b. Make sure you hold your own private keys
    c. Avoid posting your Bitcoin addresses publicly online

c. Avoid posting your Bitcoin addresses publicly online

PRDV151: Bitcoin for Everybody Answers

  1. What is “simjacking”?
    a. When a Bitcoin simulated test is hijacked by scammers
    b. When your mobile phone number is hijacked by a fraudster
    c. When you simulate a Bitcoin transaction on behalf of someone else

b. When your mobile phone number is hijacked by a fraudster

  1. Where did privacy and cryptography activists famously have their discussions?
    a. A cyber punk mailing list
    b. A cyber punk conference
    c. A cyber punk group phone call

a. A cyber punk mailing list

  1. Which of the following is a crucial differentiator between Bitcoin and altcoins?
    a. It has a decentralized ecosystem without a leader or central office
    b. It has more persuasive leaders who shape the conversation on cryptocurrency
    c. It has name recognition, and whoever retains the “Bitcoin” name is more recognizable

a. It has a decentralized ecosystem without a leader or central office

  1. How does the Lightning Network work to increase the rate of Bitcoin transactions possible?
    a. It increases the size of Bitcoin blocks to fit more on-chain transactions inside them
    b. It takes transactions “off the chain” by only settling the closing of channels on the lightning network
    c. It uses external storage to increase the storage capacity of Bitcoin’s blockchain, relying on large service providers

b. It takes transactions “off the chain” by only settling the closing of channels on the lightning network

  1. How should you deal with the 24 seed words from your Bitcoin wallet(s)?
    a. It is optional to back them up
    b. Secure them and be careful not to provide them to anyone else
    c. Back them up into the cloud unencrypted so that you have additional protection

b. Secure them and be careful not to provide them to anyone else

  1. Bitcoin wallets can be thought of as which of the following?
    a. A school of fish tracking your Bitcoins for you
    b. A keychain holding your secret passwords to sign messages that unlock and spend Bitcoins
    c. A way to interact with a custodian bank that acts as your retail banking partner for transactional needs

b. A keychain holding your secret passwords to sign messages that unlock and spend Bitcoins

PRDV151: Bitcoin for Everybody Answers

  1. Which of the following statements about deflation is true?
    a. A deflationary environment would not provide regular inflation for worker wage increases
    b. Deflation can only have negative impacts on society because fewer people will spend money
    c. Growth deflation is beneficial because as society produces more, prices fall and more wealth is created

c. Growth deflation is beneficial because as society produces more, prices fall and more wealth is created

  1. What does Bitcoin’s monetary network gain when it has more participants than alternative cryptocurrencies?
    a. More state support to assert power
    b. More trading partners and an expanded range of choice
    c. Support for a greater number of transactions per second

b. More trading partners and an expanded range of choice

  1. What was one key reason for the SegWit deadlock?
    a. It did not permit the block size to expand quickly enough
    b. It would cause one source of competitive advantage for miners (AsicBoost) to be lost
    c. It was too small of a block size increase to meaningfully raise the transaction throughput

b. It would cause one source of competitive advantage for miners (AsicBoost) to be lost

  1. What role does a Bitcoin node play?
    a. It validates Bitcoin transactions and blocks
    b. It provides a platform for Bitcoin discussion
    c. It performs SHA256 hashing, mining new Bitcoins

a. It validates Bitcoin transactions and blocks

70. If privacy is your main concern in acquiring Bitcoin, which method is arguably the most private?
a. Mining it
b. Buying it
c. Earning it

a. Mining it

71. Who may propose changes to Bitcoin?
a. Anybody
b. Bitcoin exchanges
c. The BDFL (Benevolent Dictator For Life)

a. Anybody

PRDV151: Bitcoin for Everybody Answers

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