Unit 4: Bitcoin Network, Payments, Clients and APIs - Practice Quiz

1 What is the primary purpose of the Bitcoin peer-to-peer network?

2 What does a Bitcoin full node independently verify?

3 What does a Bitcoin wallet primarily manage?

4 Which wallet information should be kept secret?

5 What information does a payer commonly need to send a Bitcoin payment?

6 What does a Bitcoin transaction confirmation indicate?

7 What is Segregated Witness, commonly called SegWit?

8 Which Bitcoin feature enables conditions to be attached to spending?

9 What is the main goal of the Lightning Network?

10 What does a multisignature Bitcoin arrangement require?

11 Which risk is commonly associated with investing in bitcoin?

12 What is diversification in an investment portfolio?

13 What service commonly matches buyers and sellers of bitcoin?

14 What does a market order generally do on a Bitcoin exchange?

15 Which software is a widely used full-node implementation of Bitcoin?

16 What may Bitcoin Core initially download when configured as a full node?

17 What is bitcoin-cli mainly used for?

18 Which bitcoin-cli command returns general blockchain status information?

19 Which interface lets programs send structured commands to Bitcoin Core?

20 What is a Bitcoin transaction ID, often written as TXID?

21 A Bitcoin node receives two valid competing blocks at the same height. One branch later receives another valid block. Which rule determines the branch the node should follow?

22 A transaction is valid under Bitcoin's consensus rules, but its fee rate is below a node's minimum relay fee. What will that node most likely do?

23 A user backs up the seed phrase of a hierarchical deterministic wallet before generating 50 additional receiving addresses. Assuming no extra passphrase is used, what can the backup restore?

24 A company wants an internet-connected system to monitor funds and prepare payments without storing private keys online. Which design best meets this requirement?

25 A wallet selects UTXOs worth BTC and BTC. It sends BTC and pays a fee of BTC. What change output should it create?

26 A merchant delivers an expensive product immediately after seeing an unconfirmed Bitcoin transaction. Which risk is most directly increased?

27 Why was Segregated Witness important for protocols that depend on referencing an unconfirmed parent transaction?

28 A Taproot output contains several alternative spending conditions, but only one condition is used. What is a key on-chain benefit of its script-tree design?

29 Three directors control a Bitcoin treasury using a 2-of-3 multisignature policy. Which statement correctly describes the spending condition?

30 In a cross-chain atomic swap, why are hashlocks commonly combined with timelocks?

31 An investor buys the same fiat value of Bitcoin every month regardless of price. What is the most accurate effect of this strategy?

32 An investor moves Bitcoin from a custodial exchange to a properly initialized hardware wallet. Which risk trade-off has most directly changed?

33 Bitcoin trades at $31,000, but a buyer submits a limit buy order at $30,000. What should the buyer expect?

34 An exchange quotes a bid of $42,000 and an ask of $42,400 for one bitcoin. Ignoring fees, which price applies to a customer making an immediate purchase?

35 Before installing a downloaded Bitcoin client, which procedure provides the strongest evidence that the file is both authentic and unchanged?

36 A user enables pruning in Bitcoin Core because disk space is limited. Which outcome should the user expect?

37 The output of bitcoin-cli getblockchaininfo reports headers: 850000 and blocks: 849997. What is the most reasonable interpretation?

38 Which command sequence should be used to retrieve a decoded, verbose block at height 700000?

39 A payment application must calculate transaction outputs and fees precisely. Which internal representation is safest for monetary values?

40 A merchant's web application receives a transaction ID from a customer's browser. What should the application do before marking the invoice as securely paid?

41 A Bitcoin node receives two valid competing chain tips. Chain A has height 850,100 and cumulative chainwork . Chain B has height 850,098 and cumulative chainwork . Assuming neither chain violates consensus rules, which tip will the node select?

42 While processing a BIP152 compact block, a node reconstructs every transaction except three whose short IDs are ambiguous or absent from its mempool. What is the normal recovery procedure?

43 A watch-only wallet imports the descriptor wpkh([d34db33f/84h/0h/0h]xpub.../0/*). What can it do without access to the corresponding private keys?

44 An HD wallet is restored from its seed, but an address at receive index 5,000 was used after a long sequence of unused addresses. A standard discovery scan stops before reaching it. Which remedy addresses the actual problem?

45 A merchant receives an unconfirmed payment that signals replaceability. The merchant controls the payment output and can create a high-fee child transaction. Which statement best characterizes the merchant's security?

46 A finalized payment transaction has weight 721 WU, spends inputs totaling 150,000 sat, and pays the recipient 100,000 sat. At exactly 25 sat/vB, with no other deductions or dust issue, what change output is required?

47 For a transaction whose inputs are all native SegWit inputs, what happens if a third party modifies only witness serialization without invalidating the transaction?

48 A Taproot output commits to one key-path spend and several script leaves. If one script-path leaf is exercised, what is revealed on-chain?

49 In a cross-chain atomic swap, Alice chooses secret and first locks coins on Chain A. Bob then locks coins on Chain B using the same hashlock. Which timelock and redemption arrangement protects both parties?

50 In a penalty-based Lightning channel, a dishonest peer broadcasts a revoked commitment transaction while the honest peer is offline. What must a watchtower do?

51 An investment gains 50% in year one and loses 50% in year two. Ignoring fees and taxes, what happens to an initial investment of $100,000?

52 A portfolio begins with $60 in Bitcoin and $40 in cash. Bitcoin then falls 40% while cash is unchanged. To restore the original 60/40 allocation without adding funds, what trade is required?

53 An exchange order book has asks of 0.3 BTC at $60,000, 0.4 BTC at $60,200, and 0.5 BTC at $60,500. Ignoring fees, what is the volume-weighted average execution price of a 0.8 BTC market buy?

54 The best ask is $60,100. A trader submits a post-only limit buy for 2 BTC at $60,000. What is the most accurate expected behavior?

55 Which procedure provides the strongest practical verification of a downloaded Bitcoin Core release before installation?

56 Which statement accurately describes a Bitcoin Core node operating with block pruning enabled?

57 A confirmed transaction is absent from the mempool, and the node was started without -txindex. Its containing block is known and still stored locally. Which RPC can retrieve the decoded transaction?

58 Several wallets must independently sign the same funded multisignature PSBT. Which command sequence correctly combines and broadcasts the result?

59 Under legacy or SegWit v0 signature hashing, what does SIGHASH_SINGLE | SIGHASH_ANYONECANPAY primarily allow when the signed input has a corresponding output index?

60 A native P2WSH output commits to a 2-of-3 CHECKMULTISIG witness script. Which witness-stack structure correctly spends it with two valid signatures?