Unit 5: Alternative Coins and Smart Contracts - Practice Quiz

1 What is an altcoin?

2 Why are many cryptocurrencies described as altcoins?

3 What is the main purpose of a blockchain consensus mechanism?

4 What generally happens to mining difficulty when blocks are produced too quickly?

5 What is the primary goal of a difficulty retargeting algorithm?

6 Which issue is commonly identified as a limitation of Bitcoin?

7 What is the Bitcoin Lightning Network designed to support?

8 Why are extended protocols built on top of Bitcoin?

9 How have many early altcoins been created?

10 Which feature may differ between an altcoin and Bitcoin?

11 What is an Initial Coin Offering primarily used for?

12 What do participants commonly receive during an ICO?

13 Who is widely credited with introducing the term smart contract in the 1990s?

14 What is a smart contract?

15 Where does a blockchain smart contract normally execute?

16 What does a Ricardian contract connect?

17 What is the main purpose of a smart contract template?

18 What is the role of an oracle in a smart contract system?

19 How is a smart contract commonly deployed to a blockchain?

20 What major event followed the 2016 attack on The DAO?

21 A project issues a digital asset that pays transaction fees on its own independent blockchain. How should this asset generally be classified?

22 Why does proof of work reduce the effectiveness of a Sybil attack in a permissionless blockchain?

23 A blockchain expected a mining period to take 14 days, but it took only 7 days. Using , what change should occur?

24 During one retargeting period, blocks are produced much more slowly than intended. Which adjustment best restores the desired block interval?

25 A supply-chain application needs to preserve large documents while proving that they existed at a certain time. Which design best addresses Bitcoin's storage and scalability limitations?

26 Two users want to exchange many small Bitcoin payments while placing only opening and closing transactions on the base blockchain. Which protocol is most suitable?

27 Developers create an altcoin by forking Bitcoin and distributing coins to existing Bitcoin holders. What feature most directly prevents a transaction signed on one chain from being copied to the other?

28 An ICO advertises its token as a utility token, but a buyer expects ownership rights and a share of project profits. What should the buyer verify first?

29 An ICO has a soft cap of million and a hard cap of million. If it raises only million by the deadline, what outcome is normally expected when the published rules require the soft cap?

30 A researcher compares blockchain programs with vending machines that automatically enforce transaction rules. Whose early work is most closely associated with this smart contract analogy?

31 A contract transfers tokens when an on-chain account balance exceeds a threshold. Why can blockchain validators execute this contract consistently?

32 A digital agreement contains human-readable legal prose, machine-readable fields, and a cryptographic identifier linking both representations. What type of agreement is this?

33 An insurer wants to create many policies with identical logic but different customers, premiums, and coverage limits. Why would a smart contract template be useful?

34 A crop-insurance smart contract must pay farmers when rainfall falls below a specified level. Why is an oracle required?

35 A lending contract uses the median price reported by seven independent oracles instead of trusting one provider. What risk is this design primarily intended to reduce?

36 A deployment transaction runs out of gas while creating an Ethereum smart contract. What is the expected result?

37 A team expects to replace contract logic after deployment while preserving user balances at a stable address. Which architecture best supports this requirement?

38 In The DAO attack, repeated withdrawals were possible before the contract finalized the attacker's balance update. Which vulnerability enabled this behavior?

39 What was a major blockchain governance consequence of The DAO incident in 2016?

40 A protocol represents ownership of an external asset by attaching an agreed meaning to particular Bitcoin transaction outputs. What happens if the underlying output is invalidated by a Bitcoin reorganization?

41 A project copies Bitcoin's source code, changes its consensus parameters, creates a new genesis block, and starts with an empty ledger. Which classification is most precise?

42 In a simplified proof-of-work model, an attacker controls fraction of the hash rate and honest miners control . If the attacker is six blocks behind, what is the probability that the attacker will ever catch up, assuming independent block discoveries and ?

43 A Bitcoin-like chain targets 2016 blocks in 14 days. A period finishes in 10 days, and the retarget is not limited by a clamp. Immediately afterward, hash rate doubles relative to the period average. What target change and initial expected block interval follow?

44 An altcoin retargets after every block using only the previous block's reported timestamp and the desired interval, with no averaging or median filter. What is the most important resulting weakness?

45 A developer models a global counter as one Bitcoin UTXO. Every increment transaction spends that UTXO and creates a replacement containing the new counter value. What limitation appears when many users increment concurrently?

46 An overlay protocol interprets selected satoshis as representing external assets, but ordinary Bitcoin nodes do not understand that interpretation. Which statement correctly describes its security boundary?

47 Two chains split while sharing the same transaction format, signature algorithm, and pre-split UTXO set. Changing only network magic bytes and address prefixes does not stop transaction replay. Which modification directly provides robust replay protection?

48 An altcoin node calculates each block reward using the node's local wall-clock time rather than block height or consensus-constrained header data. What is the best redesign?

49 An ICO distributes 1000 tokens proportionally to credited contributions. Alice contributes 4 ETH during a 25% bonus period, while Bob contributes 6 ETH without a bonus. Ignoring rounding, what allocation is correct?

50 A commit-reveal token sale is intended to prevent observers from copying bids and replaying commitments into another sale. Which commitment construction best addresses both threats?

51 Which chronology correctly orders major developments relevant to smart contracts?

52 A decentralized smart contract must decide whether a physical shipment arrived, but the blockchain receives no trusted external report. Why can deterministic contract code not resolve the fact by itself?

53 Parties sign transactions referring to the cryptographic hash of a Ricardian contract. The human-readable legal prose is later changed while the machine-readable parameters remain unchanged. What follows?

54 A financial institution wants reusable smart contract templates that remain analyzable after users choose commercial terms. Which template design best preserves that property?

55 A contract takes the median of seven oracle reports, at most two of which are Byzantine. If every honest report lies in , what is the strongest unconditional guarantee about the selected median?

56 Under the EVM's CREATE2 rule, which change necessarily changes the prospective deployment address, assuming the deployer and salt remain fixed?

57 An upgradeable proxy executes implementation code with delegatecall. Version 2 reorders state variables relative to Version 1. Why can the upgrade corrupt state even when Version 2's standalone tests pass?

58 In the vulnerable DAO withdrawal pattern, Ether was sent through an external call before the caller's internal balance was reduced. Which execution sequence enabled repeated withdrawals?

59 Which statement most accurately describes the 2016 response to The DAO exploit and the resulting Ethereum/Ethereum Classic split?

60 A signed price report validly produced for one oracle contract is replayed months later into another contract on a different chain. Which design most directly prevents both cross-domain and stale-report acceptance?