Browse [LATEST] Bitcoin Interview Question and Answers
Last updated on 14th Nov 2021, Blog, Interview Questions
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Looking for the top bitcoin interview questions to prepare for your interview. Go through some of the best bitcoin interview questions with detailed answers before you get ahead. Bitcoin is the first cryptocurrency that arrived in the market with promising implications of blockchain as its underlying technology. Over the years, it has served as the foundation for the development of many other cryptocurrency alternatives. Therefore, enterprise blockchain professionals need to encounter interview questions on Bitcoin for different enterprise blockchain job roles. The following discussion offers an overview of different categories of interview questions related to Bitcoin to help aspiring enterprise blockchain professionals.
1. What Are The Advantages and disadvantageOf Bitcoin?
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| Payment freedom: It is possible to send and receive any amount of money instantly anywhere in the world at any time. No bank holidays. No borders. No imposed limits. Bitcoin allows its users to be in full control of their money. | Ongoing development: Bitcoin software is still in beta with many incomplete features in active development. New tools, features, and services are being developed to make Bitcoin more secure and accessible to the masses. Some of these are still not ready for everyone. Most Bitcoin businesses are new and still offer no insurance. In general, Bitcoin is still in the process of maturing. |
| Very low fees: Bitcoin payments are currently processed with either no fees or extremely small fees. Users may include fees with transactions to receive priority processing, which results in faster confirmation of transactions by the network. Additionally, merchant processors exist to assist merchants in processing transactions, converting bitcoins to fiat currency and depositing funds directly into merchants’ bank accounts daily. As these services are based on Bitcoin, they can be offered for much lower fees than with PayPal or credit card networks. | Volatility: The total value of bitcoins in circulation and the number of businesses using Bitcoin are still very small compared to what they could be. Therefore, relatively small events, trades, or business activities can significantly affect the price. In theory, this volatility will decrease as Bitcoin markets, the technology matures and Bitcoin interest rates normalize. Never before has the world seen a start-up currency, so it is truly difficult (and exciting) to imagine how it will play out. |
| Fewer risks for merchants: Bitcoin transactions are secure, irreversible, and do not contain customers’ sensitive or personal information. This protects merchants from losses caused by fraud or fraudulent chargebacks, and there is no need for PCI compliance. Merchants can easily expand to new markets where either credit cards are not available or fraud rates are unacceptably high. The net results are lower fees, larger markets, and fewer administrative costs. | Degree of acceptance: Many people are still unaware of Bitcoin. Every day, more businesses accept bitcoins because they want the advantages of doing so, but the list remains small and still needs to grow in order to benefit from network effects. |
2. What is a ledger? Is Blockchain an incorruptible ledger?
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Blockchain is considered incorruptible. Any ill-intentioned individual acting alone is powerless. “To take over the network, an attacker would have to control more than 50 percent of its total computing power,” Augier explains. “We hope that’s a theoretical scenario, but we can’t be sure. Should it happen, the individual would take every precaution to avoid being noticed.” Not to mention the energy required to power the computers needed for the blockchain system to work.
3. What type of records can be kept in a Blockchain? Is there any restriction on same?
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There is no restriction on keeping records of any type in the Blockchain approach. Industries are using Blockchain for securing all types of records.
4. Is bitcoin safe to buy?
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First things first: The money you put into Bitcoin is not safe from value fluctuations. Bitcoin is a volatile investment. If you’re looking for a “safe” investment with guaranteed returns, then don’t invest in Bitcoin — or any cryptocurrencies for that matter.
5. How much is the cheapest bitcoin?
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Bitcoin first started trading from around $0.0008 to $0.08 per coin in July 2010.
6. Explain the significance of blind signature and how it is useful?
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It is a form of digital signature in which the content of a message is disguised (blinded) before it is signed. The resulting blind signature can be publicly verified against the original, unblinded message in the manner of a regular digital signature.
7. Can you explain what are off-chain transactions?
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An off-chain transaction is the movement of value outside of the blockchain. While an on-chain transaction – usually referred to as simply ‘a transaction’ – modifies the blockchain and depends on the blockchain to determine its validity an off-chain transaction relies on other methods to record and validate the transaction.
8. How does the bitcoin blockchain work?
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9. Can you get scammed on Bitcoin?
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According to the Federal Trade Commission, since October 2020, almost 7,000 people have reported losses totaling more than $80 million in the U.S. alone. Most Bitcoin scams aren’t quite as devastating as Sebastian’s, though. The FTC’s report reveals median losses have totaled $1,900.
10. How can you purchase and sell Bitcoin?
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| You can purchase Bitcoin from different sources. It is possible to purchase Bitcoin online by using credit cards or e-wallets such as PayPal. | You can sell Bitcoin in different types of ways, such as selling online to an exchange or other people living nearby. |
| Users can also purchase Bitcoin with the help of Bitcoin Teller Machines and LocalBitcoins. | It is possible to sell Bitcoin in the same way as you purchase it. |
| Furthermore, you can also find many verified online exchanges for selling and purchasing Bitcoins. | n addition, you should also note that Bitcoin prices fluctuate according to demand and supply. Furthermore, you can also use Bitcoin ATMs for selling Bitcoins |
11. How can I sell Bitcoins for cash?
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A common way to move Bitcoin into cash is through withdrawing the cash to a bank account via a wire transfer or automated clearing house (ACH) transfer after selling your BTC on a crypto exchange.
12. What is the minimum amount to invest in Bitcoin?
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Coinbase has a minimum spend of $2 and the minimum deposit depends on how you transfer money.
13. How many Bitcoins are left?
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There are only 21 million bitcoins that can be mined in total. Bitcoin will never reach that cap due to the use of rounding operators in its codebase.
14. How long does it take to mine 1 bitcoin?
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With each bitcoin block taking 10 minutes to mine, 144 blocks are mined each day. This means that at the current rate following the latest bitcoin halving, 900 BTC is available in rewards every day.
15. How much is bitcoin worth in Nowadays?
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The group, made up of crypto analysts, researchers and entrepreneurs, returned an average bitcoin price prediction of $80,021 before ending the year at $71,415. By the end of 2025 and 2030, panelists expect the bitcoin price to skyrocket to an average of $249,578 and $5.2 million respectively.
16. Is bitcoin going away?
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“Cryptocurrencies like bitcoin have proven themselves useful for money movement and speculation, and they’re unlikely to go away.
17. Is bitcoin controlled by China?
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“Bitcoin is really controlled by China. There are four miners in China that control over 50% in bitcoin. … (TWTR) CEO Jack Dorsey told London’s Sunday Times in March that bitcoin could become the world’s single global currency in ten years.
18. Why is Bitcoin so expensive?
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The supply of Bitcoin and the market’s demand for it. The cost of producing bitcoin through the mining process. The rewards issued to Bitcoin miners for verifying transactions to the blockchain. The number of competing cryptocurrencies.
19. Is Bitcoin a good investment in current days?
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Bitcoin is the best performing asset on the planet It is now up 60% Following MicroStrategy’s lead, payment platform Square announced that it had invested $50 million in Bitcoin, buying a total of 4,709 Bitcoins. Square said the investment represents about 1 percent of its total assets.
20. Explain the architecture and integration between the data of bitcoin core?
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21. Is Bitcoin real or fake?
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A cryptocurrency is real money that can be used for payments. Cryptocurrencies such as bitcoin and Ethereum were designed as a way to make payments without relying on traditional modes such as currency notes, debit cards, credit cards or checks.
22. What is Bitcoin short answer?
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Bitcoin (₿) is a digital and global money system cryptocurrency. It allows people to send or receive money across the internet, even to someone they don’t know or don’t trust. It is the first of its kind technology that allows the transfer of digital scarcity across the internet without needing a third party.
23. Can you make real money from bitcoin?
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All you do is send them your Bitcoins, and they send you a monthly income or an increase in the equity of your cryptocurrency account with the exchange. These lenders then use your crypto to trade the markets, banking the profits they make with your capital after paying you your interest.
24. What is the difference between Blockchain and Banking Ledgers?
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| Blockchain is very similar to ledgers with a striking difference. It is open to all and every single individual can operate with their own set of perceptions and practice accordingly. | Financial institutions involved in dealing with daily transactions use ledgers to record and timestamp them. |
| Blockchain can be customized as per the will of the programmers and doesn’t need any regulations. | Bitcoin isn’t being regulated by the government. authorities because it covers an end number of Central Bank Jurisdictions. |
25. Can I get rich with bitcoin?
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A visual representation of digital currencies. Even though it’s a highly volatile asset, cryptocurrency can help investors build wealth, especially if they invest in digital coins over the long-term.
26. Which bitcoin exchange is safest?
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Coinbase
Various crypto exchanges come with different measures, but Coinbase seems to offer the most security with all assets held in its hot storage and insured and a 98% user fund in cold storage.
27. When was Bitcoin worth $1?
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Bitcoin first crossed the $1.00 threshold in February 2011, just over a decade ago. The first major surge in Bitcoin popularity occurred in 2013, with prices spiking as high as $1,242 in November of that year before retreating.
28. Is crypto a good investment?
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Investing in crypto assets is risky but also potentially extremely profitable. Cryptocurrency is a good investment if you want to gain direct exposure to the demand for digital currency, while a safer but potentially less lucrative alternative is to buy the stocks of companies with exposure to cryptocurrency.
29. Why is Bitcoin not the future?
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Another reason why Bitcoin probably isn’t the future of finance involves its volatility. In a stable, reliable economic structure, there’s little room for volatility. All likely to roll out digital currencies in the very near future, the idea of Bitcoin and CBDCs coexisting in harmony is a highly delusional one.
30. Explain the bitcoin financial system?
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31. Why are Bitcoin prices falling?
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China’s crackdown and other various factors are responsible for falling in prices of Bitcoin.Top coins such as Ethereum (ETH) and popular meme coins such as Shiba Inu (SHIB) and Dogecoin (DOGE) have fallen over 10 per cent over the last seven weeks.
32. Why is bitcoin banned in China?
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China cracks down on crypto mining, as mining activities start to threaten the country’s environmental goals. The government bans financial institutions and payment companies from providing crypto-related services.
33. What is the difference between public and private keys?
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| In the blockchain, public keys are required for identification and private keys are used for encryption and authentication purposes. | The sender can send a message using the public key of the receiver and the receiver can decrypt the message or the transaction using a private key. By using both keys, communication or transaction is kept safe and tamper-proof. |
34. What country has the most bitcoin?
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The United States has overtaken China to lead the world with the largest share in global bitcoin mining networks, according to data from the University of Cambridge, published on Wednesday.
35. Why is China cracking down on bitcoin?
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On Sept. 24, China announced a blanket prohibition on all cryptocurrency transactions and mining. Citing concern for national security and “safety of people’s assets,” 10 government agencies announced the crackdown in an effort to clamp down on illicit activities and financial speculation
36. How does Bitcoin make money?
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New bitcoins are generated by a competitive and decentralized process called “mining”. This process involves individuals being rewarded by the network for their services. Bitcoin miners are processing transactions and securing the network using specialized hardware and are collecting new bitcoins in exchange.
37. Are Bitcoins legal?
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Because Bitcoin is perfectly legal in Canada, anyone can purchase it. The government even has an official page devoted to digital currencies. … Canadians may also buy and sell cryptocurrency on open digital exchanges similar to a traditional stock market.
38. How do I turn cryptocurrency into cash?
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Through cryptocurrency exchanges You deposit your cryptocurrency into an exchange such as WazirX, CoinDCX, CoinSwitch Kuber, Unocoin , and request a withdrawal in the currency of your choice. The withdrawal will be paid into your bank account.
39. Do banks accept bitcoin?
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The banks which accept bitcoin are slowly increasing. The banks that have declared bitcoin a “no-go” represent 69.2 percent of the American credit card market. While this represents an overwhelming front of opposition, there are still options available for those who wish to use credit cards for bitcoin purchasing.
40. Explain the architectural assessment of bitcoin?
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41. How Safe Is Bitcoin?
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While Bitcoin technology is pretty safe, there are some risks to consider before you make an investment. Bitcoin isn’t anonymous, the price of cryptocurrencies can be extremely volatile, Bitcoin relies on passwords, and cryptocurrency wallets are not immune to theft.
42. What is the difference between Proof-of-Stake and Proof-of-Work?
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| Proof-of-Stake makes the consensus mechanism completely virtual. In this, a set of nodes decide to stake their cryptocurrencies of the transaction validation. | Proof-of-Work is the original Consensus algorithm in the blockchain. It is used for confirming transactions and producing new blocks to the chain. In this miners compete with each other to complete the transactions on the network and get rewarded. |
43. Who owns the most bitcoin?
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Microstrategy Microstrategy, led by Michael Saylor, holds more bitcoin than any other public company. Microstrategy has acquired more than 105,000 BTC, which represents roughly 0.5% of the total supply.
44.How do I buy Bitcoin?
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Choose an Exchange Bitcoin can’t be purchased through your bank or investing firm yet — though some organizations are working toward that possibility in the future. For now, you’ll have to go through a cryptocurrency trading platform to exchange your U.S. dollars for Bitcoin or other digital currencies.
45.How do Bitcoins work?
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Each Bitcoin is basically a computer file which is stored in a ‘digital wallet’ app on a smartphone or computer. People can send Bitcoins (or part of one) to your digital wallet, and you can send Bitcoins to other people. … You can buy Bitcoins using ‘real’ money. You can sell things and let people pay you with Bitcoins.
46. How many Cryptocurrencies have failed?
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Hence, we have so many of these tokens or digital assets now. 3) Could they fail? Absolutely. In fact, according to an article in ColumbiaPacific is estimated that nearly 2,000 cryptocurrencies have failed, many of them during the initial boom.
47. Is it too late to buy Bitcoin?
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It is never too late to get into Bitcoin, just like it is never too late to get into gold, says Anton Altement, chief executive of Polybius and OSOM Finance. “Both assets are perceived as a reliable store of value and it’s likely to stay that way for the foreseeable future.”
48. Will the US ban Bitcoin?
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Federal Reserve Chairman Jerome Powell has confirmed that the U.S. has no plans to ban Bitcoin and cryptocurrencies. Effectively the chairman said that the Fed’s hands are tied when it comes to inflation and that relief will come. Powell suggested inflation should go down in “the first half of next year.”
49. What did China do to Bitcoin?
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China’s central bank has announced that all transactions of crypto-currencies are illegal, effectively banning digital tokens such as Bitcoin. “Virtual currency-related business activities are illegal financial activities,” the People’s Bank of China said, warning it “seriously endangers the safety of people’s assets”.2
50. Describe the overview of bitcoin architecture?
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51. What happens if your bitcoin goes negative?
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A negative balance occurs when you buy cryptocurrency or deposit money into your Coinbase account, but Coinbase has not received successful payment from either your bank or card issuer. If it drops below what you paid, you still have your BTC, but it is priced less against what you used to buy it.
52. What countries have banned bitcoin?
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Bitcoin is essentially banned in China. All banks and other financial institutions like payment processors are prohibited from transacting or dealing in bitcoin.
53. What is the difference between a scriptPubKey and a P2SH address?
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| A scriptPubKey is found in transaction output and also known as a locking script. | The P2SH address is a special type of address, i.e., it is used for replacing complex locking scripts with its hash. In addition to the unlocking scripts, the transactions must contain the script that matches the hash. |
54. Can I mine bitcoin on my phone?
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Yes, it does work. It is possible to mine bitcoin with an android device even if you might have numerous reasons to stay away from it. Also, using a mobile phone to mine crypto coins isn’t close to the way the traditional mining software or hardware works.
55. Why do people buy Bitcoin?
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Besides mining bitcoin, which requires technical expertise and an investment in high-performance computers, most people purchase bitcoin as a form of currency speculation — betting that the market value of one bitcoin will be higher in the future than it is today.
56. What is the principle of Bitcoin?
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Each Bitcoin is basically a computer file which is stored in a ‘digital wallet’ app on a smartphone or computer. People can send Bitcoins (or part of one) to your digital wallet, and you can send Bitcoins to other people. Every single transaction is recorded in a public list called the blockchain.
57. Are Bitcoins a good investment?
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The high liquidity associated with bitcoin makes it a great investment vessel if you’re looking for short-term profit. Digital currencies may also be a long-term investment due to their high market demand. Lower inflation risk.
58. Why is Bitcoin a bad investment?
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That’s because crypto investments can be much more dangerous than many other kinds of investments for a few key reasons: The cryptocurrency market is extremely volatile. There are huge swings in digital currency prices from one day to the next. … There’s a lack of regulation in the crypto market.
59. Are banks worried about bitcoin?
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The Bank of England has issued a statement saying cryptocurrency assets could post a systematic risk to the global financial system. Data shows that 95% of them, including bitcoin, are unbacked by any asset or fiat currency.
60. Explain the architecture of bitcoin transaction?
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61. Why do governments hate Bitcoins?
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In its current form, Bitcoin presents three challenges to government authority: it cannot be regulated, it is used by criminals, and it can help citizens circumvent capital controls. Until the time that Bitcoin’s ecosystem matures, it will continue to be viewed with distrust by established authorities.
62. Can Bitcoin be hacked?
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Bitcoin is a decentralized digital currency that uses cryptography to secure transactions. … Blockchain technology and users’ constant review of the system have made it difficult to hack bitcoins. Hackers can steal bitcoins by gaining access to bitcoin owners’ digital wallets.
63. Are Bitcoins safe?
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The Bitcoin blockchain is public. While the words transparency and public do not sound safe, in the case of Bitcoin it is. Despite the anonymity of the user, all transactions on the network are accessible to the public, making it difficult to hack or cheat the system. It is decentralised.
64. How is a hard fork different from a soft fork in blockchain?
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| A hard fork in blockchain refers to a radical change to the software protocol that makes previously invalid transactions/blocks valid. It requires all the users/nodes to upgrade to the latest software protocol. | Soft fork refers to a change to the software protocol that makes previously invalid transactions/blocks invalid. |
65. Is it a good time to buy Bitcoin right now?
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Johnson also says that “it’s a good environment for digital assets” right now because bitcoin supporters see it as a store of value and a hedge against growing concern over inflation. He argues that as the price increases, bitcoin becomes more valuable, making now a good time to buy in despite the high price.
66. Is it worth buying small amounts of Bitcoin?
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If you’re investing in cryptocurrencies for the first time, buying a small amount of Bitcoin is an excellent way to start. Make sure you don’t spend money you can’t afford to lose, as even Bitcoin is still a relatively untested investment and there are still many things we don’t know about how the market will develop.
67. What is 51% attack?
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51% Attack refers to a situation where a group of miners who hold more than 50% of the Network Hash Rate could manipulate with the New transactions (Stopping the transactions to proceed or gaining conformations) or able to reverse the transactions that were recently confirmed and kind of doing Double spend. It is Highly unlikely to be able to do that today but it is possible.
68. What is digital cash?
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Digital Cash acts much like real cash, except that it’s not on paper. Money in your bank account is converted to a digital code. This digital code may then be stored on a microchip, a pocket card (like a smart card), or on the hard drive of your computer. The concept of privacy is the driving force behind digital cash.
69. How many Cryptocurrency are there?
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One reason for this is the fact that there are more than 10,000 cryptocurrencies in existence as of November 2021.1 While many of these cryptos have little to no following or trading volume, some enjoy immense popularity among dedicated communities of backers and investors.
70. Describe the Cryptocurrency architecture of bitcoin?
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71. Is Bitcoin a bank?
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Bitcoin is a cryptocurrency created in 2009. Bitcoin is a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto. Transactions are made with no middle men – meaning, no banks!
72. Why is Bitcoin worth anything at all?
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The main source of value for Bitcoin, then, is the economics of its supply and demand. The argument for Bitcoin’s value is similar to the one for gold—a commodity that shares characteristics with the cryptocurrency. The cryptocurrency is limited to a quantity of 21 million. Its value is a function of this scarcity.
73. How can I buy Bitcoins with cash?
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One way you can buy Bitcoin with cash is peer-to-peer meaning, you can find someone locally to buy from in-person. This requires a bit more work than most people would enjoy. The other more convenient and less invasive way is to buy Bitcoin with cash at a Bitcoin ATM.
74. Is bitcoin a legal currency?
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Bitcoin can now be used as a legal tender for any business that can support and process transactions with it, months after the Latin American country’s congress approved the move.
75. Can you be taxed on bitcoin?
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You’re required to pay taxes on crypto. The IRS classifies cryptocurrency as property, and cryptocurrency transactions are taxable by law just like transactions related to any other property. Taxes are due when you sell, trade, or dispose of cryptocurrency in any way and recognize a gain.
76. What is the difference between off-chain transactions and on-chain transactions?
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| Off-chain transactions: These transactions deal with the values outside the blockchain and can be carried out using various methods. | On-chain transactions: These transactions are available on the blockchain and are visible to all the nodes on the blockchain network. It includes authentication and validation of a transaction by a defined number of participants. |
77. Do you need an ID to buy bitcoin?
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Buyers and sellers create offers and must agree on a price and terms of a trade before a transaction can be made. It’s possible to buy bitcoins with no ID on LocalBitcoins either by buying bitcoins with cash deposit or meeting in person and trading cash.
78. Can I buy Bitcoin without a wallet?
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You don’t need your own crypto wallet for Bitcoin, but it could make sense in some circumstances. You can leave it in the same place you buy it — for example, if you buy your Bitcoin through Cash App, you can hold it in your Cash App account as long as you want.
79. Where should I keep my bitcoin?
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Just the way we keep cash or cards in a physical wallet, bitcoins are also stored in a wallet—a digital wallet. The digital wallet can be hardware-based or web-based. The wallet can also reside on a mobile device, on a computer desktop, or kept safe by printing the private keys and addresses used for access on paper.
80. Describe the structure of transactions in the bitcoin blockchain?
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81. Do you need a Bitcoin wallet?
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Yes. While many exchanges provide or suggest crypto wallets for your use, in order to buy or trade Bitcoin or other cryptocurrencies you need to have a wallet address so that the digital currency can be transferred to your control.18-Aug-2021
82. What is Bitcoin?
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A bitcoin is a type of digital currency which can be bought, sold, and transferred between the two parties securely over the internet. It cannot be touched and seen, but it can be traded electronically. We can store it in our mobiles, computers or any other storage media as a virtual currency. Bitcoin can store values much like fine gold, silver, and some other types of investments. It can be used to buy products and services as well as make payments and exchange values electronically. It is the most popular cryptocurrency in the world.
83. There are different approaches used in attacking the RSA algorithm:
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| It involves all possible secret keys | In mathematical attack, we are using different techniques, which is similar in effort to factor the product of two primes |
84. What do you mean by Bitcoin Mining?
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Bitcoin mining is performed by bitcoin miners(a group of people). The procedure of bitcoin mining is done by specialized computers equipped for solving logarithmic equations. Miners achieve bitcoin mining by solving a computational problem which makes the chain of blocks of transactions. These specialized computers help miners to authenticate the block of transaction held within each bitcoin network. Whenever a new block is added into the blockchain, immediately miners get rewards for this new block. The miners get rewards in bitcoin along with transaction fees.
85. Who developed Bitcoin?
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Bitcoin was invented by an unknown person Satoshi Nakamoto in the year 2008. But there is no valid proof for this because the person behind bitcoin has never given an interview. It was released as open-source software in 2009. It was the first successful virtual currency designed with faith and equivalent to authorized currency of centralized government. It is a digital currency that uses rules of cryptography for regulation and generation of units of currency. It is commonly called decentralized digital currency.
86. Who governs Bitcoin?
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Bitcoin is not a company, so no one can govern the Bitcoin. Bitcoin is decentralized digital money that is issued and managed without any centralized authority. It is created as a reward in a competition in which miners who own the specialized computer offer their computing power to verify and generate new Bitcoins. They are also responsible for maintaining the security of the network into the blockchain. The activity of creating bitcoin is known as mining, and every successful miner gets a reward with newly created bitcoins and transaction fees.
87. What is a Bitcoin wallet?
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A Bitcoin wallet(digital wallet) is a software program where Bitcoins are stored. Technically, a Bitcoin wallet stores a private key(secret number) for every Bitcoin address. The owner of the wallet can send, receive, and exchange bitcoins. The Bitcoin wallet is of many forms, and some of them are a desktop wallet, mobile wallet, web wallet, and hardware wallet.
88. How can you choose a Bitcoin wallet?
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There are two initial steps to finding a Bitcoin wallet given below:
Decide what sort of crypto wallet you need
Consider specific wallets to find the best one for you.
89. What is a Bitcoin address?
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A bitcoin address is a unique identifier which consists of 26-35 alphanumeric characters. The identifier begins with the number 1 or 3, which represents a location where the cryptocurrencies can be sent. The bitcoin user can generate a bitcoin address without any cost. However, the bitcoin address is not permanent, that means it may change for every new transaction.
90. How does blockchain work?
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91. Is Bitcoin Anonymous?
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No, bitcoin is not completely anonymous; instead, it is pseudonymous, i.e. every identity is tied with the fake name. It is because each user has a public address, and whenever financial transactions occur, the fraudsters will survive to trace those addresses.
92. How do you calculate alpha?
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- Alpha = Actual Rate of Return – Expected Rate of Return.
- Expected Rate of Return = Risk-Free Rate + β * Market Risk Premium.
- Alpha = Actual Rate of Return – Risk-Free Rate – β * Market Risk Premium.
93. Who sets the Bitcoin price?
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The price of bitcoin is determined by the market in which it trades. It is determined by how much someone is willing to pay for that bitcoin. The market sets the price of bitcoin as the same as Gold, Oil, Sugar, Grains, etc. is determined. Bitcoin, like any other market, is subject to the rules of supply and demand.
More Demand, Less Supply = Price Goes Up
More Supply, Less Demand = Price Goes Down