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Quiz: Intro to Cryptocurrency

Cryptocurrency is a digital asset or currency that is powered by blockchain technology. Test your crypto knowledge with this end of course crypto quiz.

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Question 1

Cryptocurrencies are built on decentralized networks and based on blockchain technology.

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Cryptocurrencies are unique for a number of reasons. One of these reasons is that they’re decentralized. That technology that makes cryptocurrencies like Bitcoin decentralized is called blockchain technology. This is a type of database that stores transaction data on a collection of computers, rather than a single server.

Question 2

When you’re looking for good cryptocurrencies to invest in, at a minimum, you should consider the project’s...

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When identifying good crypto assets to invest in, it’s important to conduct your own research which can include looking at a crypto project’s use cases, real-world adoption, market cap, and road map at a minimum. This can mitigate risk from investing in crypto scams or rug pulls which are designed for developers to abandon a project and run away with the funds invested into it.

Question 3

All units of cryptocurrency are stored in wallets.

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Digital wallets or crypto wallets allow users to store and manage their cryptocurrencies. Crypto assets can be sent between different wallets.

Question 4

To transfer crypto from one wallet to another you’ll need

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To send crypto to another wallet, you’ll first need the public address of the recipient.

Question 5

Bitcoin is completely private and anonymous.

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There is a common misconception that coins like Bitcoin are anonymous and private. In fact, address and transaction details are accessible via the public ledger. On the other hand, privacy coins like Monero and Zcash do keep this information private.

Question 6

NFT stands for:

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NFT stands for Non-Fungible Token. They are non-fungible because they are not mutually interchangeable e.g. Tim’s NFT is not the same as Laura’s NFT.

Question 7

When categorising cryptocurrencies, Bitcoin, Litecoin and Digibyte are all types of payment coins.

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Bitcoin and other payment coins are decentralized alternatives to fiat currencies. This means they can be used to pay for goods and services at participating retailers and vendors.

Question 8

Stablecoins are...

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Stablecoins are pegged to fiat currencies like the US dollar and the Euro as well as commodities like gold and silver. As a result, they are not as volatile as other cryptocurrencies. They provide an option for individuals and institutions transfer value around the world quickly and without exorbitant fees.

Question 9

A blockchain is a national bank database.

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A blockchain is a distributed ledger that stores transaction data and is maintained by a network of computers around the world. Blockchain is the underlying technology that allows cryptocurrencies like Bitcoin and Ethereum to operate.

Question 10

How can an investor mitigate risk in his/her crypto investing approach?

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There are a number of ways to reduce the risk of volatile markets when investing in cryptocurrency. Creating a well-balanced portfolio by diversifying the assets you invest in can reduce your exposure to risk. Additionally, dollar-cost averaging (DCA) is an investing strategy that removes the emotional factor of investing and mitigates risks of badly timed trades.

Question 11

What is the safest way to store cryptocurrency?

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If you’re intending to hold your crypto asset for the long term, storing your assets in a hardware wallet like a Trezor or Ledger is the safest way to do so. Cold storage wallets are not connected to the internet, so it completely mitigates the risk of online scammers and hackers accessing your holdings. It’s important to note that you should never send your crypto assets to someone who is claiming to store them securely or offering to provide you an immediate return on investment. In most, if not all, situations these are scammers attempting to steal your crypto funds.

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