Cryptocurrencies and Proof-of-Work
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Questions and Answers

What is the primary method of exchanging cryptocurrencies?

  • By governmental institutions
  • Through banking institutions
  • Over the Internet (correct)
  • Via physical transactions

What do proof-of-work cryptocurrencies like Bitcoin offer to miners?

  • Stock options
  • Block rewards incentives (correct)
  • Cryptocurrency exchanges
  • Financial loans

How does the reward system in cryptocurrencies impact the supply of the cryptocurrency?

  • Decreases it
  • Stabilizes it
  • Increases it (correct)
  • Has no effect on it

Why is verifying transactions in cryptocurrencies made a costly business?

<p>To preserve the integrity of the network (D)</p> Signup and view all the answers

What supports the reward scheme incentivizing miners to engage in costly mining activities?

<p>Current value of the cryptocurrency (C)</p> Signup and view all the answers

What is the main source of inefficiency in Bitcoin's design in 2018?

<p>Large mining cost (D)</p> Signup and view all the answers

How much was the median transaction fee for Ether in February 2023?

<p>$2.2845 (B)</p> Signup and view all the answers

What is one way to improve the efficiency of the Bitcoin system mentioned in the text?

<p>Optimizing coin creation rate (B)</p> Signup and view all the answers

What role do cryptocurrency exchanges play in the market?

<p>Allowing trading between different assets (C)</p> Signup and view all the answers

What is the purpose of Atomic Swaps in the cryptocurrency world?

<p>Exchanging cryptocurrencies without third-party intervention (B)</p> Signup and view all the answers

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