BTC Study Test Questions & Answers 2024/2025
sha256 properties - ANSWERS1. the output is deterministic: you always get the same output for the same input
2. The output is unpredictable:changing just one letter or adding a space ton the input string will drastically change the output, so much ...
sha256 properties - ANSWERS1. the output is deterministic: you always get the same output for the
same input
2. The output is unpredictable:changing just one letter or adding a space ton the input string will
drastically change the output, so much so that you cannot find any correlation to the original input
3. It is quick to compute the hash for any size of input data
4. It is basically impossible to find two strings that hash to the same output
5. Given the output hash of sha256, it is impossible to arrive back at the input string. We call this a one-
way function
6. The output is always a specific size (256 bits for sha256)
What is a block? - ANSWERSthe combination of transactions, nonce, and the proof of work hash
What is mining? - ANSWERSThe process of p[laying the Proof of Work lottery to win access to write to
the Bitcoin ledger
How are New Bitcoins Minted? - ANSWERSThe process of mining bitcoin, which is the process of playing
the proof of work lottery and getting access rights to the ledger, is the very thing that produces Bitcoin
What happens when you find a valid block? - ANSWERSWhen you find a valid Block (by burning a large
amount of energy and finding a number that wins the lottery), you get to write any transactions you've
heard about into that Block and therefore into the ledger.
But you also get to write a very special additional transaction, called a coinbase transaction into the
ledger. This transaction basically says: "12.5 Bitcoin were minted and given to Mary the Miner to
compensate here for expending all that energy to mine this block"
The block reward - ANSWERSBitcoin is a system of distributed consensus. That means everyone has to
agree on what is valid
, What is the hash rate? - ANSWERSThe total number of hashes per second performed by all the miners of
the Bitcoin network is referred to as the hash rate
Mining difficulty adjustment - ANSWERSEvery time 2016 blocks, (2 weeks of work roughly) are produced,
we look back and figure out how long it took us to produce those blocks, and then adjust our Target
Numbers to speed up or slow down block production. This is based on the 10 minute interval
What is lowering the difficulty? - ANSWERSThe act of raising the Target Number to a higher number, thus
creating a larger space of valid hashes, giving miners a higher chance to find a wining hash
What is raising the difficulty? - ANSWERSThis refers to lowering the Target Number so fewer hashes are
valid and miners have to spend more energy finding a valid hash.
What is the expected year that all BTC will be mined? - ANSWERS2140
What are the 7 components of inventing Bitcoin? - ANSWERS1. Replaced a central bank with a
distributed ledger.
2. Instituted a lottery system to select who writes to the ledger
3. Forced lottery entrants to burn energy to buy tickets by hashing, and made it easy for everyone to
verify winning tickets by checking the hash numbers produced by players
4. Told the lottery players that if they didn't play by the rules, we'd reject their block including their
coinbase transactions, so they wouldn't get paid when they won, thus creating an economic disincentive
for cheating, and an economic incentive for playing by the rules
5. Controlled the timing and Target selection for the lottery by letting everyone calculate for themselves
what the Target should be based on hardcoded rules and the history of the pas 2016 blocks
6. Enforced the issuance schedule using difficult adjustments that adjust to increasing or decreasing hash
rate.
7. Used open source code to ensure that everyone could verify for themselves that they were enforcing
the same rules regarding transaction validity, block reward, and difficult calculation
What do block hashes include? - ANSWERS1. The transactions we want to commit to the ledger
2. A random nonce
3. The hash of the prior block that we're using as the basis of our ledger's history
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