Blockchain Security Training Blockchain Wallet & Exchange Security 1 — Questions and Answers
Question 1: What is the primary security advantage of a hardware wallet over a software wallet?
- It stores private keys in an offline, tamper-resistant chip (Correct answer)
- It encrypts transactions using AES-256
- It connects to multiple blockchains simultaneously
- It automatically updates firmware to patch vulnerabilities
Correct answer: It stores private keys in an offline, tamper-resistant chip
Hardware wallets keep private keys in a secure, air-gapped chip that never exposes them to internet-connected devices.
Question 2: What is a BIP-39 mnemonic seed phrase used for in blockchain wallet security?
- Encrypting on-chain transactions end-to-end
- Deterministically regenerating all wallet private keys from a single backup (Correct answer)
- Authenticating users on centralized exchanges
- Verifying smart contract bytecode on deployment
Correct answer: Deterministically regenerating all wallet private keys from a single backup
A BIP-39 seed phrase lets users recover an entire HD wallet's key hierarchy from a single 12- or 24-word backup.
Question 3: Which attack method involves malware silently replacing a copied cryptocurrency address with the attacker's own address?
- Sybil attack
- Clipboard hijacking attack (Correct answer)
- Replay attack
- Eclipse attack
Correct answer: Clipboard hijacking attack
Clipboard hijacking malware monitors the clipboard and swaps any detected crypto address for the attacker's address before the user pastes it.
Question 4: What is the minimum number of co-signers required to authorize a transaction in a 2-of-3 multisig wallet?
- 1
- 2 (Correct answer)
- 3
- 0
Correct answer: 2
A 2-of-3 multisig wallet requires any two of the three designated private keys to sign before a transaction is broadcast.
Question 5: What best practice should users follow when physically backing up a hardware wallet seed phrase?
- Store it in an encrypted digital file on cloud storage
- Write it on paper or metal and store it in a physically secure, offline location (Correct answer)
- Email it to yourself using a strong password
- Save it in the wallet app's built-in cloud backup feature
Correct answer: Write it on paper or metal and store it in a physically secure, offline location
Seed phrases must be stored offline on paper or metal in a secure location, never in any digital or internet-connected medium.
Question 6: What type of wallet attack tricks a user into installing a counterfeit wallet application that steals private keys on first use?
- Man-in-the-middle attack
- Supply chain / fake wallet attack (Correct answer)
- Front-running attack
- Dusting attack
Correct answer: Supply chain / fake wallet attack
Fake wallet supply chain attacks distribute malicious wallet apps through unofficial stores or phishing sites that harvest keys immediately upon wallet creation.
Blockchain Security Training Blockchain Wallet & Exchange Security 1
What is the primary security advantage of a hardware wallet over a software wallet?