Cryptocurrency Mining and Transaction Lifecycle 2 — Questions and Answers
Question 1: What happens to a Bitcoin transaction before it is included in a block?
- It is immediately confirmed on the blockchain
- It waits in the mempool (Correct answer)
- It is stored in a cold wallet
- It is broadcast only to the recipient's node
Correct answer: It waits in the mempool
Unconfirmed transactions sit in the mempool (memory pool) until a miner selects and includes them in a block.
Question 2: Which hashing algorithm does Bitcoin's proof-of-work system use?
- Ethash
- SHA-256 (Correct answer)
- Scrypt
- X11
Correct answer: SHA-256
Bitcoin uses SHA-256 (Secure Hash Algorithm 256-bit) for its proof-of-work mining process.
Question 3: What is a 'stale block' in cryptocurrency mining?
- A block with no transactions
- A block that is older than 6 months
- A valid block that was mined but not accepted because another block was found first (Correct answer)
- A block containing invalid transactions
Correct answer: A valid block that was mined but not accepted because another block was found first
A stale block is a correctly solved block that arrives too late because another miner already found and broadcast a valid block at the same height.
Question 4: What does 'transaction throughput' measure in a blockchain network?
- The size of each transaction in bytes
- The number of transactions processed per second (TPS) (Correct answer)
- The fee paid per transaction
- The number of nodes validating a transaction
Correct answer: The number of transactions processed per second (TPS)
Transaction throughput, measured in TPS (transactions per second), indicates how many transactions a network can process in a given time period.
Question 5: In Bitcoin mining, what is the purpose of the 'nonce'?
- To sign transactions cryptographically
- To identify the miner's wallet address
- To store transaction data in the block
- To vary the block header input so miners can find a valid hash (Correct answer)
Correct answer: To vary the block header input so miners can find a valid hash
The nonce is a 32-bit number that miners increment repeatedly to produce a block hash that meets the network's difficulty target.
Question 6: What is 'selfish mining' in the context of cryptocurrency?
- Mining without sharing block rewards with a pool
- Withholding discovered blocks to gain a competitive advantage over honest miners (Correct answer)
- Mining only high-fee transactions
- Using excess energy to mine more blocks than competitors
Correct answer: Withholding discovered blocks to gain a competitive advantage over honest miners
Selfish mining is a strategy where a miner or pool withholds newly found blocks to force honest miners to waste effort on an already-solved block.
Question 7: Which of the following best describes an 'orphan block'?
- A block with no parent block reference
- A valid block that is not part of the longest chain (Correct answer)
- A block that contains no transactions
- A block mined before the genesis block
Correct answer: A valid block that is not part of the longest chain
An orphan (or uncle) block is a valid block that was mined but is not included in the main canonical chain because a competing block at the same height was accepted instead.
Cryptocurrency Mining and Transaction Lifecycle 2
What happens to a Bitcoin transaction before it is included in a block?