Cryptocurrency Mining and Transaction Lifecycle 4 — Questions and Answers
Question 1: What is 'Replace-By-Fee' (RBF) in Bitcoin?
- A method to replace a mined block with a higher-fee version
- A protocol allowing an unconfirmed transaction to be replaced by a new version with a higher fee (Correct answer)
- An exchange feature to swap coins at better rates
- A wallet backup mechanism using fee-based encryption
Correct answer: A protocol allowing an unconfirmed transaction to be replaced by a new version with a higher fee
RBF (BIP 125) lets a sender broadcast a replacement transaction with a higher fee to incentivize miners to confirm it faster, before the original is mined.
Question 2: In Ethereum's proof-of-stake, what do validators stake to participate in block creation?
- Bitcoin as collateral
- 32 ETH as a deposit (Correct answer)
- Mining hardware worth at least $10,000
- An NFT representing their validator identity
Correct answer: 32 ETH as a deposit
Ethereum validators must stake exactly 32 ETH to activate a validator node and participate in block proposal and attestation.
Question 3: What is a 'block reward subsidy' in Bitcoin?
- A fee paid by users to prioritize their transactions
- The fixed amount of new Bitcoin created and given to the miner per block (Correct answer)
- A government subsidy for renewable energy used in mining
- A bonus paid to mining pools for finding blocks faster than average
Correct answer: The fixed amount of new Bitcoin created and given to the miner per block
The block subsidy is the newly minted Bitcoin awarded to the miner who successfully adds a block; it halves approximately every four years.
Question 4: What is 'transaction malleability' in the context of Bitcoin?
- The ability to change a transaction's fee after it is confirmed
- The ability to alter a transaction's ID without invalidating its signature, before confirmation (Correct answer)
- The flexibility of UTXO amounts to split across outputs
- The capacity of miners to reorder transactions within a block
Correct answer: The ability to alter a transaction's ID without invalidating its signature, before confirmation
Transaction malleability allowed the transaction ID (txid) to be changed by modifying the unlocking script before confirmation, a flaw addressed by SegWit.
Question 5: What does 'hashrate' measure in cryptocurrency mining?
- The number of transactions validated per second
- The speed at which a miner performs hash computations per second (Correct answer)
- The size of the blockchain in gigabytes
- The percentage of the total supply already mined
Correct answer: The speed at which a miner performs hash computations per second
Hashrate measures how many hash calculations a mining device or network performs per second, indicating mining power and network security.
Question 6: What is the purpose of a 'checkpoint' in some cryptocurrency implementations?
- To mark blocks where mining difficulty was adjusted
- To hardcode specific block hashes into the software to prevent deep chain reorganizations (Correct answer)
- To save the state of the mempool at regular intervals
- To record miner identities for regulatory compliance
Correct answer: To hardcode specific block hashes into the software to prevent deep chain reorganizations
Checkpoints are hardcoded block hashes in node software that prevent the chain from being reorganized below that point, protecting against history-rewriting attacks.
Question 7: During a Bitcoin transaction, what is the 'change output'?
- The network fee returned to the miner
- The unspent portion of input UTXOs sent back to the sender's wallet (Correct answer)
- The increase in Bitcoin price between sending and confirming
- The portion of a transaction allocated to a charity address
Correct answer: The unspent portion of input UTXOs sent back to the sender's wallet
Since UTXOs must be spent entirely, any excess value beyond the intended payment and fees is returned to the sender as a change output.
Cryptocurrency Mining and Transaction Lifecycle 4
What is 'Replace-By-Fee' (RBF) in Bitcoin?