Cryptocurrency Mining and Transaction Lifecycle 5 — Questions and Answers
Question 1: What is 'child-pays-for-parent' (CPFP) in Bitcoin?
- A mechanism where mining pools distribute rewards to sub-pool members
- A technique where a recipient spends an unconfirmed transaction's output with a high fee to incentivize miners to confirm both (Correct answer)
- A protocol for parent company wallets to subsidize employee transaction fees
- A SegWit feature that batches parent and child transactions together
Correct answer: A technique where a recipient spends an unconfirmed transaction's output with a high fee to incentivize miners to confirm both
CPFP lets a recipient create a new transaction spending the unconfirmed funds with a high fee, incentivizing miners to include both the parent and child transactions.
Question 2: What is 'stratum protocol' in the context of mining pools?
- A layered blockchain architecture for sidechains
- A communication protocol between miners and pool servers to efficiently distribute mining work (Correct answer)
- A difficulty-scaling algorithm used by Litecoin
- A transaction batching method to reduce fees
Correct answer: A communication protocol between miners and pool servers to efficiently distribute mining work
Stratum is a lightweight protocol used by mining pools to push work to individual miners and collect submitted shares efficiently.
Question 3: Which of the following correctly describes 'proof of burn' as a consensus mechanism?
- Miners must burn physical hardware after each block
- Validators destroy coins by sending them to an unspendable address to earn the right to mine (Correct answer)
- Nodes vote to 'burn' invalid blocks from the chain
- Mining rigs consume energy as proof of computational work
Correct answer: Validators destroy coins by sending them to an unspendable address to earn the right to mine
Proof of burn requires participants to permanently destroy coins by sending them to a verifiably unspendable address, demonstrating commitment in exchange for mining rights.
Question 4: What is a 'mining share' in the context of pool mining?
- An equity stake in a publicly traded mining company
- A proof of work submission that meets the pool's lower difficulty target, used to measure a miner's contribution (Correct answer)
- A block solution submitted directly to the network
- The percentage of the block reward allocated to hardware manufacturers
Correct answer: A proof of work submission that meets the pool's lower difficulty target, used to measure a miner's contribution
A share is a partial proof-of-work that satisfies the pool's easier target, allowing the pool to measure each miner's contribution before distributing block rewards proportionally.
Question 5: What distinguishes a 'light client' (SPV wallet) from a full node?
- Light clients generate new coins; full nodes only validate
- Light clients download only block headers and verify transactions using Merkle proofs, without storing the full blockchain (Correct answer)
- Light clients require more storage space than full nodes
- Light clients perform all mining operations while full nodes only relay transactions
Correct answer: Light clients download only block headers and verify transactions using Merkle proofs, without storing the full blockchain
SPV (Simplified Payment Verification) clients rely on Merkle proofs and block headers to verify transactions without downloading the full blockchain.
Question 6: What is the 'extraNonce' field used for in Bitcoin mining?
- To store the miner's wallet address inside the block
- To extend the search space for valid hashes beyond the 32-bit nonce limit (Correct answer)
- To encode the block's timestamp with higher precision
- To store metadata about the mining pool that found the block
Correct answer: To extend the search space for valid hashes beyond the 32-bit nonce limit
When the 32-bit nonce space is exhausted without finding a valid hash, miners modify the extraNonce in the coinbase transaction to create additional variation in the block header hash.
Question 7: What is 'Finney attack' in cryptocurrency security?
- An attack that exploits the difficulty adjustment algorithm
- A pre-mining attack where a miner broadcasts a block only after receiving goods from a zero-confirmation transaction (Correct answer)
- A DDoS attack targeting mining pool servers
- An exploit that drains funds from multi-signature wallets
Correct answer: A pre-mining attack where a miner broadcasts a block only after receiving goods from a zero-confirmation transaction
In a Finney attack, a dishonest miner pre-mines a block with a self-transfer, then quickly spends at a merchant accepting zero-confirmation payments before broadcasting the pre-mined block.
Cryptocurrency Mining and Transaction Lifecycle 5
What is 'child-pays-for-parent' (CPFP) in Bitcoin?