Key Management and Wallet Security Flashcards
7 cards from real CBSE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Key Management and Wallet Security flashcards as text
What privacy risk arises from reusing the same blockchain address for multiple transactions?
Answer: Address linking enables transaction graph analysis to de-anonymize the user
Reusing addresses allows blockchain analysts to link all transactions to a single entity using graph analysis, potentially de-anonymizing users through their public transaction history.
How does a Threshold Signature Scheme (TSS) differ fundamentally from traditional multisig?
Answer: TSS generates a single valid signature collaboratively without any party ever holding the complete private key
In TSS, parties use multi-party computation to collaboratively produce one signature without the full private key ever existing in one place, unlike multisig where each participant signs independently.
Why is key escrow used in enterprise blockchain deployments?
Answer: To enable authorized recovery of keys when the primary holder is unavailable
Key escrow allows enterprises to recover blockchain asset access if a key holder departs, is incapacitated, or loses their key, satisfying business continuity and regulatory requirements.
What is the security implication of generating private keys using a weak or predictable random number generator?
Answer: Private keys become predictable and vulnerable to enumeration or brute-force attacks
Insufficient entropy in key generation reduces the effective key space, making keys predictable and discoverable by attackers, as demonstrated by the Android Bitcoin wallet PRNG vulnerability.
What is the primary security concern of storing blockchain private keys in a cloud-based key management service?
Answer: The cloud provider or an attacker breaching the provider gains potential access to stored keys
Delegating key storage to a cloud provider creates a critical third-party trust dependency; a provider breach, insider threat, or misconfiguration can expose all stored private keys.
What is the security purpose of cryptographic key rotation in a blockchain security program?
Answer: Periodically replacing keys to limit the damage window if a key is ever compromised
Key rotation replaces cryptographic keys on a regular schedule, limiting the period during which a compromised key can be exploited and reducing the blast radius of any single key breach.
What is the significance of the 'gap limit' setting in an HD wallet's address discovery process?
Answer: The number of consecutive unused derived addresses the wallet scans when recovering funds
The gap limit defines how many consecutive unused derived addresses the wallet checks when scanning the blockchain; too low a value causes the wallet to stop scanning before finding all funded addresses.