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Cryptocurrency Flashcards

7 cards from real Cryptocurrency practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. What is the 'Lightning Network' designed to solve?

    Answer: Bitcoin's slow transaction speed and scalability issues

    The Lightning Network is a Layer 2 payment protocol built on Bitcoin that enables fast, low-cost transactions by creating off-chain payment channels.

  2. What is a 'stablecoin'?

    Answer: A crypto asset designed to maintain a stable value, often pegged to a fiat currency

    Stablecoins are cryptocurrencies designed to minimize price volatility by pegging their value to a stable asset like the US dollar, gold, or through algorithmic mechanisms.

  3. What happened to the Terra (LUNA) ecosystem in May 2022?

    Answer: Its algorithmic stablecoin UST lost its peg, causing a catastrophic collapse

    In May 2022, the TerraUSD (UST) algorithmic stablecoin lost its dollar peg, triggering a death spiral that wiped out nearly $40 billion in market capitalization within days.

  4. What is 'cold storage' in cryptocurrency?

    Answer: Storing private keys on a device that is never connected to the internet

    Cold storage refers to keeping cryptocurrency private keys completely offline (e.g., hardware wallets or paper wallets) to protect them from online hacks and theft.

  5. What is the purpose of an Initial Coin Offering (ICO)?

    Answer: To raise capital for a new cryptocurrency project by selling tokens to investors

    An ICO is a fundraising method where a new cryptocurrency project sells its tokens to early investors to raise development capital, similar to an IPO in traditional finance.

  6. Which of the following best describes a 'smart contract'?

    Answer: Self-executing code stored on a blockchain that runs when predefined conditions are met

    A smart contract is self-executing code deployed on a blockchain that automatically enforces the terms of an agreement when its specified conditions are triggered.

  7. What is 'tokenomics'?

    Answer: The economic design and supply mechanics of a cryptocurrency token

    Tokenomics refers to the economic model of a cryptocurrency, including its total supply, distribution, inflation rate, utility, and incentive structures that drive its value.