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Wallets and Security 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.

Read the first 7 Wallets and Security flashcards as text

  1. What is a multisignature (multisig) wallet?

    Answer: A wallet requiring multiple private key signatures to authorize a transaction

    Multisig wallets require M-of-N key holders to sign before funds can be moved, reducing single points of failure.

  2. Which scenario best describes a '2-of-3' multisig setup?

    Answer: Any two of three designated keys must sign to spend funds

    In a 2-of-3 multisig, at least two of the three authorized private keys must provide signatures to approve any transaction.

  3. What is a 'watch-only' wallet?

    Answer: A wallet containing only a public key or address to track balances without spending ability

    Watch-only wallets hold public keys or addresses to monitor incoming transactions and balances without storing private keys, preventing unauthorized spending.

  4. What is clipboard hijacking in the context of cryptocurrency transactions?

    Answer: Malware that replaces a copied wallet address with an attacker's address

    Clipboard hijacking malware monitors the clipboard and silently replaces any cryptocurrency address the user copies with the attacker's address.

  5. Why should a seed phrase never be stored as a screenshot or photo on a smartphone?

    Answer: Cloud backups and malware can expose the image to attackers

    Photos auto-sync to cloud storage and can be accessed by malware or data breaches, exposing the seed phrase to remote attackers.

  6. What is the purpose of Shamir's Secret Sharing when applied to cryptocurrency wallet backups?

    Answer: Splitting a secret into multiple shares where a threshold is needed to reconstruct it

    Shamir's Secret Sharing divides a secret into N shares so that any M of them can reconstruct the original, with no single share revealing the secret.

  7. Which feature distinguishes a deterministic (HD) wallet from a non-deterministic wallet?

    Answer: All keys are derived from a single master seed, enabling easy backup and restoration

    Hierarchical Deterministic wallets derive all key pairs from one seed, so backing up that seed restores every address and private key ever generated.