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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 'dusting attack' in cryptocurrency security?

    Answer: Sending tiny amounts of crypto to wallets to track and de-anonymize owners

    Attackers send dust (tiny amounts) to many addresses; when users spend that dust, it links their addresses together, enabling identity analysis.

  2. What does 'air-gapped' mean when describing a wallet's security model?

    Answer: The device has never been connected to the internet or any network

    An air-gapped device is physically isolated from all networks, making remote attacks impossible since there is no communication pathway for attackers.

  3. What security risk does a malicious browser extension pose to a software wallet?

    Answer: It can read browser memory and steal private keys or seed phrases

    Browser extensions have access to page content and JavaScript memory, allowing malicious ones to extract private keys or intercept seed phrases as they are displayed.

  4. Which of the following is the safest way to verify a hardware wallet's firmware authenticity?

    Answer: Verify the cryptographic signature of the firmware against the manufacturer's public key

    Manufacturers sign firmware releases with their private key; verifying the signature against the known public key ensures the firmware is genuine and untampered.

  5. What is a 'SIM swap attack' and how does it threaten crypto wallets?

    Answer: Socially engineering a carrier to transfer a phone number to the attacker's SIM, bypassing SMS 2FA

    Attackers convince a mobile carrier to reassign a victim's number to their SIM, then use SMS-based two-factor authentication to take over exchange accounts and wallets.

  6. What does BIP44 define in the context of HD wallets?

    Answer: A hierarchical path structure for deriving keys across multiple coins and accounts

    BIP44 specifies a multi-level derivation path (purpose/coin/account/change/index) enabling a single HD wallet to manage keys for many blockchains and accounts.

  7. Why is it important to test wallet recovery with a seed phrase before storing large amounts of crypto?

    Answer: It confirms the seed phrase is correctly recorded and the recovery process works before funds are at risk

    Errors in recording a seed phrase (missed words, wrong order) are only discovered at recovery time; testing beforehand prevents permanent fund loss.