How to use this quiz
Work through the twenty questions below. Each one includes a concise answer and a one-paragraph explanation so you can learn as you go. Where helpful, I’ve linked to authoritative references.
The quiz
1) Who published Bitcoin’s whitepaper and when?
Satoshi Nakamoto published “Bitcoin: A Peer-to-Peer Electronic Cash System” on October 31, 2008. The paper introduced proof-of-work, peer-to-peer timestamping, and other core design choices.
2) When was the genesis block mined, and what message did it embed?
January 3, 2009; it included the UK Times headline: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” The message acts as a timestamp and social context for Bitcoin’s origins.
3) What’s Bitcoin’s consensus mechanism and hash function?
Proof-of-Work; miners search for a nonce so that the double SHA-256 hash of a block header meets the current target.
4) What is the target average time between blocks?
Roughly 10 minutes on average, though actual intervals vary; this randomness is modeled well by a Poisson process.
5) How does mining difficulty adjust over time?
Every 2,016 blocks (about two weeks), the network adjusts the difficulty so blocks continue arriving near the 10-minute target.
6) What is the maximum supply of bitcoin and the issuance schedule called?
The supply is capped at 21 million BTC. Issuance declines via “halvings” every 210,000 blocks; as of April 20, 2024 (block 840,000) the subsidy is 3.125 BTC.
7) What model does Bitcoin use to track spendable value on-chain?
The UTXO model (Unspent Transaction Outputs). Transactions consume UTXOs and create new ones; change is created as a new UTXO back to the sender.
8) How many satoshis make up one bitcoin?
100,000,000 satoshis equals 1 BTC (Bitcoin supports 8 decimal places).
9) What is a confirmation, and how many are commonly used for high-value settlement?
A confirmation is one block built on top of the block containing your transaction. Six confirmations has long been a conventional security threshold for larger transfers.
10) Are Bitcoin transactions reversible?
On-chain transactions are effectively irreversible after inclusion; there are no chargebacks like in traditional card networks.
11) Is Bitcoin anonymous?
It’s pseudonymous. All transactions are public; identities can be linked to addresses through reuse or off-chain information. Good privacy requires careful operational habits.
12) What did SegWit change, and when did it activate?
Activated August 24, 2017 (BIP141), SegWit separated witness data to fix transaction malleability and effectively increase block capacity (via block weight).
13) What did Taproot introduce, and when?
Activated November 2021, Taproot added Schnorr signatures and improvements that make complex spending (e.g., multisig) look more like simple payments, improving efficiency and privacy.
14) What is the Lightning Network in one sentence?
A layer-2 network of payment channels enabling instant, low-fee BTC transfers settled off-chain and secured by on-chain smart contracts.
15) What’s the difference between a node and a miner?
All miners are nodes, but not all nodes are miners. Full nodes validate and relay transactions/blocks; miners also assemble blocks and perform proof-of-work.
16) Name three common Bitcoin address “types” you’ll encounter.
Legacy P2PKH (starts with 1), P2SH (starts with 3), and SegWit bech32 addresses. Native SegWit v0 (P2WPKH/P2WSH) begin with bc1q; Taproot P2TR uses bech32m and begins with bc1p.
17) What’s a seed phrase and which standard defines it?
A human-readable mnemonic (typically 12/24 words) that backs up an HD wallet; defined by BIP39 and used to derive keys via BIP32.
18) Custodial vs. non-custodial wallet: what’s the key difference?
Custodial services hold your private keys on your behalf; non-custodial (self-custody) means you control the keys—and the responsibility.
19) Hot vs. cold storage: what’s the distinction?
Hot wallets are connected to the internet (more convenient but higher attack surface); cold wallets keep keys offline, suiting long-term storage.
20) What problem does Lightning rely on SegWit/Taproot to help solve?
SegWit fixed malleability, enabling reliable channel operations; Taproot improves efficiency and privacy of complex scripts—both underpin more scalable, private payment channels.
Quick self-assessment rubric
0–7 correct: brush up on basics like UTXOs, addresses, and custody.
8–14 correct: solid understanding; practice with a small testnet wallet and try bech32 addresses.
15–20 correct: advanced—consider running a node or experimenting with Lightning.
Key terms you should know
UTXO, Proof-of-Work, Difficulty Adjustment, Halving, SegWit, Taproot, Bech32/Bech32m, P2PKH/P2SH/P2WPKH/P2TR, Seed Phrase (BIP39), HD Wallets (BIP32), Lightning Channels.
Best-practice reminders
Use new addresses to reduce linkability; avoid reusing addresses. Back up your seed phrase securely and never share it. Consider cold storage for sizeable holdings; confirm support for bech32/bech32m when sending to modern addresses.
