Forgot My Cash - Do You Take Bitcoin? Quiz

Answer: A Bitcoin receiving address

Bitcoin is a cryptocurrency: digital money whose payments are checked using mathematical methods called cryptography. Its network is a group of computers that follow shared rules. They keep a blockchain, which is a record of transactions (transfers of value) arranged in linked batches called blocks. Think of it as a record book copied across many computers, with new pages added in order.

A receiving address identifies the destination for a payment. A wallet, the software used to manage your payments, can generate this address. You share the address with the person paying you, but keep your wallet password private. A transaction ID is a reference for a particular payment, not the destination for a new one.

Answer: Private keys

A private key is a secret number used to approve a payment through a mathematical check. Self-custody means you control this information yourself rather than relying on a company to hold it for you. A wallet helps manage payments; it does not contain coins as separate files. The blockchain keeps the shared record of which funds can be spent, and the wallet reads that record to show your balance.

A receiving address can be shared, but a private key must stay secret. Someone who obtains the key may be able to spend the funds it controls. An exchange rate, by contrast, simply tells you how much one currency is worth in another.

Answer: A block explorer

Ethereum is a blockchain network that supports payments and programs. Its own cryptocurrency is called ether, often shortened to ETH; Ethereum and ether are related, but the names refer to different things.

A block explorer lets you browse the network's public records, much like looking up an entry in a catalogue. Entering a transaction ID can show the addresses involved, its status and the fee charged for processing it. It can also show which block contains the transaction. An explorer displays information; it does not give you control of someone else's money.

Answer: A digital signature

A digital signature is mathematical proof created from a private key and details of the payment. Computers check it with a related public key, which can be shared. The two keys have different jobs: the private one creates the signature, while the public one helps verify it. This proves control of the required key without revealing the secret number itself.

It is not a picture of a handwritten signature or a login code sent by email. A valid signature is one of several checks a payment must pass, including whether the funds are available to spend.

Answer: Trying to spend the same previously received funds in conflicting payments

Double spending means trying to use the same funds in two conflicting payments. Imagine trying to pay two different people with the very same money, without receiving any more. Making two payments is fine when you have enough separate funds for both.

Bitcoin payments refer back to amounts received earlier. Once an amount has been spent in the accepted blockchain record, another payment cannot spend that same amount there again. The network checks this shared history instead of simply accepting the sender's claim.

Answer: It has been included in a block in the accepted chain

A block is a batch of transactions added to the shared record. A payment gets its first confirmation when it is included in a block in the accepted chain. Later blocks added after that one give it further confirmations and make replacing that history increasingly difficult.

Broadcasting a payment means sending its details to other computers. That can happen before the payment has any confirmation, so being sent and being confirmed are different stages. A confirmation also does not mean the recipient has opened their wallet or read a message.

Answer: The amount of computing work needed

Ethereum can process payments and run programs, and both require computers to do work. Gas is the unit used to measure that work. A complicated program can need more gas than a simple transfer.

The amount of gas used and the price of each unit are separate things, rather like the amount of electricity used and its price. The resulting fee is paid in ether (ETH), Ethereum's own cryptocurrency. Charging for computing work helps stop someone from making the network perform endless tasks for free.

Answer: A program stored on the blockchain that runs according to its code

A smart contract is a program kept on the blockchain. Its code is a set of instructions, and it also has stored information that those instructions can use or change. A transaction can ask it to carry out a task, such as releasing a payment when the programmed conditions are met.

A vending machine makes a useful comparison: the right payment and selection lead to a programmed result. Smart does not mean that the program thinks for itself or understands what people intended. Like other software, it can contain mistakes.

Answer: It stays on the test network rather than becoming main-network ether

A testnet is a separate blockchain where developers can try programs and trial payments. Test ether is used for these experiments. The main network, often called Mainnet, has its own balances and transaction history.

Moving an application there does not move its test funds with it. Think of a rehearsal: it lets you practise what will happen, but it is not the real performance. Testing can reveal errors before launch, although it cannot prove that a program has no bugs.

Answer: An oracle

An oracle supplies outside information in a form a blockchain program can use. For example, it could provide rainfall readings to a program that makes a payment when an agreed amount of rain has fallen. The program cannot look at the sky or check a weather website by itself.

The source of the readings and how they are checked still matter: recording information on a blockchain does not automatically make it true. A block explorer displays existing records, a currency exchange trades currencies, and a wallet backup helps restore access. None of those roles is the oracle's job of supplying outside readings.