Cryptocurrency and Blockchain Fundamentals
Free Chainalysis Cryptocurrency Fundamentals Certification practice — 6 questions on Cryptocurrency and Blockchain Fundamentals, with explanations. No sign-up. Full 12-question mixed test →
A blockchain analyst is comparing Bitcoin's Nakamoto consensus (Proof of Work) to Ethereum's post-Merge Proof-of-Stake consensus. Which statement correctly describes a security property that PoS chains must address but PoW chains do not?
Because PoS validators don't burn external resources like PoW miners, an attacker who acquires old private keys can theoretically build an alternate 'costless' chain from genesis. PoS clients mitigate this with weak subjectivity checkpoints — new nodes trust a recent, socially-agreed block hash rather than re-deriving history purely from chain rules, unlike PoW where the longest valid chain is objectively verifiable.
Which pairing correctly matches a stablecoin with its actual collateralization or stabilization mechanism?
DAI is generated when users lock crypto collateral (e.g., ETH, WBTC) into MakerDAO Vaults in excess of the DAI minted, making it an overcollateralized, crypto-backed stablecoin governed by smart contracts rather than a central issuer.
Under Ethereum's EIP-1559 fee mechanism, which statement correctly describes the base fee?
EIP-1559 introduced a base fee that is algorithmically adjusted up or down depending on whether the prior block was more or less than 50% full, and this base fee amount is burned rather than paid to validators, which can make ETH deflationary during high-demand periods.
An investigator reviewing DeFi activity finds a user provided liquidity to an ETH/USDC pool on an automated market maker (AMM) when ETH was priced at $2,000. ETH later rose to $4,000. Compared to simply holding the original ETH and USDC amounts separately, which outcome BEST describes what happened to the liquidity provider's position?
In a constant-product AMM (x*y=k), arbitrageurs buy the underpriced asset (ETH, post price rise) from the pool until pool price matches the market, leaving the pool holding relatively more USDC and less ETH than before. When the LP withdraws, the value of their share is typically lower than if they had simply held the original token amounts — this gap is impermanent loss.
Which statement correctly distinguishes ERC-721 tokens from ERC-20 tokens on Ethereum?
ERC-721 is the standard for non-fungible tokens (NFTs), where each token has a unique tokenId and metadata making it non-interchangeable, whereas ERC-20 defines fungible tokens where each unit is identical and interchangeable (e.g., USDC, UNI).
A blockchain analyst observes a Bitcoin transaction combining inputs from several apparently unrelated wallets into one transaction, with multiple equal-value outputs distributed to different, previously unlinked addresses and no clear common ownership signal among the inputs. This pattern is most consistent with which technique?
CoinJoin-style mixers intentionally combine inputs from multiple unrelated users into a single transaction with equal-value outputs, breaking the common-input-ownership heuristic that blockchain analysis tools rely on to cluster addresses belonging to the same entity — this is the defining goal of mixing services.
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