Transactions Assessment 1

1.How are electronic coins defined and built?

Coins are defined as digital money. New coins are made through a process of consensus achieved by miners voting with hashpower.

Coins are defined as tokens that are created through the mining process.

Coins are defined as a chain of digital signatures and built by demonstrating a valid spend of inputs, then defining new and unspent transaction outputs.

Coins are defined as electronic cash and are built using SHA-256.

2.T/F: Which statements are true:

A coin’s history can be mapped as a chain of digital signatures that leads all the way back to the blocks in which each of the Satoshi tokens being used in the transaction was created.

This chain forms a node. The combined nodes that currently exist on the network is what we refer to as the Bitcoin ledger.

The combined DAGs that represent the history of all UTXOs that currently exist on the network is what we refer to as the Bitcoin ledger.

Transactions are built by demonstrating a valid spend of inputs, then defining new and unspent transaction outputs (UTXOs).

3.What is a UTXO and what is its purpose?

Unspent Transaction Outputs represent unspent digital coins that, when combined with a valid unlocking script, can become inputs into a future transaction.

Unspendable Transaction Outputs are transactions that are unable to be spent and are used mainly for preserving data to the Bitcoin ledger.

Unspent transaction outputs are tokens that can be issued on top of bitcoins.

Unspent transaction outputs are the coins that have not yet been used in a transaction since their entry into circulation from the coinbase.

4.To spend a coin, the owner (or proxy) constructs a message that includes: • The identity of the coin or coins on the ledger which requires the: __________ i) • Valid solutions to each of the __________ ii) written onto the ledger when the coin or coins were created • A new locking script for each of the outputs being generated in the transaction which tests a _________ iii) provided by the receiver to the spending party • Other details including a locktime parameter and protocol version • Once the transaction is complete, it is ready to be sent onto the network to be processed into a _________ iv)

i) transaction ID, ii) output index, iii) locking script, iv) block

i) private keys, ii) blocks, iii) input, iv) transaction

i) public key, ii) scripts, iii) private key, iv) block

i) transaction ID and output index, ii) locking scripts, iii) knowledge proof, iv) block

5.T/F: Which statements are true?(only need to select one correct option to pass)

The locking script protects user’s bitcoins when stored in custody services such as exchanges to prevent them from being stolen.

In order to make a transaction a user must provide valid solutions to each of the locking scripts of the bitcoins that will be spent.

The locking script prevents double spends by locking the transfer of coins to a particular address.

The solution to the script unlocks the coins allowing for them to be transferred.

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