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Crypto basics quiz

Free crypto questions with answers and explanations: Bitcoin's 21 million cap, who controls the network, hot vs cold wallets, Ethereum and smart contracts, stablecoins and de-pegs, the four-year cycle, gas fees, NFTs and spot Bitcoin ETFs.

Tap an answer to check it, or open "Show the answer" under each question. Every question comes from a free 3-minute lesson, linked under its answer. Educational content, not financial advice.

Question 1 of 21

Max Bitcoin supply?

  1. 100 million
  2. 21 million
  3. Unlimited
  4. 1 billion
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Answer: B · 21 million

Only 21 million bitcoin will ever exist — it is hardcoded and cannot be changed.

📚 Learn it: What is Bitcoin?

Question 2 of 21

Safest crypto storage?

  1. Hardware wallet (Ledger/Trezor)
  2. Exchange account (Coinbase/Kraken)
  3. Browser wallet (MetaMask/Phantom)
  4. Seed phrase photo in iCloud
Show the answer

Answer: A · Hardware wallet (Ledger/Trezor)

Hardware wallets keep your keys offline — protected from exchange failures and remote hacks, though you can still be phished into handing over your seed phrase.

📚 Learn it: Hot vs Cold Wallets

Question 3 of 21

What's the main difference between Bitcoin and Ethereum?

  1. Ethereum is backed by the dollar (a stablecoin)
  2. Ethereum has a fixed 21 million supply
  3. Ethereum can run programs (smart contracts)
  4. Bitcoin is decentralized; Ethereum is company-run
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Answer: C · Ethereum can run programs (smart contracts)

Bitcoin moves money. Ethereum runs programs. That's why apps, NFTs, and DeFi all live on Ethereum, not Bitcoin.

📚 Learn it: Ethereum & Smart Contracts

Question 4 of 21US

What's a stablecoin pegged to?

  1. A stable asset like the US dollar
  2. Bitcoin's price, so it tracks the market
  3. The average of all crypto prices
  4. A price the issuer resets daily
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Answer: A · A stable asset like the US dollar

Most stablecoins are pegged 1:1 to the US dollar. Some are pegged to gold, euros, or even baskets of assets.

📚 Learn it: Stablecoins — Digital Dollars

Question 5 of 21

What's a 'bear market' in crypto?

  1. A single day when prices drop more than 10%
  2. When an exchange goes bankrupt and freezes withdrawals
  3. A period of rising prices and strong buying interest
  4. A period of falling prices and low enthusiasm
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Answer: D · A period of falling prices and low enthusiasm

Bear markets are extended periods of decline. They feel awful — but they're when patient investors accumulate cheap.

📚 Learn it: Bull, Bear & The Crypto Cycle

Question 6 of 21

Who actually receives the gas fee you pay?

  1. The IRS, as a tax on each crypto transfer
  2. The network/validators that process it
  3. The developers who first created the coin
  4. The person you're sending the crypto to
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Answer: B · The network/validators that process it

Gas pays the computers that confirm and secure your transaction — not the recipient.

📚 Learn it: Why It Costs Money to Move Your Money

Question 7 of 21

What does owning an NFT actually prove?

  1. Your wallet holds the 'official' token for that item
  2. The item has real value because it's recorded on a blockchain
  3. You created the artwork the token points to
  4. No one else can legally copy or download the image
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Answer: A · Your wallet holds the 'official' token for that item

An NFT records who holds the token — it doesn't stop copying or guarantee value.

📚 Learn it: Digital Collectibles or Greater-Fool Game?

Question 8 of 21

Why is a Bitcoin ETF convenient?

  1. You can spend the Bitcoin from your brokerage app
  2. It has no fees, unlike buying Bitcoin on an exchange
  3. You get Bitcoin exposure in a normal brokerage account
  4. It shields you from Bitcoin's big price drops
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Answer: C · You get Bitcoin exposure in a normal brokerage account

A Bitcoin ETF lets you hold Bitcoin exposure in a regular brokerage account — no wallets or exchanges needed.

📚 Learn it: Bitcoin ETFs

Question 9 of 21

Why does Bitcoin's capped supply matter?

  1. It makes it free to send, like email
  2. It makes it scarce, like digital gold
  3. It means coins expire at the cap
  4. It makes it stable, like the dollar
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Answer: B · It makes it scarce, like digital gold

Fixed supply means no one can print more. Scarcity is central to Bitcoin's 'digital gold' argument.

📚 Learn it: What is Bitcoin?

Question 10 of 21

What is a 'hot' wallet?

  1. A wallet on a USB hardware device
  2. A wallet connected to the internet
  3. A wallet holding trending coins
  4. A wallet kept on paper in a safe
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Answer: B · A wallet connected to the internet

Hot wallets are online — convenient but more exposed to hacks. Cold wallets stay offline.

📚 Learn it: Hot vs Cold Wallets

Learn it in the app: Crypto & Web3 lessons, free →

3-minute lessons with a quiz, XP and streaks in the free app. No sign-up needed.

Question 11 of 21

What is a smart contract?

  1. A deal among miners that sets daily transaction fees
  2. Code that automatically executes when conditions are met
  3. A digitally signed agreement that a court enforces
  4. A crypto token that rises in value as more apps use it
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Answer: B · Code that automatically executes when conditions are met

Think of a vending machine: insert money → drop snack. Smart contracts work the same way but for any digital agreement — no human needed.

📚 Learn it: Ethereum & Smart Contracts

Question 12 of 21

Why do traders use stablecoins?

  1. To park money between trades without leaving crypto
  2. To earn quick returns as stablecoin prices climb
  3. To avoid paying taxes on their crypto profits
  4. To hedge against the US dollar losing value to inflation
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Answer: A · To park money between trades without leaving crypto

Selling crypto for dollars takes time and fees. Selling for a stablecoin = instant, on-chain, ready to redeploy.

📚 Learn it: Stablecoins — Digital Dollars

Question 13 of 21

How often has Bitcoin had major crashes?

  1. Never — it has only gone up
  2. Roughly every 4 years
  3. Just once, back in 2011
  4. Roughly every decade
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Answer: B · Roughly every 4 years

Bitcoin has had multiple ~80% drawdowns roughly every 4 years — followed each time by recovery to new highs. So far.

📚 Learn it: Bull, Bear & The Crypto Cycle

Question 14 of 21

Why do gas fees sometimes spike?

  1. The network is congested with transactions
  2. The recipient's wallet adds its own fee
  3. You're sending a larger amount than usual
  4. Fees are raised on weekends and holidays
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Answer: A · The network is congested with transactions

When everyone transacts at once, fees get bid up to be processed first — congestion drives the toll up.

📚 Learn it: Why It Costs Money to Move Your Money

Question 15 of 21

What's the 'greater fool' problem with many NFTs?

  1. You rely on someone paying more later, not real value
  2. Most buyers can't tell good digital art from bad art
  3. They're illegal in the US, so buyers have no legal protection
  4. Gas fees are so high you lose money on every trade
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Answer: A · You rely on someone paying more later, not real value

If the only reason to buy is hoping to flip it higher, your profit depends on finding a greater fool — and that runs out.

📚 Learn it: Digital Collectibles or Greater-Fool Game?

Question 16 of 21US

When did spot Bitcoin ETFs launch in the US?

  1. October 2021
  2. January 2024
  3. Not yet approved
  4. June 2015
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Answer: B · January 2024

Spot Bitcoin ETFs were approved and launched in January 2024 — a landmark moment for crypto.

📚 Learn it: Bitcoin ETFs

Question 17 of 21

Who controls the Bitcoin network?

  1. A CEO and board, like a tech company
  2. The US government, via the Treasury
  3. No single entity — it is decentralized
  4. A group of banks that run the ledger
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Answer: C · No single entity — it is decentralized

Bitcoin runs on a global network of computers. No company, person, or government controls it.

📚 Learn it: What is Bitcoin?

Question 18 of 21

'Not your keys, not your coins' means...

  1. Keep coins on big exchanges, since they guard the keys better than you
  2. Coins on an exchange are fully yours the moment the purchase clears
  3. If you do not control the keys, you do not truly own the crypto
  4. Your exchange password is the key, so the coins are yours
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Answer: C · If you do not control the keys, you do not truly own the crypto

If an exchange holds your keys, you are trusting them. Self-custody means YOU truly own your crypto.

📚 Learn it: Hot vs Cold Wallets

Question 19 of 21

Which of these typically runs on Ethereum?

  1. NFTs
  2. DeFi apps like Uniswap
  3. Stablecoins like USDC
  4. All of the above
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Answer: D · All of the above

Ethereum is the most popular platform for NFTs, DeFi protocols, and many stablecoins — they all need smart contracts.

📚 Learn it: Ethereum & Smart Contracts

Question 20 of 21

Are stablecoins 100% safe?

  1. Only gold-backed ones, since gold's price can never fall
  2. Yes — the $1 peg means they can't lose value
  3. Only USDT — as the biggest one, it's too big to fail
  4. No — some have de-pegged or collapsed before (like UST)
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Answer: D · No — some have de-pegged or collapsed before (like UST)

Algorithmic stablecoins like UST have famously collapsed. Even big ones like USDT face questions. Read about the issuer before holding.

📚 Learn it: Stablecoins — Digital Dollars

Question 21 of 21

What does cycle awareness teach investors?

  1. Cycles are predictable, so you can time the exact top and bottom
  2. Buy at the top, since rising prices mean the crash is over
  3. Sell everything on the first big dip to protect your gains
  4. Crashes are emotional, not the end — discipline matters
Show the answer

Answer: D · Crashes are emotional, not the end — discipline matters

Investors who survive crypto are the ones who don't panic-sell during 80% drops. Knowing cycles exist helps you stay rational.

📚 Learn it: Bull, Bear & The Crypto Cycle

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