Knowledge Challenges

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How are cryptocurrencies different from the euros or dollars issued by a central bank? (Select all that apply.)

Select all that apply

• A government prints them, like banknotes
• No central bank issues or controls them
• They exist only in digital form
• They can be used in only one country

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What lets a crypto network check that a transaction really came from the owner of the coins?

• The owner’s name, shown next to the payment
• A signature made with the owner’s private key
• A government office that approves each transaction
• Encryption, so that nobody else can read the transaction

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Recovery phrases: a message from “support” asks for your recovery phrase “to verify your wallet”. It uses the app’s logo. What do you do?

• Share it, as long as the message really uses the app’s logo
• Share only half of the words, so the wallet stays protected
• Refuse and delete it: real support never needs your recovery phrase

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Investing basics: Lea puts €200 (or $200) into an asset she plans to hold for years, knowing it could fall. Sam puts the same into a coin because a chat says it will double this week. Which is investing?

• Both, since any money put into an asset counts
• Lea’s: she has a plan, time, and accepts the risk
• Sam’s, since a bigger expected gain is what makes it investing

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How does inflation affect money kept in savings?

• It raises the value of savings
• It has no real effect unless inflation is very high
• It reduces what the money can buy over time

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Ana holds three different coins instead of one. What does spreading her money across coins do, and not do?

• It guarantees a profit, since the coins balance each other out
• It removes the costs, since the purchases are spread out
• Limits damage if one fails, but coins often fall together

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Which habits help beginners avoid common investing mistakes? (Select all that apply.)

Select all that apply

• Check prices often so you can react to every move
• Buy more after every fall to lower your average
• Start with amounts you are comfortable with
• Be consistent and follow your plan

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Trading costs: you buy a coin and sell it again a minute later, at an unchanged market price. Why do you get back a little less than you put in?

• The app holds back a deposit until you’ve held for a month
• Prices always dip a little right after anyone buys
• You paid the spread, plus any fees, on the buy and again on the sell

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The crypto market suddenly drops. What is a sensible first reaction?

• Stay calm, check the facts, follow your plan
• Buy more right away while the price is low
• Sell everything before it falls any further

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What happens if you sell in a panic after a price drop?

• You become a better investor by cutting losses fast
• You protect what is left
• You lock in the loss: it becomes real

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Why is it important to have an investing plan before you buy?

• To avoid emotional, in-the-moment decisions
• To work out the best moment to buy and sell
• To be ready to take advantage of every price dip

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Risk: a friend says, “With only €50 (or $50) in crypto, I can’t really lose.” What is accurate?

• Risk only starts once you hold an amount for years
• The loss is small in money, but it can still be all of it
• Small amounts can’t fall as far, in percent, as large ones

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Scam check: a website looks exactly like a well-known crypto app, but the web address is slightly different. What should you do?

• Log in quickly, just to check whether your balance is there
• Trust it if the browser shows a padlock next to the address
• Leave it and open the app you already know

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An ad says: “High risk, high reward: take more risk and you’ll grow faster.” What is accurate?

• It’s accurate: investors are always paid extra for risk
• It’s accurate for crypto, since prices recover in the end
• More risk widens the range of results; it promises nothing

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Two fictional coins: Token X costs 0.0001 and has 50 trillion tokens. Token Y costs 2,000 and has 1 million. Which is worth more in total?

• Token Y, since its price per token is far higher
• Neither: totals can’t be compared when prices differ
• Token X: about 5 billion in total, against 2 billion for Y

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In investing, what does a recurring buy do?

• It finds the best moment to buy each month
• It makes sure you never lose money overall
• It buys a fixed amount on a regular schedule