Blockchain Developer Certification Practice

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Prepare for the Blockchain Developer Certification. Master blockchain concepts with flashcards and multiple choice questions. Explanation-based learning for your success!

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What is the purpose of a 12-word mnemonic in Ethereum?

To encrypt data securely
To simplify the management of keys for Ethereum accounts
To create contract addresses
To access decentralized applications

The correct answer is: To simplify the management of keys for Ethereum accounts

The purpose of a 12-word mnemonic in Ethereum is to simplify the management of keys for Ethereum accounts. This mnemonic phrase serves as a human-readable representation of a seed, which can be used to generate and restore cryptocurrency wallets. When a user creates a new Ethereum wallet, a 12-word phrase is generated using a specific word list from the BIP39 standard. This makes it easier for users to remember their wallet’s seed phrase instead of a long, complex string of characters. By using this 12-word mnemonic, users can securely back up their wallets. If they need to recover their wallet, they can input the mnemonic phrase into a supported wallet application, which will regenerate their private keys, giving them access to their funds without the need to remember or store complicated alphanumeric keys. This method enhances user experience, reduces the risk of losing access due to forgotten keys, and promotes better security practices among users in the Ethereum ecosystem.