5.2 Flashcards

(5 cards)

1
Q

Define digital currency.

A
  • Digital currency only exists electronically (ONLY DIGITAL FORM)
  • It has no physical form, unlike conventional fiat currency.
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2
Q

Outline the main differences b/w digital currency + cryptocurrency.

A
  • Digital currency relies on a centralized banking system, whereas cryptocurrency uses DECENTRALIZATION.
  • The cryptocurrency system is more secure as it works in a blockchain network
  • Cryptocurrency transactions are PUBLICLY AVAILABLE + can be TRACKED, unlike digital currency transactions
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3
Q

Define blockchain.

A
  • It is a digital ledger, that is, a time-stamped series of records that cannot be altered.
  • It facilitates the process of recording transactions and tracking assets in a business network.
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4
Q

In what areas is blockchain used?

A

cryptocurrency (digital currency) exchanges
politics
education

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5
Q

How is blockchain used to record digital currency transactions?

A
  • The blockchain is a shareable ledger, a digital file that records all transactions.
  • The ledger is distributed across several nodes, meaning the data is replicated and stored instantaneously on each node across the system.
  • If one node has an error in its data, it can use the thousands of other nodes as a reference point to correct itself.
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