ALTERNATIVES MODULE 82

Question 1

82.1 What were the differences between how the banking system and cryptocurrencies reacted during the GFC?

Answer 1

Question 2

82.1 What is distributed ledger technology? And what are its basic elements?

Answer 2

Trust not needed din this approach as it transparent

miners are those who validate the transactions

Question 3

82.1 Describe these two features of DLT: 1) Cryptography, and 2) smart contracts

Answer 3

Question 4

82.1 How does the blockchain work as a global digital ledger?

Answer 4

Question 5

82.1 What is a proof of work protocol?

Answer 5

The amount of energy and significant computer power makes it difficult for any individual, organisation, or group to falsify the history of ledger transactions

Question 6

82.1 What is a proof of stake protocol?

Answer 6

“pledge a digital asset”

authentication

Question 7

82.1 what are the rewards for validation in the proof of stake protocol?

Answer 7

rewards decreasing every 4 years

Question 8

82.1 What are permission less networks?

Answer 8

OPEN DLT

Question 9

82.1 What are permissioned networks?

Answer 9

Question 10

82.1 Name three types of digital assets:

Answer 10

Question 11

82.1 Name three types of cryptocurrencies:

Answer 11

CBDCs: the idea that you can have an account with the central bank, and that account gives you access to digital funds

Question 12

82.1 DIGITAL ASSET SPIDER CHART FORM INSTRUCTOR:

Answer 12

Question 13

82.1 What is a stable coin?

Answer 13

A stablecoin is a type of cryptocurrency designed to maintain a steady value by pegging it to a stable asset, most commonly the U.S. dollar, to avoid the high volatility of cryptocurrencies like Bitcoin. They are used for fast, low-cost digital payments, trading, and as a store of value

Question 14

82.1 What are tokens?

Answer 14

Question 15

82.1 what are the 5 distinguishing characteristics of digital assets?

Answer 15

Question 16

82.1 What are the investible digital assets?

Answer 16

Question 17

82.1 What are memecoins?

Answer 17

Question 18

82.1 What are the digital asset investment forms?

Answer 18

Question 19

82.1 What are cryptocurrency exchanges?

Answer 19

BOTH centralised and decentralised exchanges have potential problems with fraud and manipulation due to the lack of regulation and oversight

Question 20

82.1 What are pump and dump schemes?

Answer 20

Question 21

82.1 How can you lose access to your cryptocurrency wallet?

Answer 21

Question 22

82.1 What are cryptocurrency whales?

Answer 22

Question 23

82.1 What would be some examples of direct and non direct investments into digital assets

Answer 23

Question 24

82.1 What are cryptocurrency futures contracts?

Answer 24

Question 24

82.1 What are cryptocurrency coin trusts?

Answer 24

Question 25

82.1 What are three forms of indirect digital asset investment?

Answer 25

Question 26

82.1 What are asset-backed tokens?

Answer 26

digitally having ownership of physical assets too

Question 27

82.1 What are the cryptocurrency risks and returns?

Answer 27

Question 28

82.1 What is the medium of exchange for digital assets?

Answer 28

Question 29

82.1 What are the returns of cryptocurrency driven by?

Answer 29

Question 30

82.1 How is the diversification profile of digital assets?

Answer 30

crypto have exhibited low correlations with traditional asset classes

Question 31

82.2 What is the difference between a centralised and decentralised ledger?

Answer 31

A centralized ledger is a single, authoritative database managed by one entity (e.g., a bank), offering high speed and control but posing a single point of failure. A decentralized ledger (e.g., blockchain) is distributed across multiple nodes, removing intermediaries and improving security/transparency, but often at the cost of speed.

Question 32

82.2 What are smart contracts?

Answer 32

Smart contracts are self-executing, automated code scripts stored on a blockchain that manage, transfer, and enforce ownership rules for digital assets (such as cryptocurrencies or NFTs) without intermediaries.

Question 33

82.2 Transactions for digital assets are usually recorded....

Answer 33

On decentralised ledgers using permission less blockchain networks.

Question 34

82.2 A government decides it will privatize vehicle registrations if the province's auto insurance companies can record and maintain ownership titles using distributed ledger technology. This application of distributed ledger technology is best characterized as:

Answer 34

tokenisation

Question 35

82.2 What is tokenisation?

Answer 35

Tokenization refers to maintaining ownership records for physical assets on a distributed ledger.

Question 36

82.2 Which distributed ledger technology element may include proof of work and proof of stake?

Answer 36

Consensus protocols. A distributed ledger is a shared copy of a database in which entries are recorded and stored. The consensus mechanism is how new entries are added, and the participation network determines who can perform the network functions. Proof of Work (PoW) and Proof of Stake (PoS) are types of consensus protocols that govern how blocks can join the chain. PoW requires a computer on the network to solve a complex algorithm to validate and add blocks to the chain; it earns cryptocurrency in the process. Proof of Stake (PoS) requires that the validator verifies the transaction and a majority of validators attest to the validity of the proposed block.

Question 37

82.2 Smart contracts are most likely used for:

Answer 37

Extending the value of a blockchain beyond a store of value

Question 38

82.2 An Initial Coin offering is best described as a:

Answer 38

security token. An example of a security token is the ICO, an unregulated process in which companies offer crypto tokens for money or other cryptocurrency.

Question 39

82.2 Decentralised exchanges are less susceptible....

Answer 39

to network attacks and security vulnerabilities

Question 40

82.2 An example of a digital form of investment in a nondigital asset is:

Answer 40

an asset-backed token.