What are the 3 functions of money?
- medium of exchange
- store of value
- unit of account
What is barter?
Goods exchange
What is commodity money?
something that itself is valuable as well as use for trade
what is representative money?
Govt creates a commodity as a use of exchange
What is fiat currency?
Only has value as we all agree it does, eg cash
What are the properties of digital money?
- relies on a trusted bookkeeper
- settled by increasing/ decreasing balances in accounts
- is a record of agreement of how much they owe you
What are the 2 types of digital transactions?
- card present
- card not present
What is a ledger?
book/file for recording economic transactions measured in terms of a monetary unit of account
what are the problems of trust being broken with a trusted bookkeeper?
- monopolist transaction fees
- ability to rewrite history by changing the ledger
- single point of failure
- control over users data
What does a decentralized payment system require?
- perfectly accurate identification of ownership
- perfectly accurate transfer of ownership
- Fraud proof
Who are the Cypherpunks?
A loosely affiliate group of cryptography wizards concerned with lack of privacy in modern society
What did David Chaum propose?
Public key (identifiers) and private key (passwords) cryptography as a system to move tokens from one address to another
How did Stuart Haber and Scott Stornetta attempt to solve the trusted third party problem?
crowd sourcing via wide distribution of ledger to provide audit function
What is bitcoin?
A stateless, decentralized algorithmic currency invented by Satoshi Nakamoto
what is the electronic ledger called and where does it exist?
Blockchain and exists only is cyberspace
What was Nakamotos intention with bitcoin?
to create a cash-like system that requires no trust between parties
What date did Nakamoto announce bitcoin via mailing list?
March 31st 2008
What did Austin and Becky craig do with bitcoin?
Lived for 101 days and visited 4 countries
what are the benefits of accepting bitcoin?
- save 3% fees
- Market to clientele eg tech users
- cheap access to international customers and vendors
What are some costs of accepting bitcoin
- risks of holding bitcoin
- risk of hacking
- accounting problems
