Digital Thinking & Innovation > Unit 9 : Digital Currency > Flashcards

Unit 9 : Digital Currency Flashcards

(48 cards)

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1
Q

What is Digital Currency also known as ?

A
  1. e-money
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2
Q

What is the characteristics of Digital Currency? ( 3 )

A
  1. The fill the uses of traditional forms of money
  2. Only exist on the internet, and is completely intangible
  3. Every aspect of their issurance, transfer, and record-keeping is digital
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3
Q

What is the advantages of Digital Currency? ( 4 )

A
  1. Provide users with a more streamlined alternative
  2. Peer-to-peer transactions
  3. Digital currency payments are both instantaneous and low-cost
  4. Introduce a higher level of record-keeping and transparency to the sector
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4
Q

What company has authorized for Cryptocurrency in Malaysia?

A
  1. Luno
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5
Q
A
  • Subset of Digital Currency
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6
Q

What is the core technology in Digital Currency?

A
  1. Blockchain
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7
Q

What problems does Digital Currencies encounted? What is introduced for this problem?

A
  1. Problem known as “double-spend”
  2. The world’s first Cryptocurrency - Bitcoin
  • Cryptocurreny makes it impossible to counterfeit or double-spend
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8
Q

What technology causes many cryptocurrencies are decentralized networks?

A
  1. Blockchain technology
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9
Q

List out the advantages of cryptocurrency

A
  1. Built-in Scarcity May Support Value
  2. Loosening of Government Currency Monopolies
  3. Self-Interested, Self-Policing Communities
  4. Robust Privacy Protections
  5. Harder for Governments to Exact Financial Retribution
  6. Fewer Barriers and Costs to International Transactions
  7. Generally Cheaper Than Traditional Electronic Transactions
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10
Q

Why cryptocurrency provides advantages like Built-In Scarcity May Support Value?

A
  1. Cryptocurrencies are more like precious metals than flar currencies, like precious metals, they may offer inflation protection unavailable to flat currency users
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11
Q

Why cryptocurrency provides advantages like Loosening of Government currency Monopolies?

A
  1. Offer a reliable means of exchange outside the direct control of national banks’ quantitative easing ( central banks’ “printing money” by purchasing government bonds )
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12
Q

Why cryptocurrency provides advantages like Self-Interested, Self-Policing Communities?

A
  1. Because miners are paid for their efforts, they have a financial stake in keeping accurate, up-to-date transactions records - thereby securing integrity of the system and the value of the currency
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13
Q

Why cryptocurrency provides advantages like Robust Privacy Protections?

A
  1. Many cryptocurrency users employ pseudonyms unconnected to any information, accounts, or stored data that couls identify them
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14
Q

Why cryptocurrency provides advantages like Harder for Governments to Exact Financial Retribution?

A
  1. Governmentscan freeze or seize domestic bank accounts, or reverse transactions made in local currency
  2. Cryptocurrencies are virtually immune from authoritarian caprice
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15
Q

Why cryptocurrency provides advantages like Fewer Barrier and Costs to International Transactions?

A
  1. Cruptocurrencies don’t treat international transactions any differently than domestic transactions
  2. Transactions are either free or come with a norminal transaction fee, no matter where the sender and recipent are located
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16
Q

Why cryptocurrency provides advantages like Generally Cheaper than Traditional Electronic Transactions?

A
  1. Eliminate the need for a third-party payment processor - such as Visa or PayPal - to authenticcate and verify every electronic financial transaction, hense eliminating the need for mandatory transaction fees.
  2. Miners, the cryptocurrency equivalent of payment processors, earn new currency units for their work in addition to optional transaction fees.
  3. Cryptocurrency transaction fees are generally less than 1% of the transaction value, versus 1.5% to 3% for credit card payment processors and PayPal
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17
Q

List out the disadvantages of Cryptocurrency (

A
  1. Lack of Regulation Facilitates Black Market Activity
  2. Potential for Tax Evasion in Some Jurisdictions
  3. Potential for Financial Loss Due to Data Loss
  4. Potential for High Price Volatility and Manipulation
  5. Often Can’t Be Exchanged for Flat Currency
  6. Limited to No Facility for Chargebacks or Refunds
  7. Adverse Environmental Impacts of Cryptocurrency Mining
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18
Q

Why does Cryptocurrency has the disadvantages of Lack of Regulation Facilitates Black Market Activity?

A
  1. Many gray and black-market online transactions are denominated in Bitcoin and other cryptocurrencies
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19
Q

Why does Cryptocurrency has the disadvantages of Potential for Tax Evasion in Some Jurisdictions?

A
  1. Since cryptocurrencies aren’t regulated by national governments and usually exist outside their direct control, they naturally attract tax evaders
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20
Q

Why does Cryptocurrency has the disadvantages of Potential for Financial Loss Due to Data Loss
?

Study These Flashcards
A
  1. The infrastricture may be robust, but humans are the weakest link
  2. Cryptocurrency users may not take the proper precautions to avoid data loss
21
Q

Why does Cryptocurrency has the disadvantages of Potential for High Price Volatility and Manipulation?

Study These Flashcards
A
  1. Many cryptocurrencies have relatively few outstanding units concentrated in a handful of individuals ( often the currencies’ creators and close associates ) hands
  2. These holders effectively control these currencies’ supplies, making them susceptible to wild value swings and outright manipulation
22
Q

Why does Cryptocurrency has the disadvantages of Often Can’t Be Exchanged for Fiat Currency?

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A
  1. Only the most popular cryptocurrrencies with the highest market capitalizationm, in dollar terms - have dedicated online exchanges that permit direct exchage for flat currency
23
Q

Why does Cryptocurrency has the disadvantages of Limited to No Facility for Chargebacks or Refunds?

Study These Flashcards
A
  1. Although cryptocurrency miners serve as quasi-intermediaries for cryptocurrency transactions, they’re not responsible for arbitrating disputes between transacting parties. This means that you have no one to appeal to if you’re cheated in a cryptocurrency transaction
24
Q

Why does Cryptocurrency has the disadvantages of Potential for Tax Evasion in Some Jurisdictions?

25
What is the difference between Digital Currency and Cryptocurrency?
1. Digital Currency - Centralized location for transaction - Confidential transaction - Central Authority to deal with issues 2. Cryptocurrency - Decentralized location for transaction - Transparent transaction - Goven by the respective communities
26
List out the examples for Cryptocurrency ( 6 )
1. Bitcoin 2. Litecoin 3. Ripple 4. Etherium 5. Dogecoin 6. Coineye
27
What is Blockchain ?
1. The master ledger that records and stores all prior transactions and activity, validating ownership of all units of the currency at any given point of time * It has a finite length, containing a finite number of transactions that increases over time
28
What is added to finilized the cryptocurrency? What will happen once the transaction is finilzed?
1. Blockchain 2. Once the transaction is finilized, it's usually irreversible
29
Who is managing blockchain?
1. It is a peer-to-peer system with no central authority managing data flow * It has a large distributed network of independent users in more than one location, referred to as full nodes
30
How does Blockchain prevent the network from being corrupted?
1. Blockchain network produce cryptocurrencies as an incentive to maintain the integrity of the network
31
When was Blockchain originated from?
1. The creation of Bitcoin
32
How does the Bitcoin Cryptocurrency protects from Bitcoin Network? ( 3 )
1. Around 5,000 full nodes and globally distributed 2. Primarily used to trade Bitcoin and exchange value 3. Being used to secure other smaller blockchains and blockchain applications * Bitcoin was Scarce, Unduplicable and Portable
33
What cryptocurrencies became the first immutable and unalterable digital currency in existence?
1. Bitcoin * Solved the double-spend issue through the integration of timestamped cryptographic
34
What algorithm does Bitcoin uses?
1. Part of the Time Stamp 2. Hashing Algorithm
35
If a hacker wanted to get Bitcoin without mining, what should he do?
1. Need to redo the entire blockchain to alter it
36
List out the Transactions Process Flow of Bitcoin ( 6 )
1. Someone requests a transactions 2. The requested transaction is broadcast to a P@P network consisting of computers known as nodes 3. The P2P network of nodes validates the transacion and the user's status using known algorithms 4. Once verified, the transaction is combined with other transactions to create a new block of data for the ledger 5. The new block is then added to the existing blockchain in a way that is permanent and ulalterable 6. The transaction is complete
37
What does a verified transaction can involve in cryptocurrency? ( 4 )
1. Cryptocurrency 2. Contracts 3. Records 4. Other information
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43
Who are miners in Cryptocurrencies?
1. Serve as record-keepers for cryptocurrency communities, and indirect arbiters of the currencies' value
44
What are miners required to mine? ( 2 )
1. Vast amounts of computing power 2. Highly technical methods to verify the completeness, accuracy, and security of currencies' block chains
45
What does Digital Currencies such as Bitcoin reshaped?
1. The international communities's definition of money
46
When does Digital Currency is being catapulted into the spotlight ?
1. Coronavirus Pandemic
47
Why the technologies of Digital Currency had become robust?
1. Thanks to the robust digital infrastructure * This tread is also expected to continue as more people across the world gain access to high-speed internet
48
Why does central bankers are now majors players in the cryptocurrency space?
1. They had recognized the technological advantages of blockchain technology * But unlike Bitcoin, CBDC features a centralized distributed ledger technology ( DLT ) , which allows the central bankers to issue and control the monetary supply in a manner similar to the current flat currency system in place
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