5.2 digital currency

Question 1

digital currency

Answer 1

currency that exists electronically as data

Question 2

cryptocurrency

Answer 2

form of digital currency that uses a chain of decentralised computers

Question 3

cryptography

Answer 3

the protection of data by use of coding; usually involving encryption and decryption

Question 4

blockchain

Answer 4

decentralised database where all transactions are stored

Question 5

timestamp

Answer 5

digital record of the date and time that a data block is created in a blockchain

Question 6

proof of work [3]

Answer 6

-algorithm used in blockchain networks to confirm a transaction and to produce new blocks
-makes sure it takes ten minutes to determine the necessary proof of work for each block before it can be added
-the thing that miners do

Question 7

difference between digital currency and cryptocurrency [4]

Answer 7

• cryptocurrency is decentralised
• cryptocurrency uses cryptography
• cryptocurrency transactions are publicly available
• cryptocurrency works by being within a blockchains so is much more secure

Question 8

features of blockchaining [3]

Answer 8

-decentralised
-transactions stored on all computers
-can’t be changed without consent of all networking memebers

Question 9

features of block [5]

Answer 9

-data
-hash value (includes timstamp)
-previous has value
-first one is a genesis block

Question 10

advantages of decentralisation [4]

Answer 10

-maintains confidentiality and security
-not regulated by central banks and governements
-no state control
-all rules set by the community itself

Question 11

uses of blochchaining [5]

Answer 11

-cryptocurrency exchanges
-smart contracts
-research
-politics
-education