5.2 Digital Currency Flashcards
define digital currency (4)
Exists in digital format
form of payment
Can be transferred between accounts when carrying out transactions
Regulated by central banks and governments
Examples of digital currency (2)
Paypal
applepay
How does a cryptocurrency work?
by being within a blockchain network (more secure)
Why was cyrptocurrency created (1)
address the problems associated with the centralisation of digital currency
What does cryptocurrency use (1)
cryptography
Describe cyrptography (2)
protection of data using coding
involves encryption
Features of cryptocurrency (3)
all transactions are publicly available
All rules are set by cryptocurrency community itself
No state control
Describe blockchain (2)
Decentralised database
All transactions from network members stored on blockchain
Where is blockchain used (5)
Cryptocurrency
Smart contracts
Research
Politics
Education
What does a block contain (3)
Data
Hash value
Previous Hash value
what happens when a new transaction takes place for the blockchain (3)
New block created
New hash value for the block
Each block includes timestamp
what happens when a new transaction takes place for the network members (2)
When new transaction takes place, all networked computers get a copy of transaction
It cannot be changed without the consent of all network members, removing the risk of security issues
What is a hash value (1)
unique value generated by an algorithm
What happens when a block is changed (2)
-hash value of the block is changed
-blocks beyond is invalid since chain is broken
What is the genesis block
first block
