5.2 - digital currency 💰

Question 1

what do most digital currencies rely on?

Answer 1

a central banking system that can be problematic when it comes to one’s privacy

Question 2

how does cryptocurrency allow for more privacy and security?

Answer 2

it tracks transactions with crytography in a decentralized blockchain network and has its own separate rules set by a specific community

Question 3

what does a blockchain network involve?

Answer 3

blocks for every new transaction that include unique hash values + timestamps (any hash value other than 0000 doesn’t signify what’s called a genesis block) to reduce the risk of tampering

Question 4

how does proof-of-work add more security to a blockchain network?

Answer 4

it ensures some time’s passed since a transaction block was created before it can be added and inspects that block in the meantime - this can cause delays that actually work against hackers by foiling them in some way