5.2 - Digital Currency Flashcards
What are the two forms of currency? [2]
Fiat currency & digital currency
What does digital currency rely on? [1]
Central banking system
What is digital currency? [2]
Currency that exists in electronic form only; no physical form and is essentially data on a database
What is cryptocurrency? [2]
a form of digital currency that uses a chain of decentralised computers to control and monitor transactions
What is cryptography? [1]
The protection of data by use of coding; involves encryption and decryption
What does cryptocurrency use that overcomes the issue of security? [1]
cryptography
What is cryptocurrency maintained by? [1]
decentralised banking system
What is blockchain? [1]
a decentralised database
What does a blockchain consist of? [2]
A number of interconnected computers which are not connected to a central server
What are some places where blockchaining is used? [4]
- cryptocurrency
- research
- politics
- education
When is a new block created? [1]
whenever a new transaction takes place
What does a block include? [3]
Data, hash value & previous hash value
What are two examples of the data stored in a block? [2]
Name of sender and recipient & amount of money
What is the Hash Value? [2]
a unique value generated by an algorithm
What does a hash value include? [1]
a timestamp which identifies when an event actually takes place
