Bitcoin and Blockchain

Question 1

What is bitcoin?

Answer 1

• Intangible asset

- Electronic cash

Question 2

Why use bitcoin?

Answer 2

Independent of any government or central authority

Can be anonymous (favorites of criminals)

Low transaction costs

Question 3

What are risks of bitcoin?

Answer 3

Bitcoin investors and users may be targets for fraudsters and criminals (bitcons)

No insurance for holding and investment in bitcoin

Radical extreme flections in prices

Possibility of government regulation and restriction

Don’t expect to recover losses
- Difficult to trace transactions

Question 4

What is blockchain?

Answer 4

A decentralized, distributed lager system (open ledger for everyone to see)

It is indepdent, secure, non modified audit trail

Part of the invention of bitcoins to provide secure decentralized accounting

Records exist in a file that consists of “blocks” documented transaction records

Imagine block train as an actual train, every transaction adds another block to the train.

Question 5

The security of blockchain depends on three factors:

Answer 5

1) Independent confirmation
2) Asymmetric encryption
3) Cheap, fast, computing capacity

Question 6

What are some blockchain applications?

Answer 6

1) Smart contracts- enables contract enforcement through mutual block monitoring
2) Internet of things- A likely application of “smart contracts”
3) Open source payments- why use financial institutions and their fees, for payments, when a cheap, verifiable, open-ledger network is available?
4) Financing and crowdfunding: Previous example also illustrates the use blockchain for financing
5) Corporate governance and financial reporting- current 24/7 availability of financial information
6) Supply chain auditing- was my t-shirt made by child labor in Cambodia? Trace its’ blockchain records
7) Predictive analytics- Aggregate millions of user’s expectations about an event. Resulting predictions can improve forecasting of weather, business outcomes, sporting events, electronics, etc.

Question 7

What are risks of blockchain risks and limitations?

Answer 7

1) . Hacks, Cracks, and Attacks
2) Blockchain tech is complex and relies on sophisticated, advanced encryption and networking technologies
3) You have to have a lot of users- people have to be paying attention to those who might be committing fraud