Chapter 2: Basic Facts on Cryptocurrency

Question 1

five main characteristics of money

Answer 1

1 scarcity
2 divisibility
3 transportability
4 durability
5 recognizability

Question 2

coins (e.g., Dogecoin/ Litecoin)

Answer 2

variations of the open source of Bitcoin

Question 3

tokens (e.g., Ethereum)

Answer 3

secondary assets for DApps within the blockchain system

Question 4

in order for Bitcoins to be mined, miners must…

Answer 4

…help update the public ledger as well as help validate work done by other miners who run the blockchain

Question 5

miners are also commonly known as…

Answer 5

…mining nodes

Question 6

first, miners reduce…

Answer 6

…information within a transaction into a hash

Question 7

hash

Answer 7

an alphanumeric string with 64 characters

Question 8

a blockchain is organised…

Answer 8

…in a chronological order

Question 9

when a transaction is hashed…

Answer 9

…it’s mixed with the data of another transaction to ensure that a new hash is formed

Question 10

transactions are continually combined under a ____ until a block is formed

Answer 10

hash

Question 11

blocks are then used to grow the transaction ____

Answer 11

chain

Question 12

miners must submit…

Answer 12

…nonces

Question 13

nonce

Answer 13

a random guess

Question 14

when the miner seals off the new block, a ______ ________ is created

Answer 14

block number

Question 15

PoW | Proof of Work

Answer 15

has to be checked in order to prove that the data submitted is accurate

Question 16

ASIC

Answer 16

Application-Specific Circuit Chip [i.e., a chip that has been developed to help Bitcoin miners]

Question 17

_______ _______ have been created to combine the computing power of miners + increase their chances of earning rewards

Answer 17

mining pools

Question 18

aside from mining pools, miners can also opt for _______ mining

Answer 18

cloud

Question 19

companies or individuals can rent time on another person’s ______ and earn the rewards that this rig gets during such a time-frame

Answer 19

rig