DeFi

Question 1

What is a Block Chain?

Answer 1

Recorded records of data over the time.

Question 2

What are characteristics of most popular Block Chains?

Answer 2

Distributed ➔ ledger is held by many computers in many locations (DLT), and
Decentralised ➔ decision-making is done collectively not by a single entity
Permissionless ➔ anyone can join the network
Immutable ➔ cannot be reversed (bad, if made a mistake, good for audit)
Transparency ➔ if people start exploiting each other, markets might not work.

Some can be private.

Question 3

What is cryptographically security?

Answer 3

– Each address has a balance of the asset, recorded on the blockchain an can receive assets to that address
– Each address has a private key (known only to the owner) and a public key (known to everyone)

Question 4

What is asymmetric cryptography?

Answer 4

Only the holder of the private key can create the signed message required to spend the balance, yet others can verify it using the public key.

Question 5

What are the uses of cryptocurrency?

Answer 5

Store of value (like a bank account or gold).
Payment system (like Visa, PayPal, etc.)

Question 6

What are “tokens”?

Answer 6

Digital assets like cryptocurrencies but that
don’t have a separate blockchain.
Recorded and transferred on the blockchain that houses the token’s smart contract (hence can verify ownership of a token)
Can be used as currencies or stores of value or units of account.
Unlike cryptocurrencies where the properties are hard coded into
the blockchain protocol, a token’s properties can be customised in
the token’s contract ➔ tokens = customisable securities and
“programmable money”

Question 7

What are the uses of tokens?