lecture 2 Flashcards

1
Q

What are the 3 functions of money?

A
  • medium of exchange
  • store of value
  • unit of account
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2
Q

What is barter?

A

Goods exchange

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3
Q

What is commodity money?

A

something that itself is valuable as well as use for trade

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4
Q

what is representative money?

A

Govt creates a commodity as a use of exchange

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5
Q

What is fiat currency?

A

Only has value as we all agree it does, eg cash

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6
Q

What are the properties of digital money?

A
  • relies on a trusted bookkeeper
  • settled by increasing/ decreasing balances in accounts
  • is a record of agreement of how much they owe you
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7
Q

What are the 2 types of digital transactions?

A
  • card present
  • card not present
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8
Q

What is a ledger?

A

book/file for recording economic transactions measured in terms of a monetary unit of account

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9
Q

what are the problems of trust being broken with a trusted bookkeeper?

A
  • monopolist transaction fees
  • ability to rewrite history by changing the ledger
  • single point of failure
  • control over users data
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10
Q

What does a decentralized payment system require?

A
  • perfectly accurate identification of ownership
  • perfectly accurate transfer of ownership
  • Fraud proof
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11
Q

Who are the Cypherpunks?

A

A loosely affiliate group of cryptography wizards concerned with lack of privacy in modern society

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12
Q

What did David Chaum propose?

A

Public key (identifiers) and private key (passwords) cryptography as a system to move tokens from one address to another

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13
Q

How did Stuart Haber and Scott Stornetta attempt to solve the trusted third party problem?

A

crowd sourcing via wide distribution of ledger to provide audit function

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14
Q

What is bitcoin?

A

A stateless, decentralized algorithmic currency invented by Satoshi Nakamoto

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15
Q

what is the electronic ledger called and where does it exist?

A

Blockchain and exists only is cyberspace

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16
Q

What was Nakamotos intention with bitcoin?

A

to create a cash-like system that requires no trust between parties

17
Q

What date did Nakamoto announce bitcoin via mailing list?

A

March 31st 2008

18
Q

What did Austin and Becky craig do with bitcoin?

A

Lived for 101 days and visited 4 countries

19
Q

what are the benefits of accepting bitcoin?

A
  • save 3% fees
  • Market to clientele eg tech users
  • cheap access to international customers and vendors
20
Q

What are some costs of accepting bitcoin

A
  • risks of holding bitcoin
  • risk of hacking
  • accounting problems