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crypto > Lecture 5 > Flashcards

Lecture 5 Flashcards

1
Q

What are the 2 standout developers of bitcoin?

A
  1. venture capitalists eg ashton kutcher
  2. Blockchain 2.0
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2
Q

What is an example of Blockchain 2.0?

A

Mike Hearn proposed automated taxi service not owned by anyone and paid for in Bitcoin

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3
Q

Who created Ethereum?

A

Vitalik Buterin

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4
Q

What are some characteristics of Eth?

A
  • designed so anyone can use
  • complex method for determining new supply, capped at 18m
    Governance nominally centralized but continues to be dominated by owner
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5
Q

What are the similarities of Eth and BTC?

A

like BTC, Ethereum has:
- blockchain with blocks of data: mined by some participants and distributed to others for validation
- blocks form chain by referring to hash of previous block
- Main network is a public, permission less network

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6
Q

How does Eth differ from BTC?

A
  • runs on Eth virtual machine (EVM)
  • compensation price list based on “gas” - (unit that measures computational complexity)
  • Gas fee = units of gas used (base fee + priority fee
  • No more mining, proof of stake relies on validators that stake at least 32ETH
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7
Q

What is “Gas”?

A

the unit that measures the amount of computational effort required to execute specific operations on the Ethereum network

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8
Q

What are smart contacts?

A

contractual clauses (eg collateral) embedded in hardware and software we deal with so breach of contact is expensive.

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9
Q

What problems can smart contracts solve?

A
  • guarantees specific performance
  • economizing (reduce expenses) on contracting costs
  • economizing on enforcement costs
  • differing strategic behaviour
  • removing need for trust
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10
Q

Do smart contracts require blockchains?

A

No, however blockchains open up much more complex possibilities

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11
Q

What are the consequences of Ethereum?

A
  • no clear concept of time
  • contracts may “run out of gas” when executing
  • need to consult an oracle for external data, that can be hacked
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12
Q

What is the hard fork in Ethereum called and what block was it on?

A

Ethereum classic, block 1,920,000

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13
Q

What are the 2 “impossible” things that have occurred with Ethereum?

A
  1. history rewritten on blockchain
  2. smart contract preempted by human intervention
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14
Q

what does the Bank of International Settlements (BIS) say positively on distributed technology?

A

greater market transparency and more effective risk management across systems

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15
Q

What are BIS concerns with distributed ledger technology?

A

could automatically trigger margin calls in financial markets, potentially leading to a systematic event

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16
Q

What is an altcoin?

A

Cryptocurrencies launched after the success of BTC

17
Q

What are the 4 main types of altcoins?

A
  1. Payment tokens = crypto = coins
  2. security/asset tokens (eg gold)
  3. Utility tokens
  4. NFT’s
18
Q

What is Auracoin?

A

Attempted to be an alternative to Krona in Iceland
- airdropped to all Icelandic residents in 2014
- wasn’t widely used

19
Q

What is Solarcoin?

A

Reward for using solar panels, low demand so value was low

20
Q

What is Tether and what is it used for?

A

Helps investors move between fiat currency and crypto
Parking place for high frequency investors, 70% of bitcoin trading is via tether

21
Q

What are the problems with Tether?

A
  • company never produced an audit
  • paid £41m settlement to US commodity futures trading commitee
22
Q

How was Omni layer protocol marketed?

A

as a layer that runs on top of bitcoin to provide advanced transactional features to users.

23
Q

How do altcoins differ?

A
  • Operational design (eg mining, consensus etc)
  • replication of real assets/currencies
  • affinity tokens
24
Q

What is a token?

A

Units recorded on any blockchain

25
Q

What are the 4 broad categories of tokens?

A
  1. native blockchain tokens - incentives for minors to work
  2. Asset backed tokens - Title to real world asset held in trust by custodian
  3. Utility token - claim on service provided by issuer of token
  4. NFT

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