Functions & Characteristics of Money
When money transitions from physical bills to cloud-based digital currency, what specific trait shifts its main risk from physical wear-and-tear to cyber-attack and hacking?
What is Durability?
Describe Fiat Currency
Government-issued currency that is backed entirely by public trust and legal decree rather than any underlying physical commodity. (AKA Paper money like USD, Euro, Yen)
When a bank is so large and connected that its collapse would negatively affect everyone
What are too big to fail banks?
A system put in place by an organization to resolve complaints from people
What is a redress mechanism?
Decentralized finance is built directly on this network.
What is a blockchain network?
What are the 3 core characteristics of money?
Medium of Exchange, Unit of Account, Store of Value
What is Barter?
To trade goods or services directly for other goods or services without using currency
What is one advantage of credit unions and one advantage oftraditional banks?
A high interest rate on yields and Physical branches and locations
A federal agency protects consumers from unfair, deceptive, or fraudulent business practices
What is the Federal Trade Commission (FTC)?
Why is crypto so accessible?
Digital Blockchains
why is store of value important?
Money can be kept and saved for future purchases. (Grants purchasing power).
The reason Traditional Banks are chosen over Credit Unions.
Accessibility, daily convenience and the plethora of financial services that can be managed within one source.
Application Programming Interface ; digital bridge between financial systems
this technology records cryptocurrency transactions n a shared ledger that is maintained by many computers instead of one authority
what is a blockchain?
Define Scarcity
Resources are finite, there are not enough for everyone
What is the biggest disadvantage of Bartering?
What are the disadvantages of paper money?
1. Paper money can disintegrate over time
2. the government can print money when they want.
What is cloud computing
using powerful, remote computers accessed over the internet to view and store data, run programs, and deliver services- instead of using your own local hard drives
what are 2 advantages and disadvantages of decentralized money and crypto?
Advantages: Users have full control over their funds without relying on banks of governments.
Transaction are permanently recorded on a public immutable ledger
Disadvantages: values change a lot, making it risky to make purchases
transactions cant be canceled or refunded
What is a medium of exchange?
Any item or system widely accepted by parties to complete the sale, purchase, or trade of any goods
What is legal tender?
A legal and economic system where a government declares a specific use of currency that is the only medium accepted for debts, purchasing in stores, etc.
What does the "money printer go BRRR" meme represent?
The devaluing of the dollar's purchasing power from the Federal Reserve printing more dollars to add to the money supply. (Fiat currency)
What is Fintech?
The use of new digital tools and software to make transactions faster and easier.