Basic Concepts
Why do people believe money has value?
Scarcity + Belief
What is mining?
When computers work to verify and secure transactions on a blockchain network. Miners solve complex puzzles to confirm these transactions, and as a reward, they earn small amounts of cryptocurrency.
Who does a portion of your money go to after a transaction with most online payments?
The bank or credit card companies.
What is a decentralized currency?
A currency that is not controlled by anyone. As we discussed, Bitcoin has a limited amount of coins (21 million). Nobody can create more.
What is bitcoin
digital currency designed to operate without banks or middle men
Why do miners earn cryptocurrency as a reward for mining?
Because they help secure and verify transactions
The issue of ensuring that digital money isn't spent more than once.
what happens if a company you've invested in goes bankrupt
your money will disappear as well
What is the bitcoin limit
$21 million
What is halving?
It is when every 4 years miners receive 50% less bitcoin for verifying transactions (rewards).
Why do we need a central authority within the digital currency world?
to prevent people from lying about how much money they have or spending their money multiple times.
What is a centralized currency? What is its biggest risk?
Money that is controlled and created by a government or institution.
The risk is that they can make as much as they want which can lead to inflation.
Why is bitcoin less stable than other currencies
Because people may decide to use another online currency instead
What is the main job of crypto mining?
To verify transactions and keep the blockchain safe
how many transactions per second can bitcoin do?
7 transactions per second
What is the blockchain
the technology that records and secures cryptocurrency
Why can't someone simply create fake cryptocurrency by copying it?
Because each cryptocurrency transaction is verified by many miners or computers on the network, making it impossible to create duplicates without being caught.
Why is it important for many miners to work on verifying transactions rather than just one or two?
Because with more miners, it’s harder for anyone to cheat or change the records because the majority need to agree on the transactions for them to be accepted.
What does limited supply do?
What is staking in a decentralized system?
By putting money into the system, you are able to vote on how the system works