Crypto basic concepts Flashcards
(46 cards)
What does ‘cryptocurrency’ refer to? (and how to pronounce it?)
cryptocurrency (KRIHP-toh-cur-ihn-see
is a digital or virtual currency that uses cryptography (krihp-TAH-gruh-fee)
for security.
True or False: Bitcoin is the first decentralized cryptocurrency.
True
Based on a free-market ideology, bitcoin was invented in 2008 when an unknown entity published a white paper under the pseudonym of Satoshi Nakamoto. Use of bitcoin as a currency began in 2009, with the release of its open-source implementation.
What is a ‘blockchain’?
A decentralized ledger that records all transactions across a network.
Fill in the blank: The process of validating transactions and adding them to the blockchain is called _____?
mining
(this is how people get bitcoin worth money… but they have to pay for the computers, internet, and electricity)
What is a ‘wallet’ in the context
(CON-teXt) of cryptocurrency?
(it’s like a bank account for crypto)
A digital tool that allows users to store and manage their cryptocurrencies.
Which of the following is NOT a type of cryptocurrency? A) Bitcoin B) Ethereum C) PayPal
C) PayPal
What is ‘Ethereum’ known for?
A blockchain platform that enables the creation of smart contracts and decentralized applications.
smart contracts - digital agreements that are self-executing when terms of contract are met
True or False: Altcoins are any cryptocurrencies other than Bitcoin.
True
there are actualy tens of thousands of altcoins but <50 that are worth considering, they have purposes like ‘privacy coins’ or ‘stable coins’ like USDC that exatly matches the value of Dollars
What does ‘ICO’ stand for? (think like IPO inital public offering)
Initial Coin Offering
Fill in the blank: A _____ is a smart contract platform that allows developers to build decentralized applications.
blockchain (this is what made Etherium famous)
What is ‘decentralization’ in the context of blockchain?
(like a boss that delegates as much as possible)
The distribution of control and authority across a network rather than being centralized in a single entity.
What is a ‘smart contract’?
A self-executing contract with the terms of the agreement directly written into code.
Which consensus mechanism is commonly used by Bitcoin?
Proof of Work
True or False: A ‘token’ is the same as a ‘coin’.
False
What is ‘market capitalization’?
The total value of a cryptocurrency calculated by multiplying its price by the total supply.
What does ‘HODL’ mean?
Hold On for Dear Life; a strategy of holding onto cryptocurrency rather than selling it.
Fill in the blank: A _____ is a digital asset that represents ownership or a stake in a project.
token
What is the purpose of a ‘cryptographic hash’?
To ensure the integrity and security of data by producing a fixed-size output from input data.
What is a ‘fork’ in blockchain technology?
A change or upgrade to the blockchain protocol that can create a split into two separate chains.
Which of the following is a popular decentralized finance (DeFi) platform? A) Uniswap B) Amazon C) Facebook
A) Uniswap
True or False: A centralized exchange is controlled by a single organization.
True
What is ‘liquidity’ in the context of cryptocurrency trading?
The ease with which an asset can be bought or sold in the market without affecting its price.
Fill in the blank: A _____ is a type of software that allows users to interact with a blockchain and manage their cryptocurrency.
wallet
What is ‘staking’?
The process of actively participating in transaction validation on a proof-of-stake blockchain.
