LinkedIn Learning: Cryptocurrency Foundations: Module 1 - What is Cryptocurrency?
Double-spend
- Scenario, in the Bitcoin network, where someone tries to send a bitcoin transaction to two different recipients at the same time. - However, once a bitcoin transaction is confirmed, it makes it nearly impossible to double spend it. - The more confirmations that a particular transaction has, the harder it becomes to double spend the bitcoins.
Distributed ledger is popularly know as?
A: Blockchain!
Crypto tokens
AKA: tokens another blockchain-based crypto asset. Run on top of existing blockchains rather than having their own blockchain like Bitcoin. Tokens generally represent physical and digital assets, utilities and services Example: fractional ownership of a car, stock, or estate
Cybercriminal
An individual who uses computers, networks, and the Internet to perpetrate crime.
What makes cryptocurrency appealing?
Anonymity and absence of oversight conducive for cybercriminals
ICO
Initial Coin Offering, somewhat similar to an IPO in the non-crypto world. Startups issue their own token in exchange for ether. This is essentially crowdfunding on the ethereum platform. Used to raise capital
How does the Blockchain verify the buyer?
Through the use of public and private keys
Distributed Apps (dapps)
[(applications or software) that run on multiple computers within a network simultaneously] and [can be stored on (servers or cloud computing platforms).]
The Cardano crypto, for example, is an application running on Blockchain technology in a similar way to
a spreadsheet application running on Microsoft Windows or the Apple macOS
Exchange in the crypto sense
a third-party service used to conduct transactions on a person's behalf relating to cryptocurrency.
Blockchain: private key
a way to unlock the mailbox
market cap
an estimation of the value of a business that is obtained by multiplying the number of shares outstanding by the current price of a share
Web3
an idea for a new iteration of the World Wide Web which incorporates concepts such as decentralization, blockchain technologies, and token-based economics.
Distributed ledger
consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions
How are NFT's recognized?
denoted by an entry in a blockchain, such as Ethereum, that proves ownership of an asset.
What does an NFT store in a blockchain?
details of a transaction
Cross-border payments
financial transactions where the payer and the recipient are based in separate countries.
Security tokens or STOs
issue tokens for an investment contract in an underlying investment asset, such as a stock or bond. The security token captures all ownership information in a blockchain record.
Governance tokens
issued to users to represent voting rights that can be exercised to influence the operations and future development of DeFi solution
Solving the double spend problem requires _____.
keeping track of all transactions
The magic of a Blockchain network ___________
queues up all transactions, validates them as being legitimate, and then adds them to distributed copies of the ledger without the need to trust participants
Blockchain: public key
similar to a mailbox, where people know where to send something. The public address
In a blockchain network, trust is enabled through _____.
software code
Collateral tokens
supply and support loan liquidity
Market Capitalization
total value of a publicly traded company's outstanding common shares owned by stockholders
Fee Tokens
used to facilitate banking fees
What's a new popular type of token?
NFT's - non-fungible tokens
How are cryptocurrencies used as investments assets?
People try to buy low, hold, and then sell high
STOs legalities
STOs have a much higher degree of oversight. For example, they must conform with financial regulations, such as KYC (Know Your Customer) or know your customer and AML or anti-money laundering laws
Who came up with the idea of Bitcoin?
Satoshi Nakamoto Note: Probably not the real person's name but perhaps their pseudonym or possibly a group
How does Blockchain help the prevent the double-spend problem?
The Blockchain keeps track on what is spent
How does cryptocurrency enable trust from participants?
The Blockchain's source code
Tokenomics
The characteristics of how supply and demand of cryptocurrencies and tokens function is known as
Blockchain
A digital ledger that contains time-stamped transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly.
Ledger
A group of accounts
What has been the governmental response to crypto
1. Accepting the cryptocurrency, sometimes as legal tender 2. Banning cryptocurrency
Which countries are experimenting with their own cryptocurrencies?
1. China 2. Britain 3. Sweden
Who banned cryptocurrency
1. China 2. Bangladesh 3. Iraq 4. Several others
DeFi important functions
1. Facilitating trading 2. Payments 3. Investments
DeFi tokens
1. Governance 2. Fee 3. Collateral Good Free Cars
Things to consider if a cryptocurrency is good or not
1. If there are a finite or infinite amount number of cryptos being issued 2. Track market capitalization, trading volume, price stability, and number of participants
What banking institutions support cryptocurrency
1. JP Morgan Chase 2. PayPal 3. Wells Fargo 4. Goldman Sachs
Things to consider to invest in tokens
1. Leadership 2. Talent 3. Technology behind them
DeFi
Decentralized finances, a type of financial service that Ethereum has offered. These innovative solutions provide lower cost, more accessible, more open and higher-speed financial services that range from lending to insurance.
In 2021, which country made Bitcoin legal tender?
El Salvador
Who became the first country to declare Bitcoin as legal tender?
El Salvador
Cryptocurrencies that offer a compelling application platforms
Ethereum, Solano, and Ergo
