Cryptocurrency Lesson 1

What is a digital currency?

• Physical money only used in digital format
• A currency that exists only electronically
• A government-issued currency
• An outdated form of currency

What is blockchain primarily used for in digital currencies?

• Tracking ownership of physical assets
• Tracking transactions
• Enhancing digital marketing
• Controlling inflation

What property must a currency have?

• Must be digital
• Must be gold-backed
• Must be a medium of exchange
• Must be unlimited

What is one of the main benefits of digital currencies?

• They require physical storage
• They are always backed by gold
• Low transaction costs
• They are controlled by governments

What does it mean that the blockchain is a distributed ledger?

• It is controlled by a single entity
• It is maintained across multiple locations
• It is not accessible to the public
• It stores data temporarily

How does digital currency prevent counterfeiting?

• By using physical security features
• Through cryptographic techniques
• By government regulations
• Through unlimited supply

What is a private key in digital currency?

• A public posting of transaction records
• A secret key used for authorizing transactions
• A key shared with everyone in the network
• A password for network access

Which scenario describes hyperinflation?

• Prices drop rapidly over time
• Prices remain stable over decades
• Prices increase rapidly over a short period
• Government prints less money

What is 'cold storage' in digital currency?

• Storing coins in a cold climate
• Keeping digital currency offline
• A database for storing transaction records
• Freezing assets for regulatory purposes

Why might the value of a digital currency fall to zero?

• If it becomes too popular
• If it is backed by gold
• If people lose trust in it
• If the transaction costs are too high