Understanding Bitcoin Basics

What is Bitcoin and how does it work?

• Bitcoin is a decentralized digital currency that uses blockchain technology for secure transactions.

• Bitcoin is a type of stock that can be traded on the stock market.

• Bitcoin is a government-issued currency regulated by central banks.

• Bitcoin is a physical currency used for cash transactions.

Explain the concept of blockchain technology in relation to Bitcoin.

• Blockchain is a centralized database managed by a single entity for Bitcoin transactions.

• Blockchain technology is the decentralized ledger that underpins Bitcoin, enabling secure and transparent transactions.

• Blockchain technology is a type of cryptocurrency used for trading Bitcoin.

• Blockchain technology is a physical hardware used to mine Bitcoin.

What advantages does Bitcoin offer over conventional financial systems?

• Bitcoin transactions are reversible

• Bitcoin is subject to inflationary pressures

• Bitcoin allows for anonymous transactions

• Bitcoin is regulated by central banks

How is Bitcoin created and what is the process called?

• Bitcoin is created by printing money.

• Bitcoin is created through mining.

• Bitcoin is created via a centralized bank.

• Bitcoin is created through trading.

What responsibilities do miners have within the Bitcoin network?

• Miners are tasked with promoting Bitcoin through social media campaigns.

• Miners ensure the integrity of transactions and receive Bitcoin rewards for their contributions to the blockchain.

• Miners develop new trading strategies for Bitcoin investors.

• Miners are involved in creating regulations for cryptocurrency exchanges.

What are the potential drawbacks of using cryptocurrencies such as Bitcoin?

• High transaction fees

• Limited scalability and speed

• Increased privacy and security

• Widespread adoption by merchants

How does the supply of Bitcoin differ from that of traditional currencies?

• The supply of Bitcoin is determined by government policies.

• The supply of Bitcoin is capped at 21 million, while traditional currencies can be increased by central banks.

• Bitcoin can be printed by miners at will.

• Traditional currencies have a fixed supply like Bitcoin.

In what ways can Bitcoin be used for transactions?

• Bitcoin is a physical currency that can be held in hand.

• Bitcoin can be used for peer-to-peer transfers, online purchases, remittances, and as an investment.

• Bitcoin can only be used for gambling.

• Bitcoin is exclusively for large corporations.

Compare the volatility of Bitcoin with that of traditional currencies.

• Bitcoin's volatility is similar to that of gold.

• Bitcoin is less volatile than traditional currencies.

• Traditional currencies are more volatile than Bitcoin.

• Bitcoin is significantly more volatile than traditional currencies.

What does " the process of carrying out a buy or sell order " mean ?