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    IGCSE - PAPER-1 - Student Notes-11

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    bhingaraarchibold20

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    IGCSE - PAPER-1 - Student Notes-11

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    bhingaraarchibold20
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    IGCSE_PAPER-1_Student Notes-11

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    25 views1 page

    IGCSE - PAPER-1 - Student Notes-11

    Uploaded by

    bhingaraarchibold20

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    Compiled by : Shyam Subrahmanya

    5.2 Digital Currency

    Digital Currency

    Digital Currency
    A digital currency is a type of currency that exists only in electronic form and is not backed by
    any physical commodity or government.
    Only Exists Electronically
    Digital currencies are purely electronic, meaning they do not exist in physical form like
    traditional currencies such as cash or coins. They are stored in digital wallets or
    accounts and can be transferred electronically between individuals or businesses
    Decentralised
    Many digital currencies operate on a decentralised network; meaning that they are not
    controlled by any central authority like a government or financial institution
    Instead, transactions are verified and recorded on a public ledger known as a
    blockchain
    Used for Transactions
    Digital currencies can be used for various transactions, including purchasing goods
    and services online or transferring money internationally
    They can also be used for investments or as a store of value
    Volatile
    Digital currencies can be highly volatile; meaning their value can fluctuate rapidly over
    short periods of time
    This can make them risky investments and can also make it difficult to use them as a
    stable store of value
    Examples include Bitcoin, Ethereum, Litecoin, and Ripple

    Blockchain
    Blockchain is a digital ledger that records every transaction made with a particular digital
    currency
    Each transaction is time-stamped and added to the blockchain in a permanent and
    unalterable way
    Blockchain is a decentralised technology, meaning that it is not controlled by a single entity
    or authority
    Instead, every participant in the network has a copy of the ledger and can verify the
    transactions independently
    The blockchain is made up of "blocks" of transactions that are linked together in a "chain"
    using cryptographic algorithms
    This creates a secure and tamper-proof record of every transaction made with the
    digital currency
    Each transaction in the blockchain must be verified by multiple participants in the
    network
    This verification process ensures that the transaction is legitimate and prevents any
    fraudulent activity

    iGCSE Computer Science(0478) - Paper-1 114 of 127

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