2008 Financial Crisis and Bitcoin Overview

A financial crisis where interbank markets froze, impacting liquidity.

The collapse of Lehman Brothers in September 2008 triggered a major market downturn.

A belief that large financial institutions cannot collapse without causing systemic damage.

The reduced confidence in centralized systems following financial failures.

A financial setup without a central authority, exemplified by Bitcoin.

The pseudonymous creator of Bitcoin and author of its white paper in 2008.

A document proposing a peer-to-peer electronic cash system, laying the groundwork for Bitcoin.

A decentralized digital ledger that records transactions securely without third parties.

A type of currency that exists only in digital form.

Secures transactions, verifies transfers, and controls currency creation.

A system without a central authority, unlike traditional banks.

A distributed database of records, secured through consensus.

Once recorded, transactions cannot be altered or reversed.

A collection of transaction data stored in the blockchain.

A process to achieve agreement among network participants.

A mathematical function that converts input into a fixed-size string of bytes.

Advocacy for privacy through technology in personal communications.

Issues like corruptibility and single point of failure in financial systems.

To create an electronic payment system as reliable as cash.

Cash transactions are non-reversible, require no trust or fees.

Bitcoin proposed by Satoshi Nakamoto in October 2008.

First real-world transaction using Bitcoin for two pizzas.

First regulatory guidance issued in March 2013 for virtual currencies.

Bitcoin refers to the network/blockchain; bitcoin refers to the currency itself.

A structure that allows for efficient verification of transactions in a block.

Process of confirming a transaction is included in a block using its details and hash values.

Unique codes generated from transaction data that help verify its integrity in the Merkle tree.

The process of discarding spent transactions to save disk space without affecting the block's hash.

The first half of a transaction's script that verifies the buyer's identity using their private key.

The part of a transaction that specifies what conditions must be met to claim ownership of bitcoins.

Online storage of private keys that allows immediate access but is vulnerable to online threats.

Offline storage of private keys that enhances security by preventing online access.

A nonce is a number used once in cryptographic communication to prevent replay attacks.

Contains block version number, timestamp, previous block hash, Merkle root hash, nonce, and target hash.

The process of creating new bitcoins starts with the Genesis block and has a capped supply of 21,000,000.

Bitcoin rewards for miners start at 50 BTC and are halved approximately every four years.

Miners can also earn bitcoin from transaction fees in addition to block rewards.

The absence of a central authority means there are no transaction fees imposed by a monopolist.

The blockchain operates round-the-clock without restricting trading hours.

Users have greater autonomy over their data without centralized control or gatekeepers.

A change in blockchain software that invalidates some previously valid blocks but is backwards-compatible.

A significant change in blockchain software that makes old blocks invalid and requires all nodes to upgrade.

A situation where a group of attackers gains majority control (over 50%) of the network's mining power.

The financial investment needed to acquire enough mining power to execute a 51% attack.

The misconception that Bitcoin's supply is fixed at 21 million, when it can technically be altered by code changes.

A measure of how many calculations a Bitcoin mining machine can perform each second.

Financial disruption caused by events like attacks or rogue actions against currencies.

The assertion that the system remains secure as long as honest nodes control more computational power than attackers.