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Questions and Answers
What is the definition of a cryptocurrency, according to Investopedia?
What is the definition of a cryptocurrency, according to Investopedia?
A cryptocurrency is a digital or virtual currency secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.
What is the name of the first cryptocurrency?
What is the name of the first cryptocurrency?
Bitcoin
What is the meaning of "altcoins"?
What is the meaning of "altcoins"?
Cryptocurrencies introduced after Bitcoin
What is the primary function of "Protocol Tokens"?
What is the primary function of "Protocol Tokens"?
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What is the function of "Utility Tokens"?
What is the function of "Utility Tokens"?
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What is the primary role of "Security Tokens?"
What is the primary role of "Security Tokens?"
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What kind of asset are "Stable Coins" tied to?
What kind of asset are "Stable Coins" tied to?
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What is the meaning of "NFT"?
What is the meaning of "NFT"?
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What is the primary benefit of a smart contract?
What is the primary benefit of a smart contract?
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What is the limitation of smart contracts due to their immutable nature?
What is the limitation of smart contracts due to their immutable nature?
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What does DAO stand for?
What does DAO stand for?
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What is the key aspect of ID management in blockchain technologies?
What is the key aspect of ID management in blockchain technologies?
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What does ZKP stand for, and what is its benefit?
What does ZKP stand for, and what is its benefit?
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What are the three primary aspects of the Blockchain Trilemma?
What are the three primary aspects of the Blockchain Trilemma?
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Which of these is NOT a major advantage provided by blockchain technology?
Which of these is NOT a major advantage provided by blockchain technology?
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What are some key industries that blockchain technology is revolutionizing?
What are some key industries that blockchain technology is revolutionizing?
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The blockchain revolution will not radically transform the financial sector.
The blockchain revolution will not radically transform the financial sector.
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What are some specific ways blockchain technology is improving the supply chain?
What are some specific ways blockchain technology is improving the supply chain?
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Describe some applications of blockchain in healthcare.
Describe some applications of blockchain in healthcare.
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What are some ways that blockchain technology is revolutionizing the real estate market?
What are some ways that blockchain technology is revolutionizing the real estate market?
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Match the following blockchain concepts with their corresponding benefits:
Match the following blockchain concepts with their corresponding benefits:
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Study Notes
Chapter 3: Blockchain Applications
- Cryptocurrencies are digital or virtual currencies secured by cryptography, making counterfeiting nearly impossible.
- Bitcoin was the first cryptocurrency, created in 2008 and now dominates the market with the largest market capitalization. Other cryptocurrencies launched after Bitcoin are called altcoins.
- Crypto assets are cryptographically secured digital representations of value or contractual rights, using distributed ledger technology, transferrable electronically.
- Crypto assets include seven categories:
- Cryptocurrencies (e.g., Bitcoin, Litecoin): similar to traditional currencies for payments.
- Protocol tokens: enable decentralized applications (dApps), transaction fees based on utilized resources.
- Utility tokens: fund projects (e.g., Initial Coin Offerings - ICOs), used with dApps.
- Security tokens: represent ownership in real-world assets (e.g., shares, bonds, real estate).
- Stable coins: aim for stable prices, often backed by traditional currencies (e.g., USD). Facilitate exchanges and enhance market efficiency.
- Examples: USDT, USDC, DAI.
- Crypto collectibles/NFTs: unique/indivisible tokens, can be 100% virtual or based on real-world assets. Examples: Bored Ape Yacht Club, real estate.
- Natural assets tokens: simplify trades of raw materials and natural resources (e.g., gold, silver).
Smart Contracts
- Smart contracts are self-executing programs automating contract actions, trackable and irreversible.
- Main steps: pre-defined contract terms, triggered events, automated execution, and settlement on blockchain.
- Benefits: trust, security, accuracy, efficiency, and cost savings.
- Limitations: irreversible mistakes, complexity, high execution costs, and legal hurdles.
Decentralized Applications (dApps)
- dApps are software programs running on blockchain or peer-to-peer (P2P) networks.
Decentralized Autonomous Organizations (DAOs)
- DAOs operate with no central authority, governed by smart contracts. Token holders participate in decision-making.
ID Management
- Decentralized Identity Management (DID) allows users control over personal data, enables interoperability, reduces fraud, and offers direct validation.
Zero-Knowledge Proofs (ZKP)
- ZKP allows verifying information securely without fully revealing it.
- Benefits include higher privacy and trust, enhanced security, and limiting leak risks.
Blockchain Layers
- Blockchains have five layers: hardware, layer 0 (foundational networks), layer 1 (consensus networks), layer 2 (enhanced scalability networks), and application layers.
Blockchain Trilemma
- The trilemma balances scalability, decentralization, and security; growth (scalability) is achieved while speed and low costs are maintained.
Decentralization and Protection
- Decentralization distributes control across nodes, enhancing protection against hacks (e.g., 51% attacks).
Use Cases of Blockchain
- Blockchain has applications in various sectors including supply chain, healthcare, real estate.
- Uses such as tracking assets, enabling real-time tracking, managing properties, anti-counterfeiting, and managing epidemic tracking are examples.
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Description
Test your knowledge on the basics of cryptocurrency and blockchain technology. This quiz covers definitions, functions of different types of tokens, and the implications of smart contracts. Explore key aspects of blockchain that are revolutionizing various industries.
