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Questions and Answers
What is the main purpose of cryptography in cryptocurrency?
What is the main purpose of cryptography in cryptocurrency?
- To secure transactions (correct)
- To create new units
- To be traded on decentralized exchanges
- To reduce risk or increase market exposure
What type of investment is cryptocurrency trading?
What type of investment is cryptocurrency trading?
- A derivative (correct)
- A stock
- A bond
- A mutual fund
What is the risk associated with cryptocurrency trading?
What is the risk associated with cryptocurrency trading?
- Low
- Medium
- High
- Very high (correct)
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Study Notes
- Cryptocurrency is a digital or virtual currency that uses cryptography to secure transactions and to control the creation of new units.
- Cryptocurrency is decentralized, meaning it is not subject to government or financial institution control.
- Cryptocurrencies are traded on decentralized exchanges and can also be used to purchase goods and services.
- Cryptocurrency trading is a type of derivative that allows you to bet on the price movements of a given cryptocurrency.
- Cryptocurrency trading is risky, and can be amplified by using leverage.
- Cryptocurrency options allow investors to reduce risk or increase market exposure.
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