Chapter 9: Digital Currencies & Blockchain

Section A: True or False Questions.

1. Digital currencies or known as e-money fulfills all the uses of traditional forms of
money.
2. Digital currencies only exist on the internet and completely tangible.
3. Cryptocurrency encountered a problem knows as “double-spending”.
4. Many cryptocurrencies are centralized network based on blockchain.
5. Cryptocurrencies are commonly prone towards double spending issues.

Section B: Essay Questions.

6. Identify and discuss 4 advantages of the utilization of cryptocurrencies.

7. Evaluate any FOUR (4) disadvantages of Cryptocurrencies.
8. Differentiate between a Digital Currency and a Cryptocurrency.

Section C: Short Answer Questions.

9. __________ is the master ledger that records and stores all prior transactions and
activities of a cryptocurrency.
10. A __________ transaction isn’t finalized until it is added to the blockchain.
11. A blockchain is a _________ system with no central authority managing data flow.
12. _________ utilized part of the time stamp in the hashing algorithm of the following
block.

1. T
2. F
3. T
4. F
5. F
6. Ready to trade with low transaction fees: Cryptocurrencies often have no fees or very
low fees

High transparency:the cryptocurrency is created based on a blockchain where we can

view all transactions.

Freedom from inflation: When any kind of new currency is issued, it is already decided
how many crypto coins will be developed. When it is fixed once then no one can exceed
them. Like Bitcoin, only 21 million Bitcoins can be mined and no one can increase its
number.

Easy transmission: When transferring money between two countries, traditional

currencies go through multiple systems and are often subject to national and regional
policies and laws, which can make the entire transfer process time-consuming.
 Cryptocurrencies enable efficient transfers between users in different countries and
regions of the world.
7. Lost then not recoverable: Cryptocurrency passwords, if once lost, then you cannot get
them back again. If it is lost, then you can't recover it. Until now, many lost
cryptocurrencies, no one can access them

The transaction cannot be traced: it cannot be traced because it uses a decentralized

network and because it is not regulated by any organization or any central bank, we
cannot trace it. It leads to a lot of illegal actions

The potential for tax evasion exists in some jurisdictions: Because cryptocurrencies are
not regulated by national governments and often exist outside of direct government
control, some people may use cryptocurrencies for illegal tax evasion

High price volatility and potential for manipulation: Many cryptocurrencies have
relatively few units in circulation and are concentrated in the hands of a few individuals.
These holders effectively control the supply of these currencies, making them
susceptible to significant price manipulation resulting in losses to other people's
interests
8. Digital currency is simply a form of money that can be traded in place of existing
currency in circulation, with all transactions occurring under the supervision of banks
and governments.
Cryptocurrency is a is a type of currency created using the principles of cryptography, he
is a type of digital currency, but cryptocurrencies are usually not subject to any
regulation, while cryptocurrencies are difficult to track and have a high degree of privacy

9. Blockchain
10. Cryptocurrency
11. peer-to-peer
12. Bitcoin