Cryptocurrencies and uses of the blockchain
What a shared ledger without a trusted third party allows: bitcoin and its capped supply, ether and smart contracts, stablecoins and non-fungible tokens, wallets and exchanges, risks, public and private chains, when a blockchain is justified, and the European MiCA regulation.
- 27 cards
- 6 topics
- Free
The outline, topic by topic
Each topic is weighted the way the exam weighs it.
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A few cards from the deck
Cryptocurrency: what is it?
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A digital asset transferable between people through a shared ledger and cryptography, with no bank or central authority keeping the accounts.
The word "currency" is debated: most do not fulfil the three functions of money well, notably because of their volatility. The MiCA regulation speaks more broadly of crypto-assets.
Why did Ethereum's switch to proof of stake sharply cut its energy use?
- Validators are picked by their token deposit, with no computing race
- Blocks are now validated by the Ethereum Foundation's servers
- The number of transactions per second was divided by a thousand
- Miners use graphics processors that consume less than the old ones
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Validators are picked by their token deposit, with no computing race
In proof of work, machines race on computations to win the right to validate; this competition is what consumes power. In proof of stake, a validator is picked in proportion to what it locks up and risks losing it by cheating: no more race.
The supply of bitcoins is capped at … units, and the mining reward is halved every … blocks.
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The supply of bitcoins is capped at 21 million units, and the mining reward is halved every 210,000 blocks.
This rule is written into the protocol: the creation of new bitcoins slows in steps and should stop around 2140. Miners will then live on transaction fees alone.
Crypto wallet: what is it?
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Software or a device that keeps its owner's private keys and uses them to sign the transactions that spend their crypto-assets.
The assets stay on the chain: the wallet does not hold them, it only holds the key. Losing the private key means losing access, with no recourse and no forgotten-password option.