2008 Financial Crisis and Bitcoin

Flashcards about the 2008 financial crisis, Bitcoin, and blockchain technology.

What is another name for the 2008 Financial Crisis?

Global Financial Crisis (GFC) or the Great Recession

What were subprime mortgages?

Mortgage loans provided to high-risk borrowers with poor credit ratings or low incomes.

What are mortgage-backed securities (MBS)?

Financial products created by bundling mortgages (including risky ones) and selling them to investors.

What contributed to the failures during the 2008 financial crisis?

Overleveraging of financial institutions, deregulation in the financial industry, and inaccurate ratings of risky mortgage-backed securities by credit rating agencies.

What event triggered panic in global financial markets in September 2008?

Lehman Brothers declared bankruptcy.

What was the result of banks stopping lending to each other?

Severe liquidity shortages and a freeze in credit markets.

What Act authorized the Troubled Asset Relief Program (TARP)?

Emergency Economic Stabilization Act (EESA) 2008

What did the Dodd-Frank Act (2010) in the U.S. establish?

Stricter financial oversight to prevent future crises.

What are some long-term impacts of the 2008 Financial Crisis?

Slower economic growth, increased government debt, ongoing financial regulation, increased inequality, reduced trust in financial institutions.

Against what backdrop did Bitcoin emerge?

Skepticism, frustration, and a yearning for a more transparent financial system in the aftermath of the 2008 Financial Crisis.

Who published the Bitcoin whitepaper?

Satoshi Nakamoto

What is the foundational purpose of Bitcoin?

Empowering individuals and establishing trust through decentralization and transparency.

What is the main function of Blockchain?

A decentralized, immutable digital ledger that records transactions across multiple nodes.

How does Blockchain address the double-spending problem?

By making transaction verification decentralized and ensuring transactions are verified by a network of computers.

What fundamental concept did Blockchain introduce?

Trust through software code, eliminating the need for human oversight.

What are some of the benefits to trust over the internet?

Low-cost communications, lowered business barriers, and improved access to information.

What are some of the challenges of trust over the internet?

Identity verification, service authenticity, and privacy concerns.

What are structured databases?

Databases that store data in an organized and logical manner.

Where do centralized databases reside?

On a high-performance server with access to large storage.

What is the main vulnerability of a Centralized Authority?

Single points of failure and potential security breaches.

What are three main blockchain characteristics?

Decentralized Database, Transaction Validation, and Immutable Records.

What is the maximum number of Bitcoins that can be mined?

21 million

What are the fundamental pillars of monetary value?

Supply, Demand, Utility, and Trust.

What are the steps in a Blockchain transaction?

Broadcast, Validation, Consensus, and Addition

Give some examples of centralized exchanges.

Coinbase, Binance, or Kraken