Topic 5.2 - Digital currency

What is the difference between digital currency and cryptocurrency

Digital currency is the term for a currency which only exists in a digital format while cryptocurrency is a digital currency which is decentralised and and

How does cryptocurrency work

It uses cryptography to track transactions and addresses problems with the centralisation of normal currencies. They work with a blockchain network making htem more secure

What is a blockchain

A decentralised database where many things are stored and uses interconnected computers but not a server. When a change takes place all the computers in the network must give consent creating more security

How is a blockchain constructed

When a new transaction takes place a new block is created. This contains data-such as the name of the sender and recipient, the amount of money, a hash value(A unique value made by an algorithm which acts like a fingerprint), and the previous hash value which points to the previous block