IGCSE - 5.2 - Digital Currency

Front

What is a digital currency?

Back

A currency that only exists electronically

Front

Why do some people prefer digital currencies over traditional money?

Back

To avoid inflation and maintain purchasing power

Front

How are transactions made using a digital currency?

Back

By sending coins from one digital wallet to another

Front

What is the purpose of the blockchain in digital currencies?

Back

To keep track of transactions in a digital ledger

Front

How are digital currencies created?

Back

By mining or pre-mining coins

Front

Why are some digital currencies faster than others in processing transactions?

Back

Due to the blockchain technology

Front

What happens if you send digital coins to the wrong wallet address? Options: The coins are frozen until the error is corrected, The coins are returned to you automatically, The coins are lost forever, The coins are transferred to the correct address

Back

The coins are lost forever

Front

Why do some people associate digital currencies with crime?

Back

Due to the anonymity of transactions

Front

What is the role of miners in creating new digital coins?

Back

To confirm transactions and receive rewards

Front

What is the main advantage of a decentralized network in digital currencies?

Back

Independence from financial institutions