IT2864 Blockchain & Distributed Ledger Technologies (Week 5)

What is cryptocurrency?

• Physically stored in online wallet

• Digital / virtual money that is created and stored electronically in the blockchain

What are the properties of cryptocurrency? (Choose 3)

• Decentralized network

• No physical form

• Distributed ledger technology

• No intrinsic value

• Not controlled by any government or central bank

Bitcoin is a...

• blockchain

• proof-of-work

• cryptocurrency

• mining mechanism

What do miners do? (Choose 2)

• Write new blocks onto the blockchain

• They look at proof-of-work and scrutinize transactions

• Try to be the first to solve "cryptographic puzzle"

• Helps the transaction owners get block rewards

How does blockchain adjust difficulty of mining? (Choose 2)

• By pumping in more electricity to prevent others from getting the hash

• By changing the difficulty every 2016 blocks / 2 weeks

• The range of solutions will be adjusted

• Rewards are halved every 210,000 blocks created

What a block must contain? (Choose 3)

• Previous hash

• Current hash

• Next hash

• transactions

• nonce

What is a block reward?

• The transaction fees

• First to solve "cryptographic puzzle" gets the reward

• All miners will transfer coins to the winner

What is a transaction fee?

• Block reward

• Fee for every transaction for miners after creating block

• Fees that miners give to transaction owners after creating block

(1) Mining pool and (2) memory pool (Choose 2)

• (1) Big companies and (2) Small companies

• (1) Group of miners and (2) transactions in a pool

• (1) Share block rewards and (2) Miners pick higher transaction fees

• (1) Less computing power and (2) more rewards

What causes orphan blocks to be created?

• A lot of transactions are created

• Block rewards are not given to miners who are in the orphan blocks

• When another "valid" block is solved nearly the same time