← IGCSE Computer Science Paper 1

Advantages and risks of digital currency

Digital currency is fast and easy to send, but its value can change quickly, hackers can steal it, a lost password loses access, and not every shop accepts it.

Part of: IGCSE Computer Science 0478 — 5.2 Digital Currency — Module 10

Understanding Advantages and risks of digital currency in IGCSE Computer Science Paper 1

What it does: With no password there is no access to the wallet, so the coins are lost. This is the lost wallet or password risk. If a shop does not accept digital currency, the customer must use another way to pay, such as cash. Digital currency transfers are fast because they are sent over the internet, often in minutes, with no need to visit a bank. Digital currency prices can rise and fall a lot in a short time, so you could lose money even if nobody steals anything. Hackers can break into wallets or exchanges. Scams can also trick people into sending their currency away.

Common mistakes: An IF statement must end its condition with THEN. The line should be IF sent = TRUE THEN. The value of the coins fell from 100 to 60. The loss is the old price minus the new price (40). Reversing it gives -40, which hides the loss. It should be loss ← oldPrice - newPrice.

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Learning
Duo
Which is an advantage of digital currency?
Money can be sent to another person very quicklyMoney can only be sent during bank opening hours
Matches
Digital currency always keeps the same value, so it has no risk
↓
Wrong: the value of digital currency can rise and fall quickly, so there is a risk of losing money.
Applying
Meanings
Term
Advantages and risks
Meaning
Digital currency is fast and easy to send, but its value can change quickly, hackers can steal it, a lost password loses access, and not every shop accepts it.
Practice
valueToday ← 500
Testing
Gaps
IF passwordLost = THEN
Check Answer
Spots
2speed ← "fast"
3IF sent = TRUE

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Quick Questions

1. Which is an advantage of digital currency?
A. Money can be sent to another person very quickly ✓
B. Money can only be sent during bank opening hours
Digital currency transfers are fast because they are sent over the internet, often in minutes, with no need to visit a bank.
2. A student buys digital currency. Next week its value drops sharply. Which risk is this?
A. The wallet was hacked
B. The value can change quickly ✓
Digital currency prices can rise and fall a lot in a short time, so you could lose money even if nobody steals anything.
3. Which statement about hackers is correct?
A. Hackers may steal digital currency from a poorly protected wallet ✓
B. Digital currency can never be stolen because it is digital
Hackers can break into wallets or exchanges. Scams can also trick people into sending their currency away.
4. A user forgets the password to their digital wallet and has no backup. What is the likely result?
A. The bank will reset it and return the money
B. They may lose access to their money for good ✓
Many digital wallets have no bank to help. If the password or key is lost, the money can be locked away forever.
5. Which is a risk of digital currency when shopping?
A. Not every shop accepts it as payment ✓
B. Every shop must accept it by law
Digital currency is still not accepted everywhere, so it may be less useful than cash or cards for everyday buying.

Match the Pairs

value = 100 * rate → The worth of a digital currency can change quickly because the exchange rate changes
send(coins, friend) → Digital currency can be transferred quickly to another person, often in minutes
A lost password can mean permanent loss of access to the wallet and the coins in it → if password == lost: access = False
Not every shop accepts digital currency, so it cannot always be used to pay → if shop_accepts == False: pay = cash
Digital currency always keeps the same value, so it has no risk → Wrong: the value of digital currency can rise and fall quickly, so there is a risk of losing money.
Hackers cannot steal digital currency because it is digital → Wrong: hackers and scammers can steal digital currency, for example by breaking into a wallet or tricking the owner.

Key Term

Advantages and risks
Digital currency is fast and easy to send, but its value can change quickly, hackers can steal it, a lost password loses access, and not every shop accepts it.

Fill in the Blanks

1. IF passwordLost = TRUE THEN OUTPUT "Access to wallet lost" ENDIF
Hint: Type the Boolean value that means the owner has lost their password
2. IF newPrice < oldPrice THEN OUTPUT "Value has fallen" ENDIF
Hint: Type the comparison operator that checks the new price is lower than the old price
3. IF hackerGotKey = TRUE THEN OUTPUT "Coins stolen" ENDIF
Hint: Type the keyword that starts the code to run when the condition is true
4. IF shopAcceptsCrypto = FALSE THEN OUTPUT "Use another payment method" ENDIF
Hint: Type the pseudocode keyword that displays a message to the user
5. IF transferTime < 60 THEN OUTPUT "Fast transfer" ENDIF
Hint: Type the keyword that closes the selection block

Spot the Error

Question 1
A sent ← TRUE
B speed ← "fast"
C IF sent = TRUE
D OUTPUT "Arrives in seconds"
E ENDIF
Line C — An IF statement must end its condition with THEN. The line should be IF sent = TRUE THEN.
Question 2
A coins ← 2
B oldPrice ← 100
C newPrice ← 60
D loss ← newPrice - oldPrice
E OUTPUT loss
Line D — The value of the coins fell from 100 to 60. The loss is the old price minus the new price (40). Reversing it gives -40, which hides the loss. It should be loss ← oldPrice - newPrice.
Question 3
A emailSafe ← "FALSE"
B IF emailSafe = FALSE THEN
C OUTPUT "Do not click link"
D ENDIF
Line A — FALSE is a Boolean value, not a string. Putting it in quotes makes it text, so the test emailSafe = FALSE does not work as intended. It should be emailSafe ← FALSE.
Question 4
A password ← "blue77"
B OUTPUT guess
C IF guess <> password THEN
D OUTPUT "Locked out"
E ENDIF
Line B — The program needs to read the user's password attempt, so it must use INPUT guess. OUTPUT guess would display a variable that has no value yet.
Question 5
A shopTakes FALSE
B IF shopTakes = TRUE THEN
C OUTPUT "Pay with coins"
D ELSE
E OUTPUT "Use cash"
F ENDIF
Line A — The assignment arrow is missing, so the variable is never given a value. It should be shopTakes ← FALSE, showing the shop does not accept digital currency.

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