IGCSE Computer Science 0478 — 5.2 Digital Currency Hangman

The 25 key terms

1currency

The money a country or group uses to buy, sell and store value, such as the dollar or the pound.

2physical money

Cash in the form of coins and notes that you can hold in your hand and hand over to pay for things, unlike digital currency, which exists only electronically.

3digital currency

Money that only exists electronically as data on computers. It has no coins or notes, cannot be held in your hand, and is stored and sent using devices.

4digital currency vs cash

Both pay for goods, but digital currency exists only as electronic records in a wallet, sent over a network with a device and connection, while cash is physical coins and notes handed over.

5cryptocurrency

A kind of digital currency, such as Bitcoin or Ethereum, that exists only electronically and is not printed or controlled by a government or central bank.

6digital wallet

Software or an app on a phone or computer that stores a person's digital currency and is used to send and receive it. Losing access to it can mean losing the currency.

7Paying with digital currency

Spending digital currency online or in shops that accept it to buy goods and services. The payment is sent from your wallet app as an electronic transaction.

8peer-to-peer transfer

Sending digital currency straight from one person's wallet to another's over the internet, even in another country, using the receiver's wallet address. No coins or notes are posted.

9investment

Buying digital currency and holding it, hoping its value rises so you can sell it for a profit. Its value can also fall, so you could lose money.

10Advantages 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.

11transaction

A single movement of money from one person to another, such as a payment of an amount from a sender to a receiver. Each one must be recorded.

12ledger

A record book listing every transaction, so you can see who paid whom and how much. It is used to work out balances and keep an accurate history.

13digital ledger

A ledger stored electronically instead of on paper. Records are kept as data on computers, so they are easy to search and copy. Digital currency uses one to track who owns what.

14ledger record

One entry in a ledger that states who sent the money (sender), who received it (receiver) and how much was sent (amount). Each transaction gets its own record.

15time-stamp

The date and time added to a record when it is created, showing when it was made. It puts records in order and shows which happened first.

16immutable

Cannot be changed or deleted once added. A blockchain record stays fixed, so mistakes are fixed by adding a new record and the history stays permanent.

17immutable record

A record that cannot be changed once saved, so no one can cheat by editing an amount or deleting a payment, and everyone can trust the ledger.

18blockchain

A digital ledger: a time-stamped series of records, in order, that cannot be altered.

19block

A group of transaction records saved together with a time-stamp as one unit of the blockchain. When a block is full it is closed, and new transactions go into a new block.

20chain of blocks

Blocks are added one after another in time order. Each new block goes on the end and links to the block before it, so the blocks form a chain.

21decentralised ledger

A blockchain ledger copied on many computers. No one person or company controls it, and a changed copy is spotted by comparing it with the others.

22transaction -> time-stamp -> block -> chain

The order a payment follows: the sender makes it, it is time-stamped, placed in a block, and the block joins the chain, so the record becomes permanent.

23balance

The amount of digital currency a person owns, found by adding up all the money they received and taking away all the money they sent in the blockchain records, in time order.

24double spending

Spending the same digital currency twice. Blockchain stops it: each spent payment is already in the shared ledger, so a second payment of the same money is refused.

25key terms and reasons

A full-mark answer uses digital currency, ledger, time-stamp and blockchain correctly, and links each point to a reason, using linking words such as because or so that.