Victoria University BAO3404 – Overview Dennice Allen

Cryptocurrency: what is it?

From the Wiki:

A cryptocurrency is a type of currency
which uses digital files as money. Usually,
the files are created using the same ways
as cryptography (the science of hiding
information). ...
Cryptocurrencies use 'decentralized
control', which means that they aren't
controlled by one person or government.
Blockchain technology
Go back to the wiki
A cryptocurrency is a digital or 
virtual currency that is secured by
cryptography, which makes it nearly
impossible to counterfeit or double-
spend.

Many cryptocurrencies are decentralized

networks based on blockchain
 technology—a distributed ledger
enforced by a disparate network of
computers.
What happened
Blockchain isn’t just a database, it’s a new
technology stack with ‘digital trust’ that is
revolutionizing the way we exchange value
and information across the internet, by taking
out the ‘gatekeepers’ from the process.

Go to: https://blockgeeks.com/guides/what-is-
blockchain-technology/
https://blockgeeks.com/guides/what-is-blockchain-technology/
How does it work?

Cryptocurrency is a form of payment that

can be exchanged online for goods and
services. ...
Cryptocurrencies work using a technology
called blockchain.
Blockchain is a decentralized technology
spread across many computers that manages
and records transactions.
Part of the appeal of this technology is its
security.
What are the different types of cryptocurrency?

• Bitcoin is the most well-known virtual currency. Ethereum is a close

second with Dogecoin in third, thanks to a few famous fans. 
• According to Yahoo Finance, the top 10 currencies by volume as of
May 4 2021 were:
• Bitcoin Ethereum
• Binance Dogecoin
• XRP Tether
• Cardano Polkadot
• Uniswap Litecoin
Advantages and Disadvantages
Advantages
• Cryptocurrencies hold the promise of
making it easier to transfer funds directly
between two parties, without the need
for a trusted third party like a bank or
credit card company.
• These transfers are instead secured by
the use of public keys and private keys
 and different forms of incentive systems,
like Proof of Work or Proof of Stake.6
Advantages and Disadvantages
Disadvantages 
• The semi-anonymous nature of cryptocurrency
transactions makes them well-suited for a host
of illegal activities, such as money laundering
 and tax evasion.
• Bitcoin, for instance, is a relatively poor choice
for conducting illegal business online, since the
forensic analysis of the Bitcoin blockchain has
helped authorities arrest and prosecute
criminals.7 More privacy-oriented coins do exist,
however, such as Dash, Monero, or ZCash,
which are far more difficult to trace.
 The first country
The country’s new Digital Currency
Electronic Payment (DCEP) – a digital
payment and processing network run
by the Central Bank of China – and its
digital currency, the digital yuan (e-
CNY), is expected to completely
replace physical cash.
DCEP has one important advantage
over other currency systems – its
digital wallets don’t require an internet
connection to be accessed via smart
phone.
Legal tender
The Bitcoin Law was passed by the
Legislative Assembly of El Salvador on 8
June 2021, giving the cryptocurrency
bitcoin the status of legal tender within El
Salvador after 7 September 2021.
It was proposed by President Nayib
Bukele.
On Tuesday 9th September 2021, El
Salvador became the first country to use
bitcoin as legal tender, alongside the US
dollar.
Not everyone agrees.
https://www.reuters.com/business/finance/el-salvador-leads-world-into-cryptocurrency-bitcoin-
legal-tender-2021-09-07
 The future is uncertain

If you’re interested go to MIT for a free short course – it’s great! https://ocw.mit.edu/courses/sloan-school-of-
management/15-s12-blockchain-and-money-fall-2018/