Chapter 2: Cryptocurrency

and Blockchain
Bitcoin
We have a belief that Bitcoin was the world's first
attempt at a digital currency.
But no, prior to Bitcoin many other attempts had been
made to create a truly fungible digital currency
The reason we hear little about these prior attempts is
that they all failed to solve one critical problem a
currency must address - the double spend problem.
Double-spending problem
Double spending is a potential flaw in a digital cash
scheme in which the same single digital token can be
spent more than once.
This is possible because a digital token consists of a
digital file that can be duplicated or falsified.
 This problem was prominent when trying to create a
decentralized currency but was solved by blockchain.
 Blockchain solved this by putting transactions in a
block, verifying each transaction, then adding these
blocks to the chain.
Cryptocurrencies-characteristics
Durable: Does this store of value persist well through time?
• Portable: Is this store of value easy to move around and
transfer?
• Divisible: Is this store of value easy to divide into smaller
sub-units for small payments & transactions?
• Fungible: Is each unit of this store of value equal in value to
any other unit?
• Scarce(insufficient for the demand.): Is this store of value
scarce enough to give it meaningful value?
• Accepted: How widely accepted is this store of value as a
means of payment or settling a debt?
Quiz