Digital currency and blockchain Cambridge IGCSE Computer Science revision
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In plain words
A digital currency is money with no notes and no coins. It exists only as records on computers. That raises an obvious problem: what stops someone changing the records to give themselves more? Blockchain is one answer.
5 things to know
- A digital currency is one that exists only electronically. It can be used to pay for goods and services and is transferred electronically.
- A blockchain is a digital ledger: a time-stamped series of records that cannot be altered.
- Each record, or block, holds details of transactions, a time stamp, and a code that links it to the block before it.
- Copies of the ledger are held on many computers. A change to an old block would break its link to the blocks after it, so tampering can be detected.
- Blockchain is used to track the transactions made with a digital currency.
Worked example
Someone tries to change an old transaction in a blockchain to pay themselves more. Why does it fail?
- Each block is linked by a code to the block before it.
- Changing the old block changes its code, so it no longer matches the link stored in the next block.
- The broken chain is noticed when it is compared with the many other copies of the ledger, and the change is rejected.
Tips and tricks
- Use the syllabus words: a blockchain is a digital ledger of time-stamped records that cannot be altered.
- Digital currency is not the same as paying by card. Card payments move ordinary money. A digital currency exists only electronically.
It lands in your notebook with its questions as flashcards.
Digital currency and blockchain: 5 questions and answers
These are the quiz’s questions. Do the quiz first, then come back here for the ones that got you.
What is a digital currency?
There are no notes or coins.
What is a blockchain?
It records transactions.
What is blockchain used for with digital currencies?
Every transaction is recorded in the ledger.
Why is it hard to tamper with a record in a blockchain?
A changed block no longer matches the rest of the chain.
What does each block in a blockchain include?
Along with transaction details and a link to the previous block.
Quiz
5 questions
Tap an answer and you’ll see straight away whether it’s right, and why.
Worksheet
2 questions, 4 marks. Write your answers on paper, then check them.
Digital currency and blockchain
Cambridge IGCSE Computer Science 0478 · 4 marks · papermunch.org
Name ______________________________ Date ______________
State what is meant by a digital currency.[1]
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A currency that exists only electronically.
Describe what is meant by a blockchain.[3]
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A digital ledger. It is a series of time-stamped records of transactions. Once a record has been added it cannot be altered.
Answers: Digital currency and blockchain
- 1. A currency that exists only electronically.
- 2. A digital ledger. It is a series of time-stamped records of transactions. Once a record has been added it cannot be altered.