Digital currency and blockchain
Digital currency and blockchain
- Digital currency is money that exists only electronically.
- Its big challenge is trust — stopping the same money being spent twice.
- Blockchain solves this with a tamper-evident shared record.
Digital currency
- A digital currency exists only in electronic form — no coins or notes.
- It is stored and moved between people using computers, and can pay for things online.
- The problem: how do you stop someone spending the same money twice, or changing the records?
Practice
A digital currency is:
Digital currency has no physical coins/notes; it is stored and moved by computers.
Blockchain
- A blockchain is a digital ledger — a shared record of every transaction, copied across many computers, so no one person controls it and it is very hard to change.
- Transactions sit in blocks joined in a chain. Each block holds the data, a timestamp, and a hash value (a code from its contents).
- Each block also stores the previous block's hash. Change an old block and its hash changes, so it no longer matches the next block — the chain breaks and the tampering is spotted at once.
Practice
A blockchain is:
Being shared across many computers means no one controls it and it is hard to alter.
Practice
Each block in a blockchain stores the transaction data, a timestamp, and:
A block holds data + timestamp + its own hash, plus the previous block's hash to chain them.
Practice
How does a blockchain reveal that an old block has been changed?
Changing a block changes its hash; the next block's stored "previous hash" no longer matches, exposing the tampering.
You've got it
Key idea
- digital currency = electronic-only money (no coins/notes)
- a blockchain is a shared digital ledger copied across many computers
- each block holds data + timestamp + hash, and the previous block's hash
- changing a block changes its hash → the chain breaks → tampering is detected