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Digital currency and blockchain

Some money never exists as notes or coins. This unit explains what a digital currency is, what a blockchain is, and how a blockchain keeps track of every transaction.

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What digital currency is

Digital currency only exists electronically Notes and coins physical money Digital currency data on computers Paid and received online, no physical form
  • A digital currency is money that only exists electronically. There are no notes or coins.
  • People use it to pay for goods and services online, or to send money to each other.
  • Cryptocurrencies, such as Bitcoin, are one type. They are not issued by a bank or a government.
  • Because it is just data, there must be a trusted record of who owns what. Many digital currencies use a blockchain for this.

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1. What is a digital currency?

2. In its basic form, what is a blockchain?

3. Why is it hard to change a transaction that is already in a blockchain?

4. Where are copies of a blockchain kept?

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