Cryptocurrency

What are cryptocurrencies and how do they work?

Cryptocurrencies are digital decentralised cash systems. Each transaction is controlled by algorithms and takes place directly between users. The amount of money someone owns is stored in a digital wallet on the computer or the cloud, and is protected by an encryption process.

Elementary (Gale in Context)

This is one of the EPIC databases. EPIC is a collection of reliable databases covering lots of different topics. It’s put together especially for New Zealand school students and helps to answer questions like this. Find articles, pictures or news about cryptocurrencies or bitcoin.

• Enter the keyword 'cryptocurrencies' or 'bitcoin' into the search bar at the top of the page.
• The symbol next to the resource shows the content level. Keep an eye out for yellow boxes.
• Use the 'Search within results' search box to narrow your topic down.

Tips: To get to the EPIC resources you will need a password from your school librarian first. Or you can chat with one of our AnyQuestions librarians between 1 and 6pm Monday to Friday and they will help you online. Some EPIC databases may also be available through your public library.

Britannica School

This online version of the Encyclopedia Britannica is a reliable website with great information.

• Select Secondary and enter the keyword 'Bitcoin'.
• Go to the main Bitcoin (digital currency) article, or another article of your choice.
• Use the Related section to explore more.

Tips: Search words, or keywords, are the most important words in our question. Usually it’s better to leave out small words like ‘the’, ‘a’ and ‘of’ and just choose the main ones, e.g [bitcoin]. We can always change our keywords or add more if we need to.

Khan Academy

This is a free website filled with educational videos on a range of topics, including cryptocurrencies.

• Type the keyword 'cryptocurrency' into the search bar at the top of the page.
• This will bring up a range of videos and articles related to cryptocurrencies e.g Bitcoin: What is it?

Tips: Websites that have .org or .net in the address can have good information, but you need to assess how reliable it is. Check the About us link on the website, if you can find one. That can tell you what the organisation’s mission and values are. For example the About link on the Khan Academy page shows us that Khan Academy is partnered with lots of other reliable organisations, like NASA and MIT (the Massachusetts Institute of Technology, a very prestigious university).

Issues

As cryptocurrencies are becoming more popular, it raises the question of how they should be managed and what risks there are. For example, computer systems being hacked or money transfer errors. All the computers involved in "mining", an important process in Bitcoin, use an enormous amount of energy. The legal status of cryptocurrencies is not always clear. While allowed in New Zealand, some countries have enforced strict laws to ban them. Transactions can be anonymous and untraceable which opens up possibilities for money laundering, tax evasion or the use for criminal activities.

Global Issues in Context

This is another EPIC database with reliable information on worldwide topics. It includes news, global viewpoints, reference materials, information about specific countries, videos and statistics.

• Type 'virtual currency', 'bitcoin' or 'cryptocurrency' into the search bar.
• Change the drop down menu to 'Both Global Issues & Opposing Viewpoints' to get additional results.
• Go into the advanced search and restrict your search to 'Basic' or 'Intermediate' content level.
• Browse through your results. You will see there are different forms of resources eg images, news, magazines etc.

Tips: Many web pages have links to further information or to other recommended sites. Following these links is a great way to find out more. This searching method is called “pearl growing” because you are picking up pieces of sand to make a beautiful pearl!

Books

There are many books that have been written about this topic - check out your local public or school library to see what they have.

Here are some recommended titles:

• Heads up money by Marcus Weeks.
• Bitcoin for the befuddled by Conrad Barski and Chris Wilmer.

SCIS no: 1870135