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Lesson pack · IGCSE Computer Science 0478 · 5.2 · IGCSE

Digital currency and blockchain

Money with no coins. Some money has no notes or coins at all: it exists only as data.

Student lesson Lab, full screen
At a glance

The shape of the lesson

Topic
The internet and its uses
Syllabus reference
Cambridge IGCSE Computer Science 0478, 5.2
Level
IGCSE
Duration
45 minutes, lab-led; stretches to a 60 minute block (see the contingency notes)
Position in topic
Lesson 5 of 7 in The internet and its uses; follows Session and persistent cookies; leads into Cyber security threats
Central model
Fig. 1: each block is linked to the one before by storing that block's hash
Cooperative structure
Assessment
Stage 1 check and the exam-style plenary from the student lesson, plus the worksheet as the exit task
Learning objectives

By the end of the lesson, learners can

Section by section
  • Digital currency: You may already pay by card or phone, but a digital currency goes further: the money itself is only ever data.
  • How a blockchain works: In the lab, look at the chain of blocks and their hashes.
  • Why it cannot be altered: The syllabus describes a blockchain as records that cannot be altered.
Key points to leave on the board
  • Digital currency: only exists electronically.
  • Blockchain: a digital ledger, a time-stamped series of records that cannot be altered.
  • Block: transactions, timestamp, its own hash, previous block's hash.
  • Tampering: hash changes, chain breaks, other copies disagree.
The core visual model

One picture every idea returns to

A digital currency is one that only exists electronically: there are no physical notes or coins. It is used to pay for goods and services and to transfer money between people over the internet. Many digital currencies (cryptocurrencies) track every transaction with a blockchain: a digital ledger, that is a time-stamped series of records that cannot be altered. Each block stores its transactions, a timestamp, its own hash and the hash of the previous block, and copies of the chain are held by every computer in the network.

each block stores the hash of the block before it Block 1Block 2Block 3 A pays B 2B pays C 1C pays D 3 time 09:01time 09:07time 09:12 prev: 0000prev: 7a3fprev: c91e hash: 7a3fhash: c91ehash: 4b08 edit Block 1 and its hash changes, so Block 2 no longer matches
Fig. 1: each block is linked to the one before by storing that block's hash
Lesson sequence

Forty-five minutes, phase by phase

TimePhaseWhat happens in the roomGrouping
0 to 5 minHook: predictOpen with the question in the title, Money with no coins.. Some money has no notes or coins at all: it exists only as data. Put the figure on the board: it is the one picture every idea in the lesson returns to.Whole class, then pairs
5 to 13 minTeach and check: Digital currencyYou may already pay by card or phone, but a digital currency goes further: the money itself is only ever data.Whole class, then pairs
13 to 21 minTeach and check: How a blockchain worksIn the lab, look at the chain of blocks and their hashes. Project tab 4 of the lab (Breaking a blockchain) and let a student drive it while the class predicts.Pairs
21 to 30 minTeach and check: Why it cannot be alteredThe syllabus describes a blockchain as records that cannot be altered. Model the worked example Tracing a change on the board, one line at a time.Connect-Extend-Challenge
30 to 36 minCheckThe four Stage 1 questions from the student lesson, answered on mini whiteboards or by show of fingers. Re-teach the one most get wrong.Individual, then whole class
36 to 43 minPlenaryThe exam-style questions from Stage 2, one at a time: thirty seconds alone, then a random call. The feedback lines in the key give the examiner's wording.Individual, random call
43 to 45 minExit and homeworkSet the worksheet below (6 questions, 14 marks). Learners self-assess against the objectives before they leave.Individual
Timing and contingency

Protect the parts that carry the learning

The sequence carries about fifty minutes of material, so the lab is driven by one student while the class predicts rather than explored freely. Times are a guide.

Protected: the check at 30 minutes. It is the only individual read on whether the key idea landed, and it is not cut.

Cut first if the build overruns: the last check in Why it cannot be altered, never the check or the plenary.

In a 60 minute block: run worksheet questions 1 to 3 in class as a Rally Coach set and model both the hardest worked example and its check live.

Running the cooperative task

Connect-Extend-Challenge

After the new idea, each student writes three lines: how it connects to what they knew, how it extends their thinking, and what still challenges them. Pairs compare, then the challenges become the plenary.

The full structure, with its variations and the other twelve, is on the cooperative-learning page.

Examiner traps to pre-empt

What to head off, and how

Trap learners fall intoTeaching move that pre-empts it
Do not describe a digital currency as "money paid with a bank card".The key point is that the currency only exists electronically.
Blockchain does not stop transactions being made, and it is not encryption of the money.It makes the record of transactions tamper-evident and permanent.
Worksheet

Digital currency and blockchain: worksheet

6 questions, 14 marks. Written in the style of the papers; no past paper question is reproduced.

NameClassDate
Q1 · recall[1 mark]

State what is meant by a digital currency.

Q2 · explain[2 marks]

Describe two ways a digital currency can be used.

Q3 · explain[4 marks]

Describe how blockchain is used to track digital currency transactions.

Q4 · explain[3 marks]

Explain why a transaction recorded in a blockchain cannot be altered.

Q5 · recall[2 marks]

Identify two items of data stored in each block of a blockchain, other than the transactions.

Q6 · analysis[2 marks]

A student says: "Blockchain keeps digital currency safe because it encrypts the money." Explain why this is not an accurate description.

Answer key and marking notes
Q1 · 1 mark

A currency that only exists electronically (it has no physical form).

Q2 · 2 marks
  • To pay for goods and services (online or in shops that accept it).
  • To transfer money directly to another person over the internet (from a digital wallet).
Q3 · 4 marks
  • Blockchain is a digital ledger / a time-stamped series of records.
  • Each new transaction is checked / verified by computers in the network and added in a new block with a timestamp.
  • Each block stores the hash of the previous block, linking the blocks in a chain.
  • Every computer in the network holds a copy, so all transactions are recorded permanently and can be traced.
Q4 · 3 marks
  • Altering the data in a block changes that block's hash.
  • The next block stores the old hash, so it no longer matches and the chain is broken.
  • The altered copy also differs from the copies held by the other computers, so the change is detected / rejected.
Q5 · 2 marks
  • A timestamp.
  • The hash of the block / the hash of the previous block (either).
Q6 · 2 marks
  • Blockchain is a ledger / record of transactions; it does not encrypt the currency.
  • It keeps the currency trustworthy because the time-stamped records cannot be altered without detection.
Quiz

6 multiple-choice questions on this lesson

From the topic question bank. Assign them in the app for a marked score in your gradebook, or run the topic as a class game.

Q11 mark

What is a digital currency?

  • AA currency that only exists electronically
  • BAny money that is paid using a bank card
  • CBanknotes that have been scanned and stored on a computer
  • DA currency that can only be spent in one country
Q21 mark

Which list shows what each block in a blockchain stores?

  • ATransactions, a timestamp, its own hash and the previous block's hash
  • BTransactions and the passwords of everyone involved
  • CA timestamp and the IP address of every computer in the network
  • DIts own hash and a copy of every other block in the chain
Q31 mark

The diagram shows part of a blockchain. A criminal changes Block 2 to read "B pays C 20", so Block 2's hash is recalculated as 5b02. How is the change detected?

Block 1Block 2Block 3 A pays B 4B pays C 2C pays D 1 Prev: 0000Prev: 3c9ePrev: 81d4 Hash: 3c9eHash: 81d4Hash: f27a
  • ABlock 3 stores previous hash 81d4, which no longer matches Block 2's hash
  • BBlock 2 stores previous hash 3c9e, which no longer matches Block 1's hash
  • CBlock 1's hash changes to 5b02 to match Block 2
  • DIt is not detected, because Block 2 now stores its own new hash
Q41 mark

Who holds a copy of the blockchain for a cryptocurrency?

  • AEvery computer (node) in the network
  • BOnly the central bank of each country
  • COnly the person who made the most recent payment
  • DOne secure server owned by the currency's inventor
Q51 mark

A criminal edits an old transaction on their own computer's copy of a blockchain and recalculates the hashes of every later block so their copy links up again. Why is the change still rejected?

  • ATheir copy no longer matches the copies held by all the other computers in the network
  • BThe blockchain is encrypted, so the criminal cannot read any of the transactions
  • CTimestamps can only be added by a central bank, which spots the change
  • DHashes can never be recalculated once a block has been created
Q61 mark

Which is the most accurate description of how blockchain supports a digital currency?

  • AIt is a time-stamped ledger of transactions that cannot be altered without detection
  • BIt encrypts the money so it cannot be stolen
  • CIt stops users from making transactions without a bank's approval
  • DIt converts the digital currency into banknotes when needed
Quiz key
Q1: A

A digital currency has no physical form: it exists only as electronic records. Paying by bank card moves ordinary money that also exists as notes and coins. Scanned banknotes are just images, and digital currencies can be sent anywhere in the world over the internet.

Q2: A

Each block holds a group of transactions, a timestamp, its own hash and the hash of the previous block, which links it into the chain. Blocks do not store users' passwords or the IP addresses of the network's computers, and a single block does not hold copies of all the other blocks.

Q3: A

Block 3 still records 81d4 as its previous hash, but Block 2's hash is now 5b02, so the link is broken and Block 3 and everything after it become invalid. Block 1 was not changed, so its hash is still 3c9e and still matches Block 2's previous hash. Changing Block 2 does not alter Block 1. Recalculating Block 2's own hash does not hide the change, because the next block disagrees (and so do the other computers' copies).

Q4: A

Every node in the network holds a copy of the whole chain, so there is no single central copy to attack or alter. Cryptocurrencies are not controlled by a central bank, and the ledger is not kept by one person or one server.

Q5: A

The blockchain is distributed: thousands of other computers hold the original chain, so the altered copy disagrees with all of them and is rejected. A blockchain is a ledger, not encryption of the transactions. There is no central bank stamping blocks, and hashes can be recalculated by anyone; what cannot be done is make every other copy agree.

Q6: A

Blockchain is a digital ledger: a time-stamped series of records, linked by hashes and held by every node, so past transactions cannot be altered unnoticed. It does not encrypt the money, it does not need a bank's approval (cryptocurrencies are not controlled by a central bank), and a digital currency has no banknotes to convert to.

Lab and demo

What to project

The student lesson embeds these tabs. Open them full screen on the projector; every slider has a drag handle on the stage.

Slides

Slides for this lesson

A projectable deck for every pack is on the way. Until then, present the student lesson full screen: its sections, figure and lab tabs follow the same order as the plan above.

Also for this topic

Everything else you can use

Original work by the TheLucidSTEM team. The worksheet items are written in the style of the papers; no past paper question is reproduced.
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