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1. Beginner Course

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  1. 1. What are these cryptocurrencies?
  2. 2. Bitcoin - the story of a technological revolution
  3. 3. Satoshi Nakamoto, who is the creator of Bitcoin?
  4. 4. Vitaly Buterin – the creator of Ethereum
  5. 5. What is Blockchain, and how does it work?
  6. 6. What is an NFT token?
  7. 7. What is money?
  8. 8. Cryptocurrencies vs fiat money, which will win?
  9. 9. What is DeFi (Decentralized Finance)?
  10. 10. DeFi: opportunities, advantages and disadvantages of decentralized finance
  11. 11. What is an altcoin?
  12. 12. Stablecoins - What are they?
  13. 13. Cryptocurrency wallet - what is it?
  14. 14. Why do we talk about bull and bear markets?
  15. 15. Security in the crypto market - what rules are worth following?
  16. 16. What is the seed phrase in cryptocurrencies?
  17. 17. Dogecoin and memecoin - what are they?
  18. 18. What is a Ponzi scheme?
  19. 19. What is Ethereum? 
  20. 20. What is a soft and hard fork?
  21. 21. Blockchain - examples of use
  22. 22. Is blockchain safe?
  23. 23. Smart Contracts - what are they?
  24. 24. Liquidity pools in the cryptocurrency market
  25. 25. What is cryptocurrency mining?
  26. 26. What is the mining difficulty?
  27. 27. Inflation and its effects on financial markets
  28. 28. What is compound interest, and how does it work?
  29. 29. Cryptocurrency wallet diversification
  30. 30. Blockchain and NFT games - how to make money on them?
  31. 31. Decentralized Apps – what are they?
  32. 32. What is Proof of Work (PoW) and what is Proof of Stake (PoS)?
  33. 33. What is the Proof of Authority (PoA) consensus mechanism?
  34. 34. What is Proof of Burn (PoB)?
  35. 35. What is CBDC - central bank digital money?
  36. 36. What is Cryptocurrency Airdrop all about?
  37. 37. What are the types of blockchain networks?
  38. 38. Key differences between ICO, IEO and STO
  39. 39. What is IoT - the Internet of Things?
  40. 40. What is the difference between Circulating Supply and Total Supply?
  41. 41. Everything you need to know about gas fees in Ethereum!
  42. 42. The most important cryptocurrency acronyms/slang you need to know!
  43. 43. Halving Bitcoin - what is it, and how does it affect the price?
  44. 44. What is the Fear and Greed index for cryptocurrencies?
  45. 45. APR versus APY: what is the difference?
  46. 46. Snapshot from the world of cryptocurrencies - what is it?
  47. 47. Know your customer (KYC) and Anti-money laundering (AML) what are they in the cryptocurrency industry?
  48. 48. What is a whitepaper? What is its purpose, and how do you write it?
  49. 49. How do you transfer cryptocurrencies?
  50. 50. What is EURT? How does it work?
  51. 51. What is Regenerative Finance (ReFi)?
  52. 52. Bitcoin Pizza Day
  53. 53. What Is Stagflation and Why Does It Have a Negative Impact on the Market?
  54. 54. What are decentralized DAO organizations, and how do they work? What are DAO tokens?
Lesson 35 of 54
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35. What is CBDC – central bank digital money?

We are witnessing that money is no longer cash. It is becoming more online and digital. Will cash become a thing of the past? Who knows? The CBDC’s new central bank money will improve financial inclusion at the same time, but it also confronts us with a kind of threat. What’s more, Central Banks are considering their issuance of digital currency. So, what is CBDC?

As the name implies, digital currency is electronic money rather than the physical currency we have dealt with so far. The digital currency of a central bank is an electronic version of its native currency – the dollar, euro, zloty, yuan, etc.

As the Central Bank in the UK explains, 10 paper pounds will be worth the same as 10 pounds of British electronic currency.

The central banks of a country are responsible for issuing and managing CBDCs. They are the peculiar “authorities” of a country, regarding monetary policy. At the same time, they guarantee that digital money is devoid of any risk.

Many Central Banks also emphasize that CBDCs do not have as much volatility than private cryptocurrencies such as Bitcoin, Ethereum, or Ripple. Why? Because, as the banks justify, digital currency is tied to a country’s national currency.

Interestingly, according to the USC Federal Reserve, CBDC will be “the safest digital asset available to the public without credit or liquidity risk.” Well interesting.

How does central bank money work?

The digital currency of the central bank is to be stored in an account or in the form of electronic tokens. As a result, to pay for their purchases, for example, people will not use cash or cards, but transfers and tokens.

Electronic tokens would be stored on mobile devices, prepaid cards or in the form of a digital wallet. The Central Banks also emphasize that the CBDC would be used by financial institutions and even businesses!

Advantages of CBDC

  1. Privacy. It is to be the most important feature of CBDC and the entire related project. The digital currencies are to be configured in such a way as to ensure the protection of user data, right from the design stage.
  2. Greater control of personal data and security. According to CBDC researchers, if the development of digital currencies follows a data-protection-by-design and by-default approach, digital currencies will enhance data protection and security for all digital payments. At the same time, they will give payers control over their personal data.
  3. Anonymity in the payment process. Digital currencies are to use technologies that enhance the entire anonymity process. Interestingly, all anonymity is at the same time to enable control in illegal cases: money laundering, terrorist financing or non-payment of taxes.

Disadvantages of CBDC

  1. Our data will be available to Central Banks. Consequently, contrary to the anticipated advantages, our privacy will be at risk. Why? Having such an amount of sensitive data in one place, is a tasty morsel for cybercriminals.
  2. Poorly chosen technological infrastructure, can expose our data to leakage. And not just at the time of payment, although researchers put the most emphasis on this point. All it takes is a mistake in one algorithm for something to go wrong.
  3. User trust. And not only that, related to security issues. The vast majority of users are not enthusiastic about CBDCs. Citing the excessive control that regulators would then have over insights into transactions.

CBDC vs. society

Behind the scenes, it is heard that digital currencies will be a fast, easy, yet secure way to make payments, made by users. At the same time, they are supposed to give more choice as to how to pay. They are also supposed to increase financial inclusion.

However – is the secret really out? Consider, for example, the fact that almost 1.7 billion people around the world don’t even have a bank account. Cash is the only form of payment they make.

What’s more, the failure of any payment system or our token application will mean that without cash, we won’t have anything with which to pay a given fee. Considering the above, is CBDC really that friendly to the public?

Of course, central bank digital money is a great way to reduce financial crime. Cash is untraceable, CBDCs are. It is true that digital currencies will improve the transparency of money transfers.

How many countries are considering introducing CBDCs?

According to the Atlantic Council’s Central Bank Digital Currency Tracker, over 100 countries are exploring digital currency.

Some of them, are already in the process of adopting CBDC. These include Nigeria, China, Jamaica, and the Bahamas, among others. Some countries are still exploring digital currencies, and are not committing to introducing them.

CBDC – challenges

There are certainly a lot of them, before the Central Banks. Many societies lack confidence and conviction in digital currency. In Ecuador, lack of trust in the central authority caused the digital currency to be withdrawn three years after its launch.

Another very significant challenge, from the user’s perspective, is cybersecurity. As we wrote above, storing data in one place is a real morsel for hackers. As the World Economic Forum points out, forgery, theft, or network failure can have far greater consequences than in the case of cash trading.

Countries that want to introduce CBDCs, must also have the necessary technical and legal capabilities before they start issuing digital currency on a wider scale.


The subject of CBDC is interested, but it is still developing. Central Banks are not yet fully unified and have no clear idea how to do it on a global scale. What’s more, countries that have already introduced digital currency are having trouble adopting it. The idea does not convince most people. How the topic will develop – we are curious ourselves.