Crypto
Andrea Alms Video: Money In Motion 139 - What Is It... "Crypto" Part 6 Terminology - Stablecoins
December 2024 - Crypto
TRANSCRIPT
Hello, my name is Andrea Alms I am a technology investor and financial manager and this is your Money in Motion. Welcome to our series on cryptocurrency or crypto. As a review, Crypto is a digital currency that uses cryptography to enable secure transactions. Without a central bank. Reviewing some key characteristics... no central authority, and so on. Bottom line... no guardrails and risky.
On the last episode, we introduce this organizational chart of the crypto ecosystem. There's much confusion. So again today we focus on terminology. What is crypto coin? A crypto currency coin is native to a blockchain. There is only one coin per blockchain network. What is crypto token? It is a software, technology and software application overlaying the crypto coin. And it is a blind trust system.
What is proof of work? The history of proof of work was to stop spam and attacks on the computational puzzle solving work, or now known as a crypto coin. What is proof of stake? It is a computational work to verify blockchains. Blockchains, also known as network of Computers and transactions. Pos verify blockchains by verifying the machine. Remember that's the computer of the coin owner.
Owners offered their coins, called staking, for the chance to validate blockchains and earn rewards. An example how it works. Ethereum. To become a validator, a coin owner must stake and give up a specific number of coins. For instance, Ethereum requires 30 2ETH to be staked before a user can operate a node. Remember, that's a computer. Blockchains are validated by multiple validators, and when a specific number of validators verify the blockchain is accurate, it is finalized and closed.
Of course, there may be different methods to reach consensus. The crypto ecosystem have their own language, jargon and playing rules despite the complexity. Remember your history and keep them focused. The basics, namely computational puzzles. Solving has value. Thank you. This is your money, your Money in Motion.