Crypto 101
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Agreeing on the next block
A blockchain is a shared ledger copied across many computers, called nodes. No bank or company decides which copy is right: a consensus mechanism, rules written into the protocol, sets how nodes propose, check and finalize each new block.
Each block holds the hash of the block before it: a fixed-length fingerprint of that block's contents. Change an old block and its hash changes, so it no longer matches the link in the next one. That is what makes a chain's history so hard to rewrite.
From the report What is a Blockchain Consensus Mechanism?
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Proof of work and proof of stake
In proof of work, miners race to find a hash that meets the network's target, changing a number called the nonce again and again. Winning takes hardware and electricity, which makes taking over most of the network very expensive. Bitcoin works this way and handles about 7 to 10 transactions a second.
In proof of stake, validators lock tokens as collateral instead. Break the rules and part of that stake is slashed. It uses far less energy; Ethereum moved to it at The Merge on 15 September 2022.
From the report What is a Blockchain Consensus Mechanism?
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Bitcoin's halving
Miners are paid for each block in new bitcoin plus the fees in it. Every 210,000 blocks, about every four years, the new-bitcoin part halves. It started at 50 BTC a block.
That schedule caps the supply at 21 million. By mid-July 2026 about 20.06 million had been mined, 95.5% of the total. As the new bitcoin shrinks, miners rely more on fees.
From the report What is Bitcoin Halving? The impact of Bitcoin Halving on the market
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Layer 2 rollups
A Layer 2 runs on top of a main chain, the Layer 1, such as Ethereum or Bitcoin. It processes most transactions itself and sends the data or proofs back to Layer 1, which checks them and keeps the final record.
Rollups, the most used kind, batch many transactions into one. Optimistic rollups such as Arbitrum, Base and Optimism assume a batch is valid unless someone proves fraud; zero-knowledge (ZK) rollups send a proof that it is. A sidechain with its own validators is not a Layer 2: its security does not come from the main chain.
From the report What is Layer 2 - A scaling solution for blockchain
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How new tokens launch
At their peak in 2017 and 2018, initial coin offerings (ICOs) sold tokens straight from a project's website, often with only a whitepaper behind them. Ethereum raised about $18.3M this way in 2014. EOS's developer Block.one raised about $4.1B, and the US Securities and Exchange Commission (SEC) later fined it $24M for an unregistered sale.
Sales then moved onto decentralized exchanges (DEXs) and launchpads as initial DEX offerings (IDOs), where smart contracts handle allocation and liquidity. The Internet Capital Market (ICM) model goes further: a post can become a traded token in a few steps, priced on a bonding curve. Memecoins' total value fell 81.9% from its November 2024 peak by June 2026.
From the report What are ICO, IDO, and ICM in crypto?
Quiz
What makes an old block on a blockchain hard to change?
How often does Bitcoin's new-bitcoin reward halve?
Where does a rollup's security come from?