Let's understand the relationship between cryptocurrencies and public chains
As you learned in Lesson 2, the characteristics of public chains include "Decentralized," "Trustless," and "Transparency.
These are common to all public chains, but there is one more thing that all public chains have in common.
They each have their own cryptocurrency, which is essential for the blockchain to work.
This is a cause-and-effect relationship: "blockchains do not have a specific administrator" -> "they are managed by mining" -> "there must be an incentive for mining" -> "cryptocurrency is paid as a reward for mining".
At this point, there is no public chain that does not require cryptocurrency as a reward, and no new mechanism has emerged to replace this reward mechanism.
Check your achievement
Click the “Tick” button
if you understand the lesson so far.
The greatest invention of the blockchain is economic rationality
Some of you may have wondered why cryptocurrency serves as a reward for mining.
In order to function as a reward, it must itself be worth something to receive.
Cryptocurrencies are literally currencies, and they function as rewards because they themselves have a value that can be converted into fiat currency.
Furthermore, this reward mechanism is connected to the economic rationale for using blockchains to prevent administrators (Miners) from committing fraud.
As we learned in the curriculum "Cryptocurrencies," the development status of the blockchain is a factor in determining the price of cryptocurrencies.
Therefore, if a miner commits fraud by using the blockchain he is mining, the price of the cryptocurrency he is receiving as a reward for mining that blockchain will fall.
"No one would want to lower the price of the cryptocurrency they receive as a reward.
This economic rationale, which makes good use of psychology and behavioral economics, is said to be the greatest invention of blockchain.
Check your achievement
Click the “Tick” button
if you understand the lesson so far.