what actually even is crypto?

blockchain for beginners 🪙

most people i’ve met know about crypto, but nothing about the actual technology and how it works, just the bad rep and get-rich-quick schemes that have pretty much plagued the whole ecosystem.

understandably. there are definitely a lot of strange people in that community.

still, the technology is actually pretty interesting, and blockchain has a lot of applications outside of finance if we care enough to isolate the architecture from those using it.

so allow me to break down the technology briefly.

crypto exists because a very annoying computer science problem existed for a long time: how do you stop people from lying in a shared system when there’s no central referee?

if i run a normal app, this is easy because there’s a server. the server decides what’s true. if you try to cheat, the server rejects you. crypto gets rid of this server on purpose.

now, instead of one authority, we have a network of independent computers (these are called nodes) all running the same software. each node keeps its own copy of the database, and when someone submits a transaction, it gets broadcast to the network instead of being sent to one company or entity.

each node checks the transaction for itself. is the signature valid? does this account actually have the balance it claims? does this break any rules? the invalid transactions are ignored, while the valid ones sit around waiting to be included.

these transactions get grouped into blocks, which are batches of recent activity + a reference to the previous block. this reference is key because it cryptographically links the blocks together, so that changing an old transaction would require rewriting every block after it. history becomes fragile in exactly the way you’d want it to be.

okay, so who gets to decide which block becomes “real”?

different blockchains answer this differently, but at its core, the network chooses a block producer through a mechanism that’s expensive to scam. in proof-of-work systems, the nodes compete by doing computational work. the work itself is actually mostly useless, but it’s costly. if you want to rewrite history, you need more computing power than the rest of the network combined, which pretty quickly becomes impractical.

in proof-of-stake systems, nodes lock up capital instead. if they behave dishonestly, their stake can be taken away, so lying becomes financially irrational.

once a block is accepted, every node updates its copy of the ledger without any need for central approval. there’s just an independent verification followed by consensus on the same outcome.

the reason this even works is because of cryptography. public-key signatures prove that only the owner of a private key can authorize an action. hash functions make any data tampering very evident. tbh, this isn’t particularly new, but using these tools to coordinate large numbers of untrusted participants at once, most definitely is.

the tokens that we’re all familiar with exist because the system needs fuel. nodes don’t secure the network out of goodwill. the world doesn’t work like that, unfortunately. they do it because they’re paid to, and because the rules make attacking the system more expensive than following it. the economics + the cryptography are inseparable. without either, this system collapses.

this is also why crypto systems are pretty slow, clunky, and expensive compared to centralized ones. each node repeats the same work because redundancy is literally the point. we’re trading efficiency for independence.

so if you didn’t care to read any of that, blockchain is basically just a globally shared computer that anyone can verify, no one can easily change, and no one fully owns. crypto and everything else (the coins, the markets, the drama) just sit on top of that foundation.

today’s drops 🔍️

• registration for figma’s conference in june (sf / virtual) is open

• accounting internship @ coinbase

• check out google’s 2026 summer of code program