# How cryptocurrency works

Crypto networks aim to answer a simple question: *who owns what, right now?* They do it in three layers:

1. **Cryptography** protects accounts and transactions with public/private keys. Your public key is like an address; your private key proves you’re allowed to move funds from that address.
2. **Blockchain** is a shared ledger made of “blocks” of transactions that are linked together. Each block references the previous one, making the history tamper‑resistant.
3. **Consensus** is how the network agrees on the latest valid state. Two common mechanisms are:

* **Proof of Work (PoW):** Specialized computers compete to add the next block. High security, higher energy use.
* **Proof of Stake (PoS):** Participants lock (“stake”) tokens to help validate blocks. Misbehavior can be penalized; energy use is drastically lower than PoW.


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