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Cardano Ecosystem

Cexplorer

12/23/2023

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Understanding The Relationship Between Coins And The Protocol

Every protocol of a blockchain network needs coins for its decentralization.

Understanding The Relationship Between Coins And The Protocol

Every protocol of a blockchain network needs coins for its decentralization. BTC coins serve as a reward for miners. ADA coins are directly used for the decentralization of Cardano. 

Native coins need protocols. Network consensus allows coins to be spent. Protocols can provide additional utilities to coin holders. 

Let's explain the relationship between native coins and protocols. Why Does The Protocol Need Coins? Any open public network must be able to economically incentivize people to provide security and decentralization. 

Coins are used to reward people who perform services that are in line with the interest of the protocol. This is the main purpose of coins. From the point of view of the protocol, the basic principle is the following: Do the work I need and get a fair reward f Read article: Understanding The Relationship Between Coins And The Protocol

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