How cryptos work or are being managed?

<p>Get a better ideas regarding cryptos here: <a href="https://www.investopedia.com/terms/c/cryptocurrency.asp">Cryptocurrency Explained&nbsp;</a></p>

<p id="isPasted">Cryptocurrencies are managed and operated through a decentralized model that replaces traditional banks with a global network of computers and automated code. As of early 2026, this system is primarily sustained by three pillars: Blockchain Infrastructure, Consensus Mechanisms, and Community Governance.&nbsp;</p><p><strong>1. The Infrastructure: Nodes</strong>&nbsp;</p><p>The network is comprised of thousands of independent computers called nodes.&nbsp;</p><ul><li>Full Nodes: These serve as the "auditors" of the network. They download and maintain the entire transaction history, independently verifying that every new transaction follows the rules (e.g., checking if the sender actually has the funds).</li><li>Distributed Ledger: Instead of one central database, the ledger is replicated across all nodes. This ensures there is no single point of failure; if one node goes down, the network remains active. </li></ul><p><strong>2. The Management: Consensus Mechanisms</strong></p><p>Since there is no "CEO" to approve transactions, the network uses mathematical rules called consensus mechanisms to agree on the "true" state of the ledger.&nbsp;</p><ul><li>Proof of Work (PoW): Used by Bitcoin, "miners" solve complex puzzles using massive computing power. The first to solve it adds the next block and earns a reward. This makes cheating prohibitively expensive.</li><li>Proof of Stake (PoS): Used by Ethereum, "validators" lock up (stake) their own tokens as collateral. The network randomly selects them to propose and verify blocks. If they act maliciously, they lose their staked funds (a process called "slashing"). </li></ul><p><strong>3. Governance: Who Decides the Rules?</strong></p><p>Unlike traditional companies, most crypto projects are managed by their communities.&nbsp;</p><ul><li>Open Source Code: The software is public. Anyone can propose an upgrade, but the majority of the network must agree to run the new version for it to take effect.</li><li>DAOs (Decentralized Autonomous Organizations): Many projects use DAOs, where token holders vote on key decisions like treasury spending or protocol changes. By 2026, some "ownership coins" have even integrated legal rights into these voting structures. </li></ul><p><strong>4. How a Transaction is Processed (Step-by-Step)</strong></p><ul><li>Request: You sign a transaction with your Private Key (your digital signature).</li><li>Broadcast: The transaction is sent to the network and sits in a "waiting room" called the mempool.</li><li>Verification: Nodes check the signature and balance. Miners or validators then bundle it into a new block.</li><li>Finality: Once added to the blockchain, the ledger updates globally. You can see this on public explorers like Blockchain.com. </li></ul>