Cryptoeconomics (Game Theory)

Cryptoeconomics is based on game theory, a field of study that attempts to predict the interactions between different participants in a situation with defined rules and outcomes. When applied to blockchain networks, game theory can be used to encourage honest activity by providing adequate incentives.

Cryptoeconomics works differently depending on the blockchain. Bitcoin uses a Proof-of-Work system where nodes (called miners) must expend some resource (electricity, in this case) before confirming transactions. Blockchains like Ethereum 2.0, Solana, and Cardano use the Proof-of-Stake system.