# Frequently Asked Questions

# What are blockchains?

Blockchains a distributed and decentralised public ledger recording all transactions for a given cryptocurrency.

# What is Proof of Stake (PoS)?

Proof of Stake is an alternative to the first consensus mechanism, Proof of Work (PoW). While PoW involves a lot of computation power for all nodes, PoS decides consensus based on the stake (the coins/tokens) that each node has on the network.

# What are layer 2 networks?

While layer 1 networks, also referred to as the main chain, are blockchain systems such as Bitcoin or Ethereum, with typically low-transaction throughput, layer 2 networks are secondary networks built on top of the underlying layer 1 blockchain, typically solving layer 1 issues such as scalability.

# What are compute oracles?

Compute oracles are bridges between blockchains and the outside world to enable the former to consume outside API’s and compute power.

# What is the layer 3 network (Cudo)?

The Cudo platform (opens new window) provides cloud-like services, focusing on low costs, low latency and a high degree of personalisation. Hence, just like the CUDOS network is a layer added on top of blockchains to provide extra compute capacity, the Cudo platform can be seen as an extra layer on top of the CUDOS network, and thus the layer 3 to blockchains, to provide even more on-demand compute capacity. This added capacity might be needed in order to select different types of hardware, or to request jobs that demand more resources than the CUDOS network can directly absorb.