Wrong Questions Review

Consensus mechanisms are designed to achieve agreement among distributed network participants about the current state of the blockchain ledger. While mining is one type of consensus mechanism, the primary purpose is to ensure all nodes agree on which transactions are valid and in what order they occurred.

Impermanent loss occurs when the price ratio of tokens in a liquidity pool changes compared to when you deposited them. The loss becomes 'permanent' only if you withdraw your liquidity at that point. If the ratio returns to the original state, the loss disappears, hence 'impermanent'.

Bitcoin has a hard-coded maximum supply of 21 million coins. This limit is built into the Bitcoin protocol and cannot be changed without consensus from the network. This scarcity is one of Bitcoin's key value propositions as a digital store of value.

EIP-1559 introduced the fee burning mechanism along with a new transaction fee structure. This proposal implemented a base fee that gets burned (removed from circulation) and an optional tip for miners, making transaction fees more predictable and potentially deflationary for ETH.

AMM stands for Automated Market Maker. It's a protocol that uses mathematical formulas to price assets and enable trading without traditional order books. Popular AMMs include Uniswap, SushiSwap, and Curve, which use algorithms to determine token prices based on supply and demand.

Ethereum has a much faster block time compared to Bitcoin. While Bitcoin targets 10 minutes per block, Ethereum aims for approximately 12-15 seconds per block. This faster block time allows for quicker transaction confirmation but requires more sophisticated consensus mechanisms.