IMO it is worth installing metamask and having a look yourself. What you will be looking at is a decentralized permission-less financial instrument that tracks the USD.
Anyone in the world can now potentially exchange USD-pegged tokens in an open access trustless system. That is no small thing.
It's not a good collateral against crypto crashes, in case people got that impression, since it's mostly pegged to USD via ETH: ETH price crash The greatest threat to Single-Collateral Dai will of course always be a massive crash in price of ETH, since ETH is the only collateral type. If the price of ETH crashes so much that the system becomes net undercollateralized, all PETH and CDPs become worthless. Importantly, Dai holders will keep their claim on the leftover ETH. When global settlement is activated after a massive price crash, Dai holders will all receive a proportional claim to the underlying ETH, just like is normally the case with Global Settlement. However, Dai holders may also suffer a haircut in this scenario if the total value of the underlying ETH isn’t sufficient to cover the face value of the total outstanding Dai. ETH can’t be siphoned off by third parties or unfairly claimed by participants in this scenario. As an example, if the total supply of Dai is 1 million, and the total value of the underlying ETH collateral is 800,000 USD, and global settlement is activated, every Dai will become a claim on 0.8 USD of ETH (based on the ETH/USD price feed at the time of global settlement). This would mean a 20% haircut to Dai holders. https://medium.com/@MakerDAO/single-collateral-dai-source-code-and-security-reviews-523e1a01a3c8The greatest risks to Single-Collateral Dai:
I feel like I'm missing out on a big part of The Future by not educating myself on what a cryptocurrency is. Any good resources for beginners you could recommend? I'm not looking to get into mining, just into the idea.
Adding to that, 3Blue1Brown's explanation of the mechanics behind ledgers is a good followup if one wants a lower abstraction level.
If you're technically minded, the Bitcoin whitepaper is a good starting point. Then you can read about how subsequent cryptocurrencies improve, or attempt to improve, on the original design. If that's too much, I'll give a quick overview. You know BitTorrent, right? On BitTorrent, a bunch of people all have the same file and agree on its contents. When someone new comes along, they can download parts of the file from anyone/everyone and know it's trustworthy, because all the group can prove they have parts of a file with the same contents. And if anyone tries to lie about a part of the file, they can't, because the contents of the file are proven via cryptographic hash[1]. Bitcoin is a similar idea, except instead of a file, it's a transaction ledger. Each new transaction is "confirmed" by hashing it with the previous transaction in a way that's easy to verify but time-consuming to compute in the first place ("Miners" are the people that do the time-consuming computing). Then the next transaction is confirmed on top of that one, and so on. This chain of transactions is the "blockchain". "Block" comes from that in the real protocol, unconfirmed transactions are grouped into a big list, or "block", and hashed with the previous block, instead of one at a time. The benefit of this is that you rapidly reach a trusted consensus on transactions across the globe that can't be faked or changed, without needing a trusted intermediary like Paypal or Visa, similar to BitTorrent not needing a trusted server to download a file. This gives you a mathematically verifiable "coin" that can't be counterfeited, relies on no central authority, and is guaranteed to behave a certain way. [1]: Basically, treat some data as a very long number and enter it into an equation that produces a fixed-size result that is unlikely to occur for anything besides that exact number, and can't be "reversed" to see what the possible inputs are. Thus, you can verify the data that was entered into the equation. For example: take this post and assign each letter a number from 1 to 26. Then add up all the numbers. Then take the first letter of each sentence and do the same thing. Then append the two numbers. That sequence of numbers is unlikely to occur for any other post, and you can't take the numbers and figure out the contents of the post.
Ethereum is like Bitcoin, but the way it is mined allows the "transactions" to actually be arbitrarily complex programs that are run by the miners. And the output of those programs has the same reliability of correctness that all the transactions do. A nickname for Ethereum is the World Computer.