The Newton's cradle demonstrates the conservation of momentum and energy. It consists of a system of six balls that are suspended by string. As you lift one of the marbles and it gets released, it strikes the other 5 marbles. During this process, it creates a force to the other 5 marbles, causing the marble on the other end to be pushed up. The cradle demonstrates Newton's second law because the law of conservation of momentum can be derived from this law of motion which is force equals mass times acceleration. It also demonstrates Newton's third law. When you first lift the marble and release it, it strikes the remaining marbles, causing a force to be sent through all of them in order to push the marble on the other end up.
The collision that is present is an elastic collision, where both the momentum and kinetic energy of the system is conserved. These are two equations that represent elastic collisions in the Newton's cradle.
Directly related to the velocity, whenever a certain number of balls is released from one side, the same number of balls go up on the other end at approximately the same height.
Construction of the Newton's Cradle
When designing a Newton's cradle, the balls that you are using need to be the same density, size, and weight. Since the cradle was designed to demonstrate the conservation of energy and momentum, which both include mass, the system will have less of a purpose if the balls aren't the same mass. Once one ball is lifted and released, it moves another ball with the same mass the same distance with the same speed. There will be the same amount of work done on the second ball that gravity had performed on the first one. As you increase the mass of the balls used in the system, although the system will still work, it will be more difficult because it requires more energy to move the balls the same distance.
*Side Note* When the marble is lifted, they have gravitational potential energy that is then converted into kinetic energy at the bottom of the swing. The velocity of the marble is entirely dependent on the height that you lift the marbles.