5 months ago
0 comments

What is the Relationship Between Blockchain and Web3?

Introduce

Digital assets could become an intrinsic part of Web3 – a new internet that is expected to overcome the shortcomings of the current Web such as the concentration of power in the hands of a few social media platforms. centralization and exploitation of users' personal data. The decentralized and permissionless nature of blockchain is instrumental in distributing communication power instead of giving it to central authorities.

While digital assets bring a native digital payments platform to Web3, they can also function as programmable tokens to play a variety of roles in digital economic systems. Blockchain and cryptocurrencies can also be used to make Web3 more centralized with communities, through decentralized autonomous organizations (DAOs).

How is Web3 different from Web2?

The major evolutionary steps of the Internet are often represented as different stages, called Web1, Web2, and Web3. In the Web1 era, users cannot change data online or upload their own content to the websites they are interacting with. The Internet previously consisted of static HTML pages that allowed for simple, one-way experiences, such as reading on information forums.

Web1 allows simple content viewing and interaction. After that, Web2 gradually emerged as a more interactive internet, where users participated more by creating their own content. As these methods of online interaction are largely facilitated by social media platforms, Web2 has seen the rise of new centralized technology giants.

The current Web2 ecosystem is changing again as many of its flaws are exposed. For example, internet users have become more concerned about data tracking and ownership, as well as censorship issues.

The power of centralized companies became especially noticeable when they began to leverage it to ban specific users and organizations from forming their own platforms. Web2 companies also use data to keep users on their sites and create targeted advertising for the benefit of third parties. Such economic incentives may cause such companies to act not in the best interests of their users.

Web3's vision is towards a better internet. Its key promises include making online platforms decentralized, trustless and permissionless. Web3 can also bring digital ownership, digital native payments, and censorship resistance as a new standard of Web products and services.

Blockchain and cryptocurrencies are perfectly positioned to become essential technologies of Web3 because they are inherently decentralized, allowing anyone to record information on-chain, tokenize assets, and create technical identities. number.

How do blockchain and cryptocurrency fit into the Web3 ethos?

Decentralization: As mentioned above, one of the central problems of Web2 is the concentration of power and data in the hands of a few large players. Blockchain and cryptocurrencies can decentralize Web3 by facilitating broader distribution of information and power. Web3 can use a public distributed ledger powered by blockchain to enable greater transparency and decentralization.

No permissions required: Blockchain-based projects replace the proprietary systems of traditional companies with publicly available code. The permissionless nature of applications built on blockchain allows anyone around the world to access and interact with them without restrictions.

Trustless: Blockchain and cryptocurrencies eliminate the need to trust any third party, such as a bank or an individual intermediary. Web3 users can transact without placing trust in any entity except the blockchain network itself.

Payment Platform: Cryptocurrencies can serve as Web3's digital payment infrastructure. Digital assets can improve on the cumbersome and expensive payment infrastructure of Web2 because they are truly borderless and do not require intermediaries.

Ownership: Cryptocurrencies have provided tools like cryptocurrency wallets that help users self-custody their coins without the need for an intermediary. Users can also connect the wallet to decentralized applications to use their coins in a variety of ways or showcase their digital items. Anyone can verify ownership of these funds and items using a transparent public ledger.

 

Censorship-proof: Blockchains are designed to be censorship-resistant, meaning no party can unilaterally change the records of transactions. Once data is added to the Ethereum blockchain, it is virtually impossible to change or remove. This feature can help protect all forms of speech from government and corporate censorship.

Are Blockchain and Cryptocurrencies Necessary for Web3?

Web3 may also rely on technologies unrelated to blockchain or cryptocurrency. For example, technologies such as augmented reality (AR), virtual reality (VR), Internet of Things (IoT) and metaverse may also become necessary for the new era of the internet. While blockchain may be more useful on the infrastructure side of Web3, these technologies and solutions can help make the internet richer and connected to the real world.

IoT can connect different devices through the internet, while AR can embed digital visual elements into the real world, and VR can build computer-generated environments with represented items. Face is a digital asset. Ultimately, scaling and bringing these technologies together could create a unified Web3 metaverse.

Cryptocurrencies can provide digital payment platforms and more. Utility tokens can unlock a wide range of essential use cases for Web3. Additionally, non-fungible tokens (NFTs) can help verify identity and ownership in the digital realm in a way that does not compromise users' control over their personal data.

What will the combination of Web3 with cryptocurrency and blockchain look like?

Blockchain technology could become one of the cornerstones of Web3, but users may not even notice it. If applications built on blockchain were user-friendly and intuitive, people wouldn't think about the underlying infrastructure – just like we don't need to care about data servers and internet protocols of social networks that we use every day.

NFTs can allow users to display digital collectible items to other users, helping to create and maintain their unique digital identity. They can also serve other purposes, such as reinforcing many key processes in online games.

Blockchain and cryptocurrencies can transform the way Web3 users coordinate and execute collective action through decentralized autonomous organizations (DAOs). DAOs empower people to organize around common interests without the need for a central authority to make decisions. Instead, token holders vote to collectively determine the best course of action. Additionally, all activity and votes are visible on the blockchain. Therefore, DAOs can promote Web3 to become more decentralized, transparent, and community-centric.

Summary

Web3 can solve the big problems of today's internet and reduce the power of tech giants. Yet all of that remains largely an aspirational vision rather than a tangible reality. However, this technology will likely underpin the next iteration of the Web's development.

Blockchain and cryptocurrencies are often seen as among the technologies most likely to usher in the Web3 revolution because they are designed to facilitate decentralized, permissionless, and permissionless interactions. trust. Additionally, blockchain technology and digital assets do not compete with other major components of the Web – such as AR, VR and the internet of things. In short, all of these technologies have the potential to deliver the most promising solutions when combined together.