What is Web3?
This piece was designed to give you an overview of Web3. Web3 is a new iteration of the internet that will change how the it internet works and the way business is done. Web 1.0 Allowed consumers to view content. Web 2.0 Allowed users to post and interact with the content. Web 3.0 allows users to view, interact, and own their their content. How can you “own” content? Skip a section to receive a direct answer to this question.
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What is a Blockchain?
Owning your content on the internet means that you have undisputed access and rights to your assets that live on the cloud, which includes videos, posts, and and documents. Today, many of these assets live on centralized databases that are owned and operated by large corporations. If someone hacks these databases, your content could get lost in the attack. If someone hacks “your social media account” and erases all the content, you won’t be able to recover it. Blockchains are cryptographically-secure databases that ensure that no single company owns your digital assets. Instead, blockchains distribute your data across thousands of computers and keep it safe this way.
A blockchain is an encrypted database that keeps a record of global transactions; this is important: Every, single, one, of the transactions. That is, the blockchain holds a copy of all the data transactions that have occurred on its network. These transactions happen between accounts: which are comprised of individuals, companies, and digital entities. These transactions are composed of any piece of data that has been transported from one computer to another: which range from pictures, numbers, profiles, to currencies… the list goes on.
Cryptocurrencies give individuals and businesses the ability to purchase applications, products, and services on the blockchain in a way where transactions are extremely difficult to dispute.
This data ledger is secure, and security is made possible by decentralization.
Blockchains are decentralized because they store data on multiple computers called ‘nodes’. Each node holds a copy of all the transactions that have transpired on the blockchain. If one node is compromised: it shuts down or is hacked and modified, all the other nodes continue to keep their own copy of the data.
There is another important concept to note. Blockchains are immutable: the data inside them is unmodifiable. No one can go back and change the records on the database unless they change the data on more than 51% of the nodes, and hackers simply don’t have the resources to modify thousands of computers worldwide simultaneously. So, anyone participating on the blockchain has a record of all the transactions that have occurred.
In order to add data to the blockchain, transactions must be piled up into what are called blocks. A finite, predefined number of transactions make up a block. Once the transactions on the blockchain reach a certain number, a block is created, and that block is connected to the previous block. The connected blocks form the blockchain.
Blockchains encrypt data via a process called mining, which is a mechanism that rewards ‘miners’ in cryptocurrency for encrypting the data. The miners are the people who maintain the nodes and the nodes store the data. For any given blockchain, there may be thousands of nodes. Remember, the nodes are simply computers that maintain the database. The database of blocks store information: including transactions between accounts, messages between people, and code.
Owning a Piece of Web3
Now, earlier I said that Web3 allows you to own your content. This is enticing. You own your content on Web3 because the blockchain operates as a public computer, which means it can be accessed by anyone to store data.
What steps do I need to take to own my content? First, you have to buy into the network by purchasing cryptocurrency with cash. Once you have tokens, you can use your tokens to execute transactions on the network.
The only way to act on the network is to have tokens; so if you have tokens, you own a piece of the network. What can you do if you own a piece of the network? Well, you can do a lot of things. Send friends currency, purchase digital items, and even make blockchain-immortal websites.
Let’s use the Mirror application on the Ethereum network as an example. Mirror is a platform that allows you to publish blog posts and save them on the blockchain by creating NFTs out of the blog post and text. Publishing the blog post is a transaction on the Ethereum network which automatically generates an NFT that is tied the address on your cryptocurrency Wallet. Think of your wallet as a house with a registered address that stores all your digital assets inside it.
Each action you take on the network records a transaction on the network. You do have to pay for every transaction you make on the network with cryptocurrencies. Cryptocurrencies, give you the power to participate on the network: they are a medium that allow you to take actions. The network of blockchains is a new version of the internet where you can buy art, use financial applications, play video games, send money or messages to friends, and so much more.
Important Features of the Blockchain
Here are several important features of blockchain.
It gives anyone on the internet the ability to exchange money in a way where you don’t have to go through banks… or countries.
You can take apps stored on the blockchain and reuse them for your own purposes because most of the code on the blockchain is open source.
If you use blockchains, centralized companies no longer own your data… you do. Your data becomes less vulnerable to cyber attacks on centralized companies because centralized companies have a single point of entry. Many companies have gotten hacked, including Facebook and LinkedIn. Blockchains have thousands of nodes (thousands of points of entry), and you need to take control of over 51% of the nodes to modify any of the on-chain data. Blockchains are not perfect, but they’re more secure.
Finally, blockchains bring new features to supply chains and energy management, because they can be storage mechanisms for integrated public data that can be accessed by pools of individuals and companies in order to find optimized solutions.
Wallets
You don’t need to walk around the internet like you do today inputting your credit card everywhere… all you have to do is connect your blockchain wallet with your browser and then use tokens to access as many of the services on your blockchain network as your funds allow you to. Creating a blockchain wallet will enable you to store your currency and other digital assets that you may acquire. Recognized wallet apps include Metamask and Coinbase Wallet. When you’re navigating Web3, don’t click on strange links, some of them can drain the funds from your wallet. To maximize safety, purchase a hardware wallet.
NFTs
The tokens for any given blockchain are fungible. ‘Fungible’ means that ‘tokens’ have many brethren identical to themselves. 1-Dollar Bills are fungible: there are millions if not billions of 1-Dollar Bills.
A non-fungible token means that an item is unique. NFTs are given unique identifiers by blockchains, much like our driver’s licenses are assigned random numbers. A blockchain verifies that this item is real by cryptographically checking its unique identifier.
You can create unique assets on the blockchain and trade them for fungible tokens, or for other NFTs. If your NFTs are verified by the blockchain, and not fake, you can do all sorts of things.
Examples of NFTs include art, University Credentials, pictures, real estate titles… you name it. Not only can you exchange cryptocurrency, but you can also exchange digital assets for Cryptocurrency. To see an example of a Crypto asset exchange go onto OpenSea and observe the volumes of currency being exchanged.
Smart Contracts
A smart contract is a simple piece of code, that states that given a certain event on the blockchain, something else will occur.
For example, if you don’t pay the rent by April 21, then the blockchain automatically takes your locked 500 crypto and sends it to me. That’s right, cryptocurrencies can get locked, in a way that you can’t touch them unless the smart contract allows you to. This has allowed people to put up crypto and even NFTs as collateral for loans.
This is all thanks to the fact that cryptocurrencies are decentralized: their databases are independently stored on multiple nodes, which establishes a trust-worthy middle ground of exchange for companies.
Data Portability and Integrated Digital Identity
As crypto grows, the walled gardens of Facebook, Twitter, and other platforms lose their power because they isolate their users on their platforms and make money by retaining their users . Web3 will allow you to port your identity between platforms using your wallet. Your wallet stores all of your digital assets. You can go into a video game, collect an item, and put it in your wallet. It will stay there forever.
When you go onto a Web3 social platform that doesn’t exist yet, you will be able to bring any kind of data you want with you, whether it’s fitness data from Strava or Apple fitness… or even how many followers you have on Twitter! The blockchain will give you the ability to travel with your data across platforms.
Now, blockchains won’t just give the current internet users added value, blockchains can also provide digital identities for people in countries who don’t have passports. Instead of Starbucks sending local currencies to remote farmers, the farmers will be able to use blockchains to get online and get paid in an international currency. There are many people around the world which will benefit from this Technology that is not run by a government.
Concluding Remarks
Famous blockchains include Solana, Ethereum, Bitcoin, and Cardano. Do your own research, because some of these products won’t be what people think they will be. Blockchains create a space where people benefit from other people using the network, because they higher the quantity of participation, the higher the value of the currency rises. Therefore, people using blockchains benefit from others using the same blockchain because the value of their network tokens rise as more people demand the opportunity to join the network.
Blockchain gives the world the freedom to trade and makes data storage more secure.
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