The world of cryptocurrency and blockchain technology is developing with new features and notable among them is web3.
Web 3 is the latest developmental stage of the internet which already had Web 1 and Web 2. Although Web 3 is still in its developmental stage, it is no doubt with huge potential with the incorporation of crypto and blockchain technology.
In this post, we’ll learn about Web3 and how it works. For the sake of beginners, let’s have a sneak peek into the world of cryptocurrency and blockchain.
What is Cryptocurrency?
Cryptocurrency is a digitally encrypted, decentralized currency that is not linked to or regulated by any government or central bank.
It is based on blockchain technology, which is a distributed ledger framework. Bitcoin is the first cryptocurrency created which has led to the creation of others alike known as ‘’altcoins’’.
Cryptos are categorized as virtual or digital currencies. They were originally developed to provide an alternative mode of payment for online transactions.
What is Blockchain?
Blockchain is a distributed ledger that is managed by a network of computers. It maintains an exact copy of the database and updates its records by consensus based on pure mathematics.
Blockchain store data in block that are then linked together via cryptography. It can be used to store different types of information but the most common use so far has been as ledger for transactions.
What is Web3?
Web3 is an idea of new iteration of the World Wide Web (WWW) based on blockchain technology. It incorporates concept like decentralization and token-based economics.
Web3 which is also stylized as web 3.0 is seen as the internet’s next phase. It has an element of non-fungible token, decentralized finance & play-to-earn gaming which has attracted attention.
Some of the likely advantages of web3 are data security, scalability, and privacy for users to combat the influence of large technology companies.
How Does It Work?
As mentioned earlier, the Web3 has components of blockchain technology. This makes it is transparent and impossible to edit or falsify.
The main issue with blockchain technology has to do with its purported benefit. As it cannot be edited, this makes it hard to be protected against fraud. Once something exists on the blockchain, it’s impossible to remove.
One of the purported benefits of Web3 is that creators and users could monetize their efforts on the internet through the blockchain. Another benefit is that users could monetize their own data for targeted advertising purposes.
It has been suggested by Web3 proponents that control over decentralized services would be handed to users rather than big companies. Here, decisions of the companies would be taken by the users rather than the big tech companies.
Web3 in our World Today
Although the concept of Web3 is still in its early stages, there have been examples in our world today. One of such is seen in the world of NFTs. The video game Axie Infinity is somewhat similar, in that it runs on the Ethereum blockchain and rewards users with cryptocurrency for achieving goals.
Blockchain companies are also creating Web3 tokens. One of such is the Theta Network which rewards users for sharing their storage or bandwidth on any device.
The most talked about features of Web3 is in its play-to-earn gaming. Here, creators and users could monetize their content without relinquishing control to big tech sites. This could include monetization of their activities and their own data.
Is There Any Issue with Web3?
Despite its interesting features, questions have been raised about web3 by some industry experts. This include a loss of privacy due to more expansive data collection, potential for low moderation and the proliferation of harmful content, etc.
The Bottom Line
Web3 is still in its infancy stage but its enormous potentials make it one to look out for. The fact that it is a component of the blockchain technology makes one of the exciting features of the crypto industry.