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Web3 101: Know how!
Decentralizing the Web for a More Equitable Digital Future
The Internet is undergoing a major transformation. From humble beginnings as static web pages to dynamic, interactive web 2.0 experiences, the digital landscape is now moving towards web 3.0
Understanding the Evolution and Future of the Web: Web 1.0, Web 2.0, and Web 3.0
The web has evolved significantly since its inception. From the static pages of Web 1.0 to the interactive and social Web 2.0, we now stand on the brink of Web 3.0—a decentralized, semantic web that promises to reshape our digital lives.
Web 1.0: The Early Web (1991 - 2004)
Web 1.0 was the first iteration of the web, characterized by static pages and limited interactivity. It served primarily as a platform for sharing information, with users mostly acting as passive consumers.
Web 2.0: The Social Web
Web 2.0 introduced dynamic content, social networking, and user-generated content. Platforms like Facebook, Twitter, and YouTube allowed users to interact, share, and create content, making the web more participatory and social.
Web 3.0: The Decentralized Web
Web 3.0 is about decentralization and giving power back to the people. It is built on blockchain technology and aims to create a more secure, transparent, and user-controlled internet.
Key Concepts of Web 3.0
Decentralization: Distributing data across multiple nodes ensures no single point of failure. Types include federated (classic Web 3.0) and absolute (Web3).
Metaverse: A virtual space with a blockchain economy where users can live, play, and work.
Semantic Web and Spatial Web: Enhances data connectivity and integration, making the web more intuitive and useful.
Bitcoin and Blockchain
Bitcoin: A decentralized currency built using a blockchain, which is an immutable ledger of transactions.
Blockchain: A chain of blocks containing transaction data. Each block includes a header (with metadata and security measures), a transaction counter, and a list of transactions.
Overall, the block contains:
1. Metadata about the block
2. Security measures to ensure it is tampering proof
3. List of transactions
Immutability: Once a block is added, it cannot be modified, ensuring data integrity. For example, Bitcoin transactions are permanent and transparent.
Decentralized Finance (DeFi) and dApps
DeFi: Enables financial transactions without intermediaries, using smart contracts on a blockchain.
dApps: Decentralized applications with smart contracts that function as the API, user interface, and data storage.
Core Innovations Enabling Decentralized Storage
ENS and IPFS: The Ethereum Name Service (ENS) links to the blockchain, and InterPlanetary File System (IPFS) breaks up and reassembles files for decentralized storage.
Consensus Mechanisms
Consensus mechanisms are protocols used in blockchain networks to verify and agree the state of a partitioned ledger. They ensure that all participants in the network agree to the terms of the blockchain and maintain its integrity and security.
It used to resolve conflicts. Meaning the system requires an authority to choose among conflicting blocks. There are two common ways of thinking:
Proof of Work (PoW):
Definition: A consensus mechanism that requires participants (miners) to solve complex mathematical puzzles and add new blocks to the blockchain in order to validate the transactions. How it works: Miners compete to solve a computationally important problem, and the first one to solve it gets the chance to add another block to the blockchain The process is resource-intensive and requires they use a great deal of computing power and energy.
- Rewards: Miners are paid in cryptocurrency after successfully adding a block, compensating them for their efforts and expenses.
Proof of Stake (PoS):
Definition: A consensus that chooses authenticators based on how many tokens they have and are willing to "stake" as collateral.
How it works: Validators are appointed to create new blocks and validate transactions based on the amount of cryptocurrency deposited. Other witnesses then confirm the story. Once consensus is reached, the block is added to the blockchain.
Rewards: Validators and those who prove the legitimacy of the block are rewarded in transaction fee or newly minted cryptocurrency. The system discourages bad behavior, as acceptors can lose their stacked tokens if they act incorrectly.
The ‘work’ here means burning electricity to guess the right nonce.
Both PoW and PoS play critical roles in maintaining the security, transparency, and integrity of blockchain networks, though they operate with different methodologies and resource requirements.
Cryptocurrency, Tokens, and NFTs
Cryptocurrency: Digital currency used for transactions on the blockchain (e.g., Bitcoin, Ether, SOL).
Tokens: Represent assets on the blockchain. Coins are fungible, while tokens can vary based on the asset they represent.
NFTs: Unique tokens representing assets that cannot be copied or substituted. They have various uses, such as tickets, memberships, and investments.
Crypto token
A representation of an asset on the blockchain.
All coins are tokens, not all tokens are coins, but all tokens are backed and paid for using coins. Tokens can represent anything.
Coins
Coins perform as money on the blockchain, they are used to perform transactions. They are interchangeable (fungible).
Tokens
Tokens can be traded directly inside the blockchain. The coin value of a token can vary depending on the asset it represents.
And when we talk of web3, it is the vision of a tokenized web where every transaction is turned into a tradable token.
Crypto Wallets
A crypto wallet is a digital tool that allows users to store and manage their cryptocurrency holdings. It holds the keys (both public and private) necessary to access and control digital assets on the blockchain. There are three main types of crypto wallets:
Web-based wallets: Hosted by online service providers and accessible through web browsers.
Software-based wallets: Installed on a computer or mobile device, offering more control and security.
Hardware-based wallets (cold wallets): Physical devices, such as USB drives or paper wallets, that provide the highest level of security by keeping the keys offline.
Crypto wallets do not store the actual coins or tokens but instead store the keys needed to access and manage them on the blockchain.
Pseudonymity of address
The public key (address) is public, but nobody knows who owns the address.
Smart contracts
This has become a central feature of the vision of web3.
Decentralized Autonomous Organizations (DAOs)
DAOs: Organizations governed by smart contracts, replacing traditional administrative functions with code-based governance.
Juggle your brain
1. Why do you think nfts contain a link to art instead of actual art?
Well, it is because blockchain storage is expensive.
2. What is the difference between mining and forging?
Mining requires vastly more computing resources than forging. It requires a lot of electricity and cooling.
3. What does a crypto wallet contain?
access to the blockchain. The wallet provides a simple way to enter the public and private keys, thus allowing transactions to proceed.
4. What do DAOs seek to replace in the human realm?
administrative functions. DAOs use code to take routine actions, such as voting.
5. What are the core innovations enabling decentralized storage?
ENS and IPFS
Ethereum Name Service links to the blockchain, and IPFS breaks up and reassembles the file.
Final Thoughts
Web 3.0 represents a major shift in how we interact with the Internet, offering a user-friendly, user-centered alternative to the current Web. By understanding and participating in these developments, we can shape the future of the web to be safer, more transparent, and more accurate.
Is Web 3.0 the future of the Web? They need to know, and it’s our job to participate in its creation.