Beginner’s Guide on Understanding the Relationship Between the Blockchain and Web 3.0

Beginner’s Guide / 28.02.2020

Cryptocurrency talk can get quite confusing with its seemingly similar terms, that are actually distinct, being interchanged continuously. Cryptocurrency faced a significant challenge trying to take off and have the world embrace it upon its debut. To a large extent, most people had inadequate knowledge about it and thought of it as another pyramid scheme ready to rip them off. 

To easier understand cryptocurrencies, it is better first to grasp the mechanics of blockchains – the underlying technology that runs the digital currencies.

Blockchain 101

Blockchains use a distributor ledger that is open to anyone to record all the transactions. Blocks are set up such that once data is recorded and stored, it is difficult to alter. Blocks contain data, hash, and previous block’s hash, thus forming a blockchain. Hash is a unique identifier for each block. Each block is created together with its hash, meaning that tampering or altering the block will change the hash, resulting in a massive change in the blockchain, which makes it invalid. 

But then a hard-working hacker would take their time to alter all blocks and create a new deceitful chain, wouldn’t they? Blockchain technology, however, relies on so much more to secure its’ network, through hashing, proof of work, and peer to peer network. It can be a bit technical, but it gets easier as you get some grasp of the entire concept. 

Aside from the hashing, which is the unique fingerprint of each block and proof of work, blockchain also ascertains security through peer to peer networks. This is to manage the chain as opposed to a central entity (as was in web 1.0). The peer to peer network has open access to everyone who wants to join. The networks become nodes after users have joined. 

Nodes get a full copy of the blockchain they can use to track transactions and verify all is in order. When a new block is created, everyone on the network is notified, and they confirm that no tampering occurred. After that, they proceed to add it to the blockchain in what is called a consensus– only if they prove to be valid. Blocks tampered with are, of course, rejected. 

And so, our hard-working hacker will have to find a way of bypassing all these security measures. They would have to alter each block on the chain, redo the proof of work and somehow manage to get 50% control of the peer to peer network. 

Understanding How the Internet Developed ( Web 1.0, Web 2.0, Web 3.0)

To understand Web 3.0  and how it can drive the mass adoption of blockchains and cryptocurrency, you must first grasp the meaning of both these terms. 

Web 3.0 is an inevitable development closing in. The original web 1.0 could be termed as the birth of the internet where there was a single server and very little peer to peer interaction. When web 2.0 was launched, a centralized system, but with increased servers, was launched. It was more collaborative and with increased interaction, allowing the world to enjoy services from Facebook, Netflix, YouTube, Myspace, etc. It must have seemed like top tier internet and connectivity at the time. 

However, web 3.0 is destined to further revolutionize the internet and connectivity in profound ways resulting in so much change in the world. 

In what way and what’s the point, many may ask? Whereas Web 2.0 is centralized, censored by critical players, and few dominate the market (just about six companies kind of own the internet), Web 3.0 will have unlimited new entrants (owners) into the market, impossible to censor and no ownership. 

Web 3.0 allows for a system whereby users control their data while companies work around the core sphere of user control. This is in contrast to web 2.0 that is increasingly criticized for giving a degraded user experience. 

How Blockchain is Instrumental in Web 3.0 Development

In trying to link these two, we understand that blockchain is the crucial technology for Web 3.0. The elements of blockchain will serve to revolutionize the internet and even businesses. For example: 

  • Decentralized data management in which users control data rather than big companies

Since blockchains present a more decentralized (but secure environment), they are in control instead of key dominant players. Furthermore, with a decentralized system in web 3.0, every node will be able to maintain a copy of the data and validate the data if need be. Even if one node goes offline, the information is still accessible by everyone else on the blockchain.

  • Super secure data management and communication 

Since there is no centralized authority that will store captured data and later on be manipulated (for example, targeted advertising), user’s privacy will be protected, anonymity is maintained, and impersonation is practically impossible. Remember, if there is a discrepancy in a block, it is easily identifiable. Once a consensus is met, a block is created, added to the chain, and becomes transparent to everyone.

Conclusion

Transparency, privacy, control of data sharing, and storage. It sounds like a libertarian’s dream of the internet because users’ experience will now be upgraded to premium priority. With the decentralized concept, intermediaries are reduced (not entirely done with, unfortunately), and so, users could maintain one profile and share parts of it accordingly as opposed to multiple profiles on multiple platforms. 

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Wayne is a Blockchain enthusiast and expert in crypto trading. Currently, he covers trendy issues on digital currencies.