5 Fundamental Technologies In Web3 And What They Mean

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Technology

The internet is one of the most interesting and incredible tech advancements of all time. Its inception enabled a global connection and literally placed the world at the click of a mouse, tap of a button, or swipe of a finger. But its evolution didn’t stop and has continually changed to cater to the growing demands and preferences in the market. Tech experts keep are always innovating new ways to advance it and the latest evolution is the Web3.

Web3 relies on the key blockchain trait of being a decentralized technology. This involves working with blockchain development services to build a more trustless, secure, and transparent environment for users online. This article will discuss the fundamental driving factors of Web3 and how they are changing how people view and use the internet.

What is Web3

This is the third-generation internet that enables users to operate in a decentralized and trustless environment. As previously mentioned, it’s built on blockchain technology providing an immutable and secure internet space. Because of these features, it offers more autonomy to you as an internet user. Some of the benefits that Web3 offers include:

  • No third party or intermediaries are involved
  • Better cybersecurity
  • More customer trust
  • Improved customer experience
  • Better and transparent supply chain processes

As a result, Web3 could be the turning point of the internet as you know it as it could potentially and significantly overhaul cyberspace. However, while it may not entirely eliminate the internet as you know it today, it may be the safer alternative to the other generations of the internet. This is especially true when there are reliable Web3 security solutions.

Some of them like security and privacy concepts like zero-knowledge proofs and homomorphic encryption provide better security guarantees in Web3 applications. As the popularity and shift towards Web3 continue to grow, you can also expect to see higher growth in its use cases. Have a look at the main concepts that Web3 relies on:

 Decentralized systems

Web3 is based on decentralized systems built on blockchain and they operate without the reliance or interference of intermediaries. According to reports, the decentralized applications (dApps) user market continues to surge despite the volatility in the crypto world. The key ideas of a decentralized network that Web3 draws benefits from include the following:

  • Peer-to-Peer Networks: This is the ability of nodes on a network to communicate directly to each other without any interference or simply reliance on a central governance or third parties. Such networks help users to connect privately and securely without using any centralized servers.
  • Distributed Ledger Technology (DLT): This is a decentralized database running on blockchain that records transactions on a network. It uses cryptography to secure transactions and creates and updates records in real-time and for all users to see.
  • Consensus Mechanisms: These are the set of rules that govern how nodes on a network agree on a shared state. The work of the consensus mechanism is to ensure the validity of transactions and that nodes have the same database copy.

Decentralization is an important aspect of Web3. It enhances trust by giving users more control over what they can and can’t share on the internet. Instead of users having to ask for ‘permission’ from governing parties as is the case with the other generations of the internet, they have full control of their info and data and how it’s used. Popular decentralized Web3 platforms, include Ethereum, Filecoin, and Polkadot.

Interoperability

This is the ability of blockchain networks’ ability to connect, communicate and interrelate with each other. It plays a critical role in the growth of Web3 as it enables users to seamlessly access and move data and assets between networks. In return, this allows for proper communication and collaboration.

Apart from the aforesaid benefits of interoperability in Web3, it plays specific roles in individual industries. For example, the healthcare industry can significantly reduce processing time for patient information by easily communicating with other networks and consolidating data. This is particularly helpful when the transfer of care is taking place. The new medical institution or caregivers will have access to full patient history and information without delay.

Smart Contracts

The simple definition of smart contracts is they are self-executing agreements whose terms are written in code. They operate on decentralized networks and automatically execute when parties meet the pre-set conditions and abort if they aren’t met. This means they provide a safer space for transactions to take place without the risk of entering into a fraudulent deal.

In the Web3 network, smart contracts are the engine that drives trust and credibility in transactions. They remove the gray areas and facilitate the smooth running of transactions between parties unknown to each other. Ethereum is the most popular smart contract network but others such as Binance Smart Chain and Cardano are also popular with developers.

Decentralized Autonomous Organizations (DAOs)

These are essentially a form of digital democracy, where members can propose, and vote on changes,  and decisions in a trustless decentralized space. Just like smart contracts, DAOs are governed by their own sets of terms and rules. The rules in DAOs are encoded in smart contracts as the place for execution and enforced by the network itself.

DAOs also operate independently of governing bodies like banks or governments.  For instance, you can create venture capital funds or an online community that is run by members. You can also use them to create dApps and services or use them to handle your digital assets portfolio and other forms of value.

With that in mind, you can see why DAOs represent an exciting frontier for Web3. Their role in creating dApps can’t be overstated.

Non-Fungible Tokens (NFTs)

NFTs are digital assets created on blockchain to represent ownership of a digital item or piece of content. They have become a key component of Web3, as they fit right into the decentralized spaces.

NFTs allow the creation of unique digital assets whose value is mainly pegged on their rarity, uniqueness, community, and utility. They’re verified, and transferred on a blockchain and can represent anything from artwork and music to virtual real estate, moments, and even tweets. NFTs have gained significant attention in recent times, with high-profile sales fetching millions of dollars.

The outcome has been an increased interest in using NFTs in many ways, such as digital identity, voting, gaming, and product tracking in the supply chain process. The use of NFTs fits well within the broader Web3 ecosystem. They enable new types of dApps and economic models. For this reason, they are a key concept in the Web3 environment.

What Web3 holds for the future

The concepts discussed here are all integral parts that will continue to influence the development and uptake of the decentralized web.  Web3 will change the way people utilize and engage with the internet. With its emphasis on security, community-driven power, and transparency, Web3 is likely to empower everyone by creating a more equitable and decentralized web. Don’t allow your business to be left behind. Research and find ways you can utilize the decentralized web for personal and business growth.

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