Blockchain is a decentralized, distributed ledger technology that uses cryptography to secure and validate transactions. It allows multiple parties to have access to the same data, and once data is entered it can't be altered, it creates a tamper-proof record of transactions.
One of the most well-known examples of blockchain technology is Bitcoin.
Blockchain is the technology behind Web3, Web3 is the next generation internet built on blockchain technology.
What is Web3?
Web3, also known as Web 3.0, is the next evolution of the internet and refers to the decentralized version of the internet. Web3 is built on the blockchain technology and enables the creation of decentralized applications (dApps) and smart contracts.
Web3 allows for a more secure, transparent and decentralized internet where users have more control over their data and can make transactions without intermediaries.
Web3 enables digital identity, which is the representation of an individual in the digital world. It encompasses all the information about a person that is available online, including personal information, social media profiles, online activities, and more. In the context of web3, digital identity takes on a new level of importance as it relates to decentralized applications, smart contracts, and blockchain-based transactions.
Crypto vs Web3
As mentioned, Web3 is the decentralized internet designed to flip control of data and apps from centralized entities towards communities and individuals.
As a result, any tech used in the pursuit of this end goal can be considered Web3, not just Blockchains. In other words, Web3 can be the collective term for the industry and parties working to build Web3 applications and projects.
Cryptography & Cryptocurrency
Cryptography is like a secret code that helps keep information safe. Imagine you want to send a secret message to your friend, but you don't want anyone else to read it. So you use a special way to write the message that only your friend can understand. This is called encryption. And when your friend receives the message, they use a special way to read it that only they know. This is called decryption.
So, cryptography is a way of keeping information secret by using codes and keys, and it's used to protect information in many different areas, such as online banking, email, and even cell phones.
Cryptocurrency, on the other hand is a digital asset. It can also be used as a digital currency or even a monetary ‘reward’ given to engineers and other software developers who validate activities on a Blockchain network. This enables the essential trustless and automated economic security of the infrastructure.
For example, you can trade crypto tokens with others as a medium of exchange because they do have ‘value’. ‘Cryptos’ are designed to support blockchain economies, not to be used as replacements for cash. On the forefront of crypto trading, news and analytics is Binance - which is free to join.
Blockchain vs Crypto
Blockchains are a data and automation infrastructure that records ‘transactions’ (or just data - it’s not always financial) that is maintained by a decentralized network of nodes (or actors with computers). Some blockchains can run applications or business logic (by smart contracts) allowing us to launch apps that can run autonomously and in perpetuity.
There are hundreds of different blockchains, many of which interact with each or with Web2 apps using a blockchain API. Some of the most widely adopted chains include Bitcoin, Ethereum, Ripple and Solana.
Each chain has its own token or currency and each token has an inherent "market cap" so to say - which represents the value of all of the token holdings. Some of the top crypto tokens include BTC, ETH, SOL, USDT and others.
DAO's (Decentralized Autonomous Organizations) and Blockchain
Decentralized Autonomous Organizations (DAOs) are an innovative concept made possible by the advent of blockchain technology and web3. A DAO is a type of organization that operates without a central authority or middleman, using blockchain technology and smart contracts to make decisions and execute transactions.
In a traditional organization, decisions are made by a central authority, such as a CEO or board of directors. However, in a DAO, decision-making is decentralized and democratic. Members of a DAO can propose and vote on changes to the organization, including how funds are allocated, what projects to pursue, and who should be involved.
DAOs are made possible by blockchain technology, which provides a secure and transparent way to manage transactions and keep track of ownership. Web3, or the decentralized web, is also an important component of DAOs. Web3 provides the infrastructure for decentralized apps and services that can run on the blockchain.
In summary, Blockchain is the technology behind Web3 and Web3 is the next generation internet built on blockchain technology. Cryptocurrency or crypto tokens are "internet money" or digital assets that provide an economic incentive model for validating transactions that occur on a given blockchain.