Catalogue - Key Takeaways Show
Blockchain technology has made waves in the field of cryptocurrency and many other fields while revolutionizing the industries. One key area that has significant development is Web3 and decentralised web. Web3 is an extension of current internet infrastructure which uses blockchain technology to create secure and decentralised network. But how to understand the relationship between blockchain and Web3, we will understand in this article.
What is Blockchain?
To understand the relationship between blockchain and Web3, it is necessary to define what each technology is. Blockchain is a distributed ledger technology that allows secure and transparent record keeping. The ledger system is made up of blocks that contain transactional data and is secured by using cryptographic techniques. The decentralised nature of blockchain makes it an ideal solution for creating decentralised systems, where no central authority can control data.
What is Web3?
Web3 on other hand is a term that is used to describe next generations of the internet. It is a decentralised web which aims to create more open and transparent internet using blockchain technology. Hence, Web3 is built on top of blockchain technology which uses smart contracts to automate transactions and execute code in a decentralised environment.
Relationship Between Blockchain and Web3
Relationship between blockchain and Web3 is one of mutual dependency. Blockchain technology provides secure and decentralised infrastructure which Web3 relies strongly upon. Whereas Web3 provides a use case for blockchain technology beyond cryptocurrency. Blockchain technology is used as a medium to secure and verify the transactions which occur on the Web3 network. Web3 uses blockchain technology to create decentralised applications which can be used by anyone and anywhere in the world.
Benefits of Web3
A primary benefit of Web3 is that is permits creation of decentralised applications or DApps. DApps are applications which run on decentralised networks on a centralised server or share a centralised network. Running on a decentralised network means that they are not controlled by a single entity. And hence, it is not subject to censorship and other forms of centralised control. DApps are built using smart contracts, that are self-executing contracts storing everything on the blockchain. Smart contracts are contracts that allow the automation of transactions and the execution of code in a decentralised manner.
Security and Transparency
Blockchain provides security and transparency which is necessary for the DApps to function. Because the ledger is distributed and secured using cryptography as a technique. Hence, there is no central authority to verify the transactions. This means that DApps are operated independently which makes them more secure and resistant to censorship.
Web3 Beyond Cryptocurrency
Blockchain was originally formed to facilitate cryptocurrency transactions it is now adapted in wide range of applications. Web3 also has the potential to create and facilitate new business models as well as revenue streams. Because DApps operate independently of any central authority and makes new opportunities for businesses to further create value. For example, a social media platform that is built on Web3 can allow users to monetize their content directly then relying on central authority. A classic use case is the recent announcement by Elon Musk that helps users and content generators monetize their content. Another example is Hundrx that allows users and content creators to attach their wallets and monetize their content as well as tweet replies.
Conclusion
In summary, blockchain technology and Web3 are two technologies that when coupled together create a more secure, transparent, and decentralised space for internet users to grow. Web3 also provides a use case for blockchain technology and a solid infrastructure to rely upon. Together, both have the potential to create new and innovative business models, revenue streams and opportunities for all users around the world. As Web3 continues to evolve it is likely that we can expect to see more innovative uses and further development of blockchain technology.
About Bitflex
Bitflex is a cryptocurrency exchange platform that offers traders a secure, easy-to-use, and convenient way to buy, sell and trade cryptocurrencies. Our platform has been designed with investors of all levels in mind, whether they are just starting out or experienced traders. We offer various features and tools to help users make the best trading decisions possible, including advanced charting and analytics, real-time market data, and various customisable trading interfaces. At Bitflex, we are dedicated to empowering our users and helping them reach their financial goals.
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