How is Blockchain and Web3 Related?
The term Web3 has been often confused with Blockchain, NFT, and the metaverse. This term should not be interwoven as Blockchain serves as the foundation of Web3. However, the decentralised web, Web3, also depends heavily on technologies like AR, VR, IoT and many other things completely unconnected to blockchain or digital currencies. The third generation of the internet, known as Web3, is based on blockchain technology.
Before we go into the relationship between these two terms, let's get to know what blockchain and Web3 are.
What is Blockchain?
Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain.
To understand how blockchain works, read our blog post-Blockchain Explained — A Beginner’s Guide to Understanding Blockchain
What is Web3?
Web 3, sometimes called Web 3.0, is an idea for a new iteration of the World Wide Web which incorporates concepts such as decentralization, blockchain technologies, and token-based economics. Web3 browsers (dApp) help users interact with decentralized applications built on blockchain technology.
The Relationship Between Blockchain and Web3
Decentralized apps (DApps) can analyze information in a Web3 environment with the use of technologies like machine learning, big data, artificial intelligence (AI), the Internet of Things (IoT), augmented reality (AR), virtual reality (VR), and others. For example, virtual reality products like headsets are an outstanding technological innovation necessary for accessing and interacting with the virtual world but are not based on the blockchain. However, these innovations are utilised to boost the effectiveness of blockchain technology rather than being based on cryptocurrencies or blockchain technology.
Blockchain therefore significantly contributes to the development of Web3's infrastructure by enabling businesses to decentralize Web2 services like cloud computing, social networking, databases etc.
Can Web3 Exist Without Blockchain?
Although blockchain is the building block of Web3. However, the decentralized web also relies on technologies like AR, VR, IoT and others unrelated to blockchain or digital currencies. The third generation of the internet, known as Web3, is based on blockchain technology.
Therefore, for a full-fledged utilisation of the new web iteration Web3, so much more than blockchain technology is required. For instance, the combination of AI and blockchain will undoubtedly give organisations a better way to manage confidential data.
How Does Cryptocurrency Relate to Blockchain and Web3?
Cryptocurrency and Web3 exist on a decentralized network of computers, called a blockchain, that keeps track of all transactions made. However, each transaction must be signed in order to initiate a transaction in Web3, and some transactions also call for the payment of a "gas fee," which is used to reward blockchain validators and requires a cryptocurrency.
Blockchain technology is therefore necessary for Web3 and cryptocurrencies' existence, and Web3 needs cryptocurrency to validate transactions. through the Blockchain. For more details on how cryptocurrency and blockchain work, read our blog post The A-Z of Cryptocurrency
The major issues with today's internet could be resolved by Web3 while limiting the influence of the tech's big players. In contrast to physical reality, it is still mostly an aspirational vision. Nevertheless, the technologies that will presumably support the following version of the Web are already under development.
Blockchain and crypto are sometimes considered to be the technologies that are most likely to bring in the Web3 revolution because they are created to enable decentralized, permissionless, and trustless interactions. Additionally, blockchain technology and digital assets do not compete with other important Web elements like augmented reality, virtual reality, and the internet of things because they are more likely to produce the most promising results when integrated.