Web3
Concept
Web History
| Web | Description |
|---|---|
| Web1 | Static pages (read) |
| Web2 | Social, centralized platforms (read/write) |
| Web3 | Decentralized, blockchain-backed apps (read/write/own) |
Decentralized
Take Discord and Matrix as an example. Matrix is the decentralized alternative of Discord. Data are stored decentralized among different users. A use can choose which server to store their data, but the hosting server can access the data. With Discord, you have no choice. One of the downside of using decentralized service is poorer network performance, less efficiency.
Blockchain
Blockchain is a distributed, trustless, transparent, append-only database. A block has it's own data, hash and previous block hash. A hash is derived from it's data. Once a block is appended, it cannot be edit or deleted. A full node in the network keeps a copy of the entire blockchain (700GB as of 2026). The data lives across many computers in the network for validation, all full node have to verifies the blockchain. To validate a block, validation computation is required to be done link by link. This computation is fast and easy.
Bitcoin creates a block every 10 minute to slowdown the transaction for security. The block size is about 1-4 MB. 1 BTC is 100 million satoshis. Lightning Network is a payment channel network that allows for faster and cheaper transactions.
Smart Contract
Once a smart contract is created, it can't be changed and the code lives forever on the chain. It ensure the creation and validation of blocks in a blockchain.
Wallet
Crypto wallet stores your private and public (address) keys. When you do a cryptocurrency transaction, you digitally sign a transaction using your private key in the blockchain records, and every full node verifies the signature.
Hot wallets like MetaMask are always connected to the internet, suitable for daily use. Cold wallets are offline, safer but inconvenient, suitable for long-term use.
Decentralized App
dApp includes interaction with a blockchain smart contracts, validators, wallets, and users through frontend UI.
Mining
Use of computing power to create new blocks. In BitCoin, Proof of Work is done by a miner that calculates a hard math problem through brute-force method to get a new block by finding the nonce(random number) that satisfies the hash condition to get string with specified prefix. BitCoin will control the difficulty of mining to have a stable block creation rate of 10 minutes. The reward of transaction fee and newly minted bitcoin of 3.125 BTC as of now is paid to the miner and halves roughly every 4 years.
Non-Fungible Tokens
NFT (Non-Fungible Tokens) are unique token that represent ownership of a digital item and lives on a blockchain. They are not tradeable, but can be transferred. They are commonly used in games, art, music, certificate, membership and many more as a reliable proof.
Decentralized Autonomous Organization
DAO (Decentralized Autonomous Organization) is a smart-contract-powered organization with rules and governance encoded into code. No manager, just token holders who vote. Treasury is managed by proposals and on-chain voting.