Cryptocurrency and blockchain are the building blocks of Web3. However, the decentralized network also relies on technologies such as AR, VR, IoT, and other technologies that have nothing to do with blockchain or digital currencies.
The third generation of the Internet, known as Web3, is based on blockchain technology. However, technologies like machine learning, big data, artificial intelligence (AI), internet of things (IoT), augmented reality (AR), virtual reality (VR) and others enable decentralized applications (DApps) to analyze information in complex human in a similar way. in a Web3 environment.
For example, virtual reality headsets will create an exceptional shopping experience, allowing customers to interact with products before making a purchase. However, these technologies are not based on cryptocurrency or distributed ledger technology but aim to increase the efficiency of blockchain technology.
Moreover, blockchain plays an important role in building the infrastructure for Web3 by allowing organizations to decentralize Web2 services, including cloud computing, social networking sites, and databases. Therefore, the combination of AI and blockchain technology will undoubtedly give organizations a better way to manage confidential data sets.
By validating the provided data, the AI technology can quickly complete the process request and the smart algorithm will help in making quick decisions regarding issuing funds or approving credit. Also, data sets can be effectively protected via the blockchain. Similarly, other technologies such as AR and VR are crucial to defining the metaverse, exploring new ideas, and elevating virtual experiences.
Furthermore, cryptocurrencies eliminate the need for a trusted middleman by allowing Web3 users to use tokens such as Ether (ETH) to send and receive money. However, cryptocurrencies support peer-to-peer payments and can act as a native digital transfer method. The blockchain lacks the incentive system for sharing the network without cryptocurrency. Also, users will not have anywhere to store cryptocurrency without cryptocurrency wallets.
Additionally, Web3 aims to be permissionless, untrusted, and open to all, as it embraces the ethos of encryption. Similarly, non-fungible tokens (NFTs) enable users to transparently show proof of ownership for items such as in-game assets, digital art, personal data, and more.
How does Web3 relate to the blockchain?
Blockchain is the crucial technology underpinning the decentralized web and changing the fundamental dynamic of the current version of the web, where companies pressure consumers to get as much data as possible.
Blockchain-powered tokens and shared ownership address the fundamental problem in centralized networks: value is accumulated by a single enterprise, which then conflicts with its stakeholders. Additionally, data independence is ensured by Web3 DApps through the use of blockchain technology.
Due to decentralization, users become the ultimate content owners as there is no central authority that checks the data. In addition, DApps are changing models of community participation and governance by allowing users to vote and submit ideas, providing everyone with an equal opportunity to participate in project implementation.
Related: What is a Decentralized Autonomous Organization, and How Does a DAO Work?
In addition to the above, the blockchain supports the creation of crypto domains, such as .eth, . crypto and. dao. A decentralized crypto domain replaces a human-readable address of a user’s crypto wallet with an IP address, and these Web3 domain names can be traded as NFTs on non-perishable token markets.
A decentralized domain name that represents a blockchain address is desirable because it is an easy-to-remember address for sending and receiving cryptocurrencies, similar to an email address.