We can go back in 1990 where Internet was basically all static files that was read-only by the user. That was the Web1. In 2002 Web2 took the scene, adding interactivity, and the major companies like Google, Facebook, Netflix, and so on came up. Now, from 2020, Web3 is constantly taking space over Web2. It basically mantain the interactivity of Web2, but with the "security" of the "readonly" mode of Web1.
Web2 Is based on BlockChains. Let's see what they are.
BlockChains are a new Data-structure similar to Linked Lists, with the only difference that each node (block) is read-only. Every block has it's own data, an identifier (hash) and the identifier of the previous block. If the value of a block changes, the hash is completely different. So, to avoid the breaking of the block chain, each block it's read-only. You cannot modify it. You can only add block at the end of the cain.
Blockchain is Immutable
Another big point of blockchain is that it is Distributed. Every single user on the network has the same copy of the entire blockchain. If a user add a block, each user will have that difference. But, thata change must have the consens of the other computers. To apply the change to everyone to all block chains, you have to obtain at least the 51% of consenses. So:
All changes must be "verified"
If an hacker try to change something, it must first be "verified" by all other block-chain possessor's computer. In the worst case, they own 51% of blockchains and so they can verify changes.
This is the main difference between Web2 and Web3:
All data are Decentralized
Meaning that if you lose a block chain, every other single user will have the same whole copy on it's machine. You'll NEVER lose data entirely, like it happens in Web2 (if the servers breakes, you lose everything).
Bitcoins use this technology :D, where data = All transactions.
Blockchains are most used in cryptocurrencies. They don't rely on central authorities, but the rules are distributed in the entire blockchain networks. Since the intorduction of Bitcoins, Etherium, Dodge, and many other came up. How they differ from each other?
There are 3 main distinction from one to another:
- The most common distinction is that some uses Coins, and some Tokens.
- Some store values, and some are transactional.
- Finally, some can be mined ans some cannot.
The cryptocurrency Etherium introduced to us the concept of Smart contracts. We can now store any data in the blockchain, also, code. Smart Contracts are the most important concepts in the world of Web3. They automate the execution of some agreements (contracts) without any 3rd party interpretation. When the right condition is met, they can trigger a series of resulting actions. The code execute whenever a transaction is sent to a specific address. A Smart contract follows a series of "if" and "else" conditions written in the contract's language. All the rules and the data can be read by everyone, so, we no longer need to trust companies like Apple, Google and so on, to manage our data, because contracts are by definition permantent, immutable and decentrlized.
Summarizing, Smart contracts are:
- Automatic and accurate
- Transparent
- Immutable
- Secure and distributed
- Need to be tested carefully
IPFS (InterPlanetary File System) is a way for hosting and sharing files in a distributed way (just like blockchains). Each file is hashed, and using it you can lookup any file from any computer partecipating in the IPFS. The same file, because will have the same hash of the duplicated one, will never be present twice, so it's memory efficient. This method could easily replace the HTTP if you think about it. One of the common uses with IPFS is storing NFTs (Non-Fungible Tokens).
Imagine a Smart Contract that create objects called tokens and save them in the blockchain and manages them as they are transfered to a user to another. NFTs are basically this. The process of creating an NFT is called Minting (not "mining"). The "Non-Fungible" means that you can't exchange an NFT with another for the same value. Each token has it's own value, unlike bitcoins where you can exchange 1BTC for another 1BTC and have the same value. Each NFT is unique and are not interchangable.
Decentralized Autonomous Organizations (DAOs) are another way of using smart contract, this time to make decision and enforce the rules of organizations. A DAO is managed by smart contracts, and can prevent "corruption", decision behind close doors, and so on, because, for example, in a voting system, the result are calcualted by the DAO and you can only vote with tokens. DAO can possibly become an important part of our life. DAOs are fair in democrathic operations, at least in practice.