Blockchain: More than just the new kid on the block

Blockchain, Web 3.0, cryptocurrency, and bitcoin are popular buzzwords that often creep into articles and blogs discussing the latest tech trends. Usually, when people hear terms to do with blockchain technology, it can sound like just another new, shiny technology on the block, added to the long list of things technologists need to work their way through to upskill. 

But this technology has the potential to be much more than just another fad – it can impact our world dramatically.

Making sense of blockchain, bitcoin, and cryptocurrency

So what do all these buzzwords actually mean?

Blockchain

A blockchain is a decentralized ledger of all transactions across a peer-to-peer network. With blockchain, users can confirm transactions without a central clearing authority. Each block in the chain contains several transactions, and every time a new transaction/asset appears on the blockchain, a record of that transaction is added to every participant’s ledger. An asset can be something tangible (such as cash, a house, or a car) or intangible (copyrights, branding, intellectual property, and patents). 

Cryptocurrency

Cryptocurrency is a digital payment system that doesn’t rely on banks to verify transactions. It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments, storing cash in digital wallets. 

Bitcoin

Bitcoin is the current, best known (and most popular) form of cryptocurrency  – and its the reason that blockchain technology was invented!

In his 2001 essay, ‘The Law of Accelerating Returns’, Ray Kurzweil argued that humans found it hard to understand their own future:

“Within a few decades, machine intelligence will surpass human intelligence, leading to The Singularity — technological change so rapid and profound it represents a rupture in the fabric of human history.”

Web 3.0 is part of this evolution – a technology the world is slowly adopting.

What is Web 3.0?

The dawn of the internet age began with the introduction of Web 1.0, which operated between 1991 to 2003.

During this time period, most internet users were consumers. Developers served static text and image content to their browsers. It’s important to note that while Web 1.0 was in operation, we weren’t seeing much in the way of dynamic HTML content coming from databases. The content creators during this era were the software engineers that served static content.

After the age of Web 1.0, we moved over to the glorious reign of Web 2.0.

A large portion of what we have today is derived from Web 2.0 – the first form of the interactive web. With Web 2.0, non-developers could create interactive content on the internet. You don’t have to be a developer to create social media content, a website, or web content in general – many different forms of templates and websites can help you build your content step by step.

Most web content creators operating today aren’t trained software developers. Most users with the highest following on TikTok, Instagram, Twitter don’t need to write a line of code to deliver content. Web 2.0 is a game-changer due to its ability to save and retrieve content from a database and dynamically deliver it to the web. With Web 2.0, data is retrieved from servers (data centers), then sent to the users’ browsers.

But today, there is an even better platform – and that is where Web 3.0 comes in.

You can read more about the evolution of the web here.

There are a few differences between Web 2.0 and Web 3.0, but one of the significant differences is decentralization. Web 2.0 works with data from some data centers, allowing individuals or corporations to call the shots.

The organization/individuals that own the servers determines results, and this is the way a typical Web 2 application operates (think of the big names such as Facebook, Twitter, Pinterest, LinkedIn, etc.):

  • They create and launch their application on the web.
  • They acquire users and establish a market strategy to monetize their platform.
  • They keep increasing their product offerings and develop ways to scale and generate more revenue for their platform.

The company, therefore, can control the movement of revenue, and the primary factor that allows this model to thrive is data. As the organization acquires more users, they have access to more data,  and they find ways to use this data to generate more revenue.

As a result of this, data-breach has become a big issue, and this is one of the things Web 3 hopes to resolve using decentralization.

Where does Blockchain fit into the mix?

Web 3.0 makes use of decentralized networks. With decentralized networks, developers are incentivized to create a stable network within the blockchain. This is why crypto-currency is often mentioned alongside buzzwords such as blockchain, decentralization, etc. This is the guiding principle of Web 3.0. Wealth on the internet could become more distributed as people become increasingly incentivized by their contribution to the blockchain.

While blockchain is a distributed, decentralized, and digital ledger, protocols and standards are guiding its use and access. There are also cybersecurity risks surrounding Web 3.0, making it more susceptible to cyber-attacks than Web 2.0 and more vulnerable to loss of funds.

Prophecy: The digital gold rush

Between 1896 to 1900, the gold rush in parts of Canada and the United States forced many people to relocate to areas where gold mines were situated. In fact, people were said to quit their lucrative jobs just to work at gold mines. 

Like the gold rush of the 1800s/early 1900s, there appears to be a current ‘gold rush’ – this time for digital assets, via digital mining. Individuals and organizations are beginning to prepare and ready themselves for the opportunities arising from widespread Web 3 adoption.

There are many ways people could buy digital assets, such as using Non-fungible tokens (NFTs). Just as the value of assets varies, the value of NFTs can also vary depending on a lot of parameters. Find out more about NFTs.

Blockchain technology can be applied in many commercial areas, such as gaming, payments, insurance, real estate, voting, logistics, and gambling.

If you’re already a technologist or developer, you can get started by learning how to develop for Web 3.0. For non-developers, you can be part of this evolution by understanding how blockchain works and finding areas for improvement.

The world needs designers, product managers, and other technologists to help understand how Web 3.0 works so innovation can continue – and new, unique products can hit the market.

This blog is adapted from an original article by Seun D. F., published in The Andela Way in November 2021.

If you found this blog useful, check out our other blog posts for more essential insights!

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