What Is Web3?
Web3 is the next evolution of the web that incorporates decentralization and a token-based economy via blockchain technology.
Imagine playing Monopoly with your family and friends. There is no game master who holds power over the players. Every player has visibility into the transactions of the in-game token (the “Monopoly Money” ), follows established rules and, at times, modifies them with majority voting. All players self-monitor to prevent cheating in the game.
Let’s break down the key terms:
- Decentralization means your data and decisions are not in the hands of a specific person, or entities such as big tech companies or local governments. Each transaction of value and decision-making is kept in a public ledger of the chain.
- A Token-based economy allows for the exchange of value between the participants, independent of the government-backed local currency of wherever they are participating from physically in the world. It allows people around the world to exchange value without borders, and without direct interference from a centralized organization.
- Blockchain is the tech behind the decentralized, token-based economy. It is a public ledger that keeps track of the values and exchanges that are verified by the participants of the chain. Instead of data being centrally and privately managed by local banks or big tech, who have direct influence on the data they manage on behalf of their users, a blockchain gives the power to the World Wide Web of communities.