Chapter 1: Introduction to Web3 Vocabulary

The concept of Web3 is gaining traction, as more businesses are venturing into the crypto space. Major brands like Instagram, Adidas, and Stripe have begun adopting blockchain technology. While many are familiar with Bitcoin and various cryptocurrencies, understanding where to start can be daunting. This guide aims to clarify the fundamental aspects of Web3.

Let's jump right in!

Web3:

Web3 represents the third era of the internet, characterized by decentralization, meaning no single entity has control over it.

In the initial phase of the internet (Web 1.0), we encountered static pages where users could only read content. The next phase (Web 2.0) introduced dynamic websites, allowing user interaction—think of platforms like Twitter, Medium, and YouTube. However, control remained with the site owners, leading to issues such as data breaches and unauthorized data sales.

For instance, if the CEO of Twitter supports a specific political figure, the platform could amplify that perspective, potentially influencing public opinion significantly. This highlights the need for a decentralized system where no single entity can dictate the flow of information. Hence, we turn to Web3, which emerges as a potential solution to these issues, along with its associated tools like Dapps, DeFi, and DAOs. Don’t worry; we will explore these terms shortly.

The first video titled "10 Web3 words you must know in 2024 - Part 1" offers insights into crucial terminologies in the Web3 landscape.

Cryptocurrencies:

Cryptocurrencies, such as Bitcoin, Ethereum, Cardano, and Dogecoin, are digital currencies used for various transactions. Understanding these currencies is vital as they play a central role in Web3 development.

Blockchain:

The backbone of cryptocurrencies, blockchain technology enables secure transactions and data storage. It serves as the foundation of the entire Web3 ecosystem.

To visualize, think of blockchain as a series of interconnected blocks, each containing data.

Smart Contracts:

In the realm of blockchain, smart contracts are self-executing programs that facilitate transactions without intermediaries. Given that Web3 is decentralized, these contracts are immutable and secure.

NFTs:

NFTs, or Non-Fungible Tokens, represent unique digital assets on the blockchain. Unlike fungible tokens, which are interchangeable (like Bitcoin), NFTs are one-of-a-kind, often seen in art and music.

Currently, many companies are experimenting with NFTs, yet their full potential can be realized with thoughtful implementation.

Dapps:

Decentralized applications (Dapps) function similarly to traditional apps like Instagram or Twitter but operate on a blockchain. Examples include Curve, Yearn Finance, and OpenSea.

DAOs:

Decentralized Autonomous Organizations (DAOs) are member-owned entities that function without centralized control. Think of them as companies governed collectively by their stakeholders.

DeFi:

Traditional finance relies heavily on centralized institutions, often leading to unfavorable outcomes for consumers. DeFi, or Decentralized Finance, aims to revolutionize this by providing decentralized banking solutions, allowing users to earn through methods like staking and liquidity provision.

The second video titled "10 Web3 words you must know in 2024 - Part 2" continues to shed light on essential Web3 concepts.

As you embark on your Web3 journey, these terms will serve as a foundation for understanding the evolving digital landscape. Thank you for reading, and I hope you found this information useful! For more resources, visit PlainEnglish.io and subscribe to our newsletter or follow us on Twitter, LinkedIn, and Discord.