Blockchain and Web3

Introduction

Recently cryptocurrencies have driven huge attention from people in the industry as well as academia. It’s getting popular due to its robust and secure nature.

It works on the fundamentals of a decentralized system where not a single party or organization handles all the power, in this system power is distributed among majorities like democracy and a consensus mechanism exists.

History

1991: A cryptographically secured chain of blocks is described for the first time by Stuart Haber and W Scott Stornetta.

1998: Computer scientist Nick Szabo works on ‘bit gold’, a decentralized digital currency

2000: Stefan Konst publishes his theory of cryptographically secured chains, plus ideas for implementation

2008: Developer(s) working under the pseudonym Satoshi Nakamoto released a white paper establishing the model for a blockchain

2009: Nakamoto implements the first blockchain as the public ledger for transactions made using bitcoin.

2014: Blockchain technology is separated from the currency and its potential for other financial, inter-organisational transactions is explored. Blockchain 2.0 is born, referring to applications beyond currency.

The Ethereum blockchain system introduces computer programs into the blocks, representing financial instruments such as bonds. These become known as smart contracts.

How does it work?

It works on the hash code which is stored by each block and a chain is made using the block.

In the above diagram, we can see that based on DATA 1 a hash code is generated #01011 which hash code is stored by the second block DATA 2, and based on information in DATA 2 another hash code is generated #01012.

If anyone tries to manipulate with data or hash code, the link between data will break and it gets disconnected from the chain. So, to make any change a person needs to change all the block values which become very hard to implement and this makes it immutable.

The data are stored on the nodes which are computers owned by blockchain developers throughout the world and no main data center or central hub is available which reduces the single point of failure.

WEB 3

This is an idea to improve our Web from Web 2 to Web 3 where the internet will not be owned by tech giants (Google, Meta), It will be owned by us all the internet users throughout the world. Blockchain is going to be one of the most crucial parts of it.

WEB 1: This phase of the web was Read-Only. In this phase web was limited to websites or information as one way of communication, you can’t interact with it.

WEB 2: This phase of the web is to Read and write. Today we can share anything on the internet as well as consume information from the internet which is more interactive and useful.

WEB 3: In this phase, we will be Read, Write, and own. In this phase, we can own every piece of information which we share on the internet. We will have proof that the information was shared by me.

Advantages

· Enhanced security

· Greater transparency

· Instant traceability

· Increased efficiency and speed

· Automation

Disadvantages

· Private Key Issues

· Extremely Volatile

· Issues in Scalability

· Security Issues

· Data Modification is Difficult