What is Blockchain?
Blockchain technology is a type of distributed journal that operates in a decentralized manner. Blockchains do not require a static and central storage server. Instead, blockchain saves all information in the form of distributed nodes. At the same time, blockchains do not have a centralized regulator or operator to keep it working.
Instead, blockchain networks allow validators or miners to verify all the recorded data on the network with the use of a consensus mechanism such as proof-of-work or proof-of-stake. In this manner, blockchain is secure and operates in a decentralized manner.
Advantages of Blockchain
- Decentralized governance
- Universal transparency
- Improved cybersecurity
- Cost-effective and better performance efficiency
Disadvantages of Blockchain
- Slow transaction cycle
- High energy input
- Technical complexity
- Scalability limitations creating isolated networks
- Threat of scams and exploits
What is Web 3.0?
Web 3.0 is a type of semantic internet that is considered the next evolution of the internet. This concept was first introduced by British computer scientist Gavin Wood in 2006. This version of internet focuses on bringing greater autonomy for individual end users.
With Web 3.0, internet users will not only have individual accounts and personalities but it will be possible to have legal ownership of the online presence and space.
In addition to semantics, Web 3.0 also focuses on making the internet a more immersive experience using technologies such as VR and AR for 3D rendition. At the same time, Web 3.0 also makes use of AI and machine learning as a way to automate a sizeable portion of programming and functionalities.
Furthermore, Web 3.0 also incorporates blockchain components such as NFTs and cryptocurrencies to monetize every portion such as avatars, themes, digital real estate, and other types of personalized data.
Advantages of Web 3.0
- Decentralization of end user interface and data autonomy.
- Democratic governance of internet
- Data transparency and monetization
- Innovative implementation of blockchain, AI, ML, AR, and VR technologies
Disadvantages of Web 3.0
- A complicated amalgamation of various technologies serves as entry barrier for mainstream adoption.
- Lack of agility and scalability limitations on account of nascent nature of Web 3.0 sector.
- Regulatory uncertainty that can hinder enterprise adoption and professional funding.
- Lack of awareness and education allowing scammers to target new users.
Blockchain Vs Web 3.0
Centralization and Decentralization
The central difference between Web 3.0 and blockchain is the percentage of centralization. For the most part, blockchains operate in a decentralized fashion. However, there are also privatized forms of blockchains that can assign a centralized authority for operations.
In contrast, Web 3.0 leans in favor of decentralized programs such that users have more autonomy over personalized data and retain digital proprietorship in an individual capacity.
Transaction and Interaction
The main purpose and utility of a blockchain network is to facilitate transactions. Blockchain networks usually issue different types of cryptocurrencies that allow users to exchange value. These tokens are effective medium of exchanges that are used to perform secure and transparent transactions and maintain immutable records in the form of data blocks.
On the other hand, the core function of Web 3.0 is to provide a medium for interaction. In this manner, Web 3.0 allows users to interact with their peers and new users in a decentralized and democratic setup.
Cryptocurrencies and Decentralized Applications
Blockchain networks are well-known for issuing and managing cryptocurrencies such as Bitcoin and Ethereum. A blockchain network has various mechanisms to issue, burn, manage, and record the cryptocurrencies that it has issued. Meanwhile, Web 3.0 put emphasis on creation and development of decentralized applications (dApps).
It is important to note that both blockchain and Web 3.0 projects make use of decentralized applications. However, the utility and application of decentralized protocols in both sectors is distinct from each other.
Blockchain technology is serving as a building block for Web 3.0 projects. However, Web 3.0 has remained a theoretical concept at this point that requires more innovative solutions to morph into a tangible reality.