Web3? Blockchain? Cryptocurrency? These terms can be confusing to grasp because on one hand, they feed into each other but they actually differ from each other in important ways. In fact, many people use them interchangeably - which needs to stop.
But don’t worry - clarifying complex concepts is what we are all about here at At Scale.
Let’s start with the definitions 👇
Crypto is short for cryptocurrency - a digital or virtual currency that uses cryptography to secure and verify transactions and to control the creation of new units. Bitcoin was the first and most well-known cryptocurrency, but there are thousands of different cryptocurrencies in existence, each with its own unique features and use cases.
Blockchain is a decentralized digital ledger that records transactions in a secure and transparent way. Each block in the chain contains a record of multiple transactions, and once a block is added to the chain, it cannot be altered or deleted. Blockchain technology is often used to support cryptocurrencies, but it can also be used for other purposes, such as supply chain management, digital identity verification, and more.
Web3, also known as Web 3.0, is the next generation of the internet. It is characterized by a decentralized architecture that is built on top of blockchain technology and other decentralized technologies. Web3 aims to create a more open and transparent internet that is not controlled by a few powerful entities but is instead owned and controlled by the users themselves. Some of the key features of Web3 include decentralized applications (dApps), decentralized identity systems, decentralized storage, and more.
How they differ from each other
So, how are these concepts connected?
Crypto, blockchain, and Web3 are all related to each other, but they differ in their specific use cases and applications. Crypto refers to digital currencies that use cryptography to secure and verify transactions, while blockchain refers to a decentralized digital ledger that records transactions. Web3 is the next generation of the internet that is being built on top of decentralized technologies like blockchain to create a more open and transparent internet.
Crypto and blockchain are closely related, as many cryptocurrencies are built on blockchain technology. However, not all blockchains are used for cryptocurrencies, and not all cryptocurrencies are built on blockchain technology. Web3 is a broader concept that encompasses both crypto and blockchain, as well as other decentralized technologies that are being developed to create a more open and decentralized internet.
Simply put, “blockchain is the technology behind Web3 and Web3 is the next generation internet built on blockchain technology. Cryptocurrency or crypto tokens are "internet money" or digital assets that provide an economic incentive model for validating transactions that occur on a given blockchain.” (SimpleShowing)
The tweet that inspired this post 👆