Data is where it all began. It is the basis of the web, whether it is statically presented as information or generated by one's activity on the web. Data is the passageway that led us to where we are now which is Web 3.0. Let me put it this way, firstly, data was statically presented - Web 1.0. Then users could now interact with that data - Web 2.0. Finally, algorithms will use that data to improve the user experience. This is the basic concept of web 3.0.
The web has since grown from a static format comprising of read-only data into a more diversified, secured, and permissionless format where users can now read, write and own their data. While this can be a double-edged sword, there are reasons to believe that the transition into web 3.0 will be the solution to many of the problems we have in the world today, which mostly revolve around trust.
Web 3.0 comprises three fields which are: Artificial Intelligence, Machine Learning, and Blockchain. While the former two are being used in most web 2 companies like YouTube, Amazon, and the like. The latter (blockchain), which has been there for a long time is still in its infancy when it comes to acceptability and usage. I believe that blockchain is the core of Web 3.0.
Why Blockchain?
Blockchain dates far back to 1991 when it was first proposed by Stuart Haber and W. Scott Stornetta, two mathematicians who wanted to implement a system where document timestamps could not be tampered with. Its implementation was not until 2009 when a certain Satoshi Nakamoto which is a pseudo-name, used it in the creation of the first decentralized digital currency, Bitcoin. Bitcoin has gained a lot of traction since its creation. The basic blockchain concept is to create a database, like any other database but with its data stored in blocks which are then mathematically linked together via cryptography.
The centralized nature of web 2.0 has generated a lot of concern regarding the use of user-generated content that results from the architectural design of most of its systems. This is the way a web 2 application is designed. It has a front end with an interface design that enables any user to interact with it. It also has a back end. This is where all of the data generated as a result of the user's interaction with the application is stored.
Where are all those data stored?
All of the data generated by a user is stored on a centralized server owned by the company whose application is being used. This creates an unbalanced relationship between users and the application. This centralized way of storage makes the data vulnerable to attacks and most of this data is being sold to advertisers. As the saying goes, "When it's free, then you are the product."
With that being said, trust goes out the window. It's sad to know that most users of web 2 are aware of this, but then again, there is nothing they can do about it. Web 3 brings a solution where the implementation of blockchain can bring that data ownership and control back to the user.
What is Blockchain?
Blockchain is a decentralized distributed database of immutable records where transactions are protected by strong cryptographic algorithms and the network status is maintained by a consensus algorithm
Let's break it down:
Decentralized - this means that it has no central authority. In other words, no government, company, or individual has control over the network.
Distributed database - blockchain uses distributed ledger technology which provides a single source of truth. This enables each user of the network to own a copy of the ledger, which builds trust.
Immutable records - this simply means the records on the blockchain network can not be changed.
Cryptographic algorithms - first off, let's define what an algorithm is. An algorithm is a precise step-by-step computational procedure that possibly begins with an input value and yields an output value in a finite number of steps. Cryptography is encrypting plain text into ciphertext using various cryptographic methods or functions.
Consensus Algorithm - This is used to achieve some sort of agreement on the network.
The Structure of Blockchain
Block - where all the transactions are stored
Chain - a mathematical way of connecting each block to the other to strengthen immutability.
Network - a collection of nodes. Nodes are all the users of that network.
How Does Blockchain Work?
Firstly data is received by the network, then it is verified after which it is stored in the block. The data in the block and the hash of the previous block are hashed to create a unique string of numbers and letters. This is called the hash.
The hash generated will be integrated at the bottom of the block and also at the top of the next block. Once the second block is complete, the hash noted at its top will contribute to obtaining the next block's hash, thereby creating a mathematical chain of blocks. The longer the chain, the stronger the network.
Every block consists of a pointer that acts as a link to the block before it. So every block has a header that has the transaction data, timestamp, and also the hash of the previous block using the hash pointer.
Why Are Blocks Necessary?
Blocks are necessary to maintain the order of transactions in the blockchain and each of these blocks is linked to each other in a sequential form such that whenever a new transaction comes in, it is added to the block.
This is the difference between the traditional database and blockchain. Blockchain stores data in groups as blocks in which each block has a certain storage capacity, whereas, the traditional database stores its data in a table-like structure.
Blocks have fixed storage capacity, which led to the problem of scalability. Other layer-two blockchain protocols like Solana and the like, provide some sort of solution to this problem.
Types of Blockchain
There are three types of blockchains:
Public Blockchain: These are open blockchains like Bitcoin and Ethereum. They are public because anyone can join their network by simply downloading the software and running the nodes on their device. You don't need to take anyone's permission which makes the network permissionless.
Private Blockchain: In this type of blockchain, all permissions are kept centralized in an organization. It allows only specific people in the organization to verify and add transactions to the blocks but everyone on the internet is generally allowed to view them. Examples are block stacks and multi-chain
Consortium: This is a type of private blockchain managed by a group of individuals or a consortium of members. Only a predefined set of nodes has access to write the data on the block. Example - Hyperledger.
How To Interact With Any Blockchain
Any user anywhere in the world can interact with any of the public blockchains simply by using a cryptocurrency wallet.
A cryptocurrency wallet is a wallet that enables a user to store, send and receive cryptocurrency. The most popular cryptocurrency wallet is the MetaMask.
Metamask is a cryptocurrency wallet that is used to interact with the Ethereum blockchain. It is a browser extension wallet that interacts with decentralized applications (dapps). It provides a seed phrase for login. This seed phrase is likened to a password and must be kept safe.
Used Cases For Blockchain Technology
It has been over 10 years since its first implementation. Blockchain has had multiple use cases and has penetrated many sectors of the economy. Below are some of the used cases:
Cryptocurrency - these are decentralized digital currencies
Non-fungible Tokens - We can create unique digital assets which have many used cases in most games and digital art.
Decentralized Autonomous Organization (DAO) - We can create a Decentralized Autonomous Organization that can vote and spend its treasury without the limitations of traditional companies.
Decentralized Finance (DEFI) - re-inventing finance in a decentralized way, open to everyone, and where regulations and rules are determined using smart contracts thereby cutting off 3rd parties.
There is a lot more information relating to blockchain and the different protocols out there but those are outside the scope of this article.
Thank you for reading...