Web3 can be a confusing place. If you\u2019re new, words like \u201cblockchain,\u201d \u201cNFT,\u201d and \u201csmart contract\u201d are opaque terms that do more to suppress curiosity than invite it. That skepticism shows up in the data: globally, just 1 in 10 working-age internet users own some form of cryptocurrency<\/a>, the digital tokens needed to engage with much of the Web3 ecosystem.<\/p>\n This is ironic, since Web3 is the latest version of the internet<\/a>, founded on ideas of accessibility and equity. Don\u2019t let the critics fool you; the stereotype that crypto and NFTs belong to an exclusive and unwelcoming \u201ccrypto bro\u201d niche is just that \u2014 a caricatured generalization. These tools are worth the learning curve no matter who you are (or how old you are) because they\u2019re made with everyone in mind. And, just as crucially, they\u2019re rapidly changing how the world works. While the blockchain \u2014 the technology underpinning all of what goes into Web3 \u2014 is indeed complex, the concepts it\u2019s built on are actually pretty easy to understand. So, let\u2019s dive in.<\/p>\n The blockchain is a distributed digital database that stores, moves, and tracks information globally without sacrificing transparency. This data is contained in \u201cblocks\u201d that link together to form a chain-like record of information flow. Think of the blockchain as a type of internet infrastructure. Just as the internet enables programs like Gmail, Spotify, or PayPal to exist, the blockchain allows apps and programs to run as well, albeit in a unique way.<\/p>\n Several blockchains<\/a> exist, forming their own ecosystems online. Ethereum, Solana<\/a>, Tezos<\/a>, Flow, and Polygon are all separate blockchains. Blockchains are often referred to as a public ledger because their data transactions are available for anyone to see; no single institution or organization acts as a gatekeeper to the information they contain.<\/p>\n This is one reason why blockchain tech is so appealing to so many. Its openness and transparency contrast starkly with Web2 databases and systems operated by Big Tech entities like Apple, Google, and Microsoft, who control access to and can even manipulate their users\u2019 data however they like behind closed doors. The decentralized nature of the blockchain produces an immutable and transparent record of data flow.<\/p>\n Blockchain systems are managed by a network of users. Rather than relying on a single centralized source, like Amazon\u2019s data centers, for example, Web3 is operated by a distributed network of devices (known as nodes) running a particular blockchain\u2019s software (like Ethereum) worldwide.<\/p>\n Data transaction records (like those of a cryptocurrency or NFT transaction) are stored in blocks that link together to form a chain of bookkeeping. Transaction requests are either validated or denied by majority consensus in the network. For a block and the transactions it contains to be officially and irrevocably added to the global ledger, the majority of computers (nodes) in the network have to agree on the transaction\u2019s validity. This aspect of the blockchain is what makes it so secure and decentralized \u2014 no single individual or group can alter or obscure the information on it.<\/p>\n The core principle is that users in the system \u2014 not third parties like banks or tech companies \u2014 validate proposed transactions in that system. If I want to send X amount of cryptocurrency to a friend on the blockchain, users in the system who operate a validating node pick up on my request, validate its authenticity, and the transaction gets approved by the network as a collective.<\/p>\n Even if hackers gain control of a node to attempt a forged transaction (and steal someone\u2019s valuable digital assets in the process), it won\u2019t be recognized by other nodes in the system. In Ethereum\u2019s case, hundreds of thousands of individuals and organizations running software around the globe act as that blockchain\u2019s validators. To forge a transaction on the blockchain, hackers would need to take control of over half of those nodes \u2014 a near impossibility. Because of this, the more users running nodes in a system, the safer the blockchain is from being hacked.<\/p>\n So, now we know that blocks of data link together to form a chain of transparent and distributed record-keeping in this system. The next thing to know is that those blocks contain a few things.<\/p>\n The first is what\u2019s called a cryptographic hash of the previous block. If that term freaks you out a little, you\u2019re not alone, but don\u2019t let it scare you. Cryptography is just the study of secure communication techniques that enable only a sender and receiver to understand its contents. And a hash is simply a way to compress data. A cryptographic hash, then, pairs the security functions of cryptography with the message-relaying abilities of a hash.<\/p>\n A block contains the cryptographic hash of the previous block to ensure that it hasn\u2019t been tampered with. And a block will also include a timestamp, dating the transactions contained within it and the data of those transactions.<\/p>\n A Web3 staple, smart contracts are programs on the blockchain that run when certain conditions are met. Generally, these are used to automate the execution of an agreement without the need for a third party, as they are coded with instructions that only trigger in the right circumstances.<\/p>\n One well-known smart contract is Ethereum\u2019s ERC-721, a data standard used for creating NFTs<\/a>.<\/p>\n While blockchain tech is primarily used to enable transactions related to cryptocurrencies and NFTs, it\u2019s only the underlying infrastructure for those functions. As such, that infrastructure can be applied in potentially limitless ways. The internet as we know it today enables applications and websites to function, but the internet itself is not limited to any one particular app or service. In the same way, organizations worldwide are exploring ways to utilize blockchain tech to improve and innovate in supply chain record keeping, data storage, payment processing, digital identification, carbon credit tracking, royalties distribution, healthcare, and plenty of other industries and applications.<\/p>\nWhat is blockchain?<\/h2>\n
Alright, but what makes the blockchain so democratic?\u00a0<\/h2>\n
But what if someone hacks those nodes?<\/h2>\n
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Ok, so how does blockchain tech work, exactly?\u00a0<\/strong><\/h2>\n
I\u2019ve heard about smart contracts \u2014 what are those?<\/h2>\n
That all sounds great, but why use blockchain at all?\u00a0<\/h2>\n
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