Introduction to web 3.0
Community is how networks scale and is considered as a core of all things Web3. Well, let’s see where we come from with web2. Social networks and other Digital platforms are highly incentivized in web2 to collect as much information as possible to target better ads for what they think we want and made the information more polarized.
The difference between Web2 and Web3 is that in Web3, the incentives have absolutely nothing to do with collecting our data for ad targeting. Web3 also optimizes transparency and decentralization of decisions are the sum of the underlying principles and mechanics o Web3.
It is safe to say that all the entirety of Web3 is built on the “Blockchain” technology. Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved.
Importance of Blockchain:
Business runs on information. The faster it’s received and the more accurate it is, the better. Blockchain is ideal for delivering that information because it provides immediate, shared and completely transparent information stored on an immutable ledger that can be accessed only by permissioned network members. A blockchain network can track orders, payments, accounts, production and much more. And because members share a single view of the truth, you can see all details of a transaction end to end, giving you greater confidence, as well as new efficiencies and opportunities.
Key Elements of Blockchain:
Distributed Ledger Technology:
All network participants have access to the distributed ledger and its immutable record of transactions. With this shared ledger, transactions are recorded only once, eliminating the duplication of effort that’s typical of traditional business networks.
No participant can change or tamper with a transaction after it’s been recorded to the shared ledger. If a transaction record includes an error, a new transaction must be added to reverse the error, and both transactions are then visible.
To speed transactions, a set of rules called a smart contract is stored on the blockchain and executed automatically. A smart contract can define conditions for corporate bond transfers, include terms for travel insurance to be paid and much more.
What is Use case of Web 3.0?
The use case of Web3 in finance can be defined as Decentralised finance, It is the massive reduction in fees, time and cutting out of intermediaries that allows anyone to engage in the transactions
Non-fungible tokens or NFTs basically means that it’s unique and can’t be replaced with something else. These are unique cryptographic tokens on blockchain. Unlike physical money and cryptocurrencies, which are fungible, they cannot be traded or exchanged one for another.Nfts are considered to be new decentralised virtual assets which are irreplaceable. Nfts cut out the need to rely on content streaming and copyright cartels such as big production companies and gives the creators and contributors the ability to create value and ownership for their work
Decentralised Autonomous Organizations(DAOs):
A DAO, or “Decentralised Autonomous Organization,” is a community-led entity with no central authority. It is fully autonomous and transparent.Smart contracts lays the foundation rules, execute the agreed upon decisions. DAO is governed by entirely by its individual members, who collectively make critical decisions about the future of project, such as technical upgrades and treasury allocations.
Working of DAOs:
The rules of the DAO are established by a core team of community members through the use of smart contracts. These smart contracts lay out the foundational framework by which the DAO is to operate. They are highly visible, verifiable, and publicly auditable so any potential member can fully understand how the protocol is to function at every step. Once these rules are formally written onto the blockchain, the next step is around funding: the DAO needs to figure out how to receive funding and how to bestow governance. This is typically achieved through token issuance, by which the protocol sells tokens to raise funds and fill the DAO treasury. Token holders are given certain voting rights, usually proportional to their holdings. Once funding is completed, the DAO is ready for deployment. At this point, once the code is pushed into production, it can no longer be changed by any other means other than a consensus reached through member voting. That is, no special authority can modify the rules of the DAO; it is entirely up to the community of token holders to decide.
Once you’ve found a project of interest, there are a few different ways to get directly involved. I feel it is important to note that not all DAOs operate with the same purpose, so the first step is figuring out the core function of each DAO. For DAOs focused on technical governance, it’s influential to understand what sort of voting rights are granted to token holders and what kind of proposals are at stake. In some instances, such as Uniswap, token holders can vote on distributing a portion of the fees that the protocol collects amongst themselves. In other protocols such as compound, token holders can vote on distributing these protocol fees towards bug fixes and system upgrades. This approach also allows freelancers and those generally interested in the project to be able to join ad hoc and receive compensation for their work by way of DAO grant-funded projects (DAOs regularly post these sorts of ad hoc projects on their Discord server).
You were introduced to several concepts of Blockchain by taking Bitcoin as a case study. The Bitcoin is the first successful implementation of blockchain. Today, the world has found applications of blockchain technology in numerous industries, where the trust without the involvement of a centralized authority is desired. So welcome to the world of Blockchain.
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