We get it. The lingo in web3 can sound like a foreign language. The feedback we often get when we talk about web3 is that there are so many terms and acronyms, it is incredibly hard to learn. Here we have some top level definitions of a few key web3 terms in more accessible language. Please reach out if you have any questions, or want to learn more about the wild world of web3.
Blockchain: Blockchain technology is what underpins everything within this industry. There is a short definition below, but for non-tech people, it is a bit like understanding that MacOS is what iphones and their applications run on. We don’t need to actually understand how MacOS works to use, sell, or buy the apps.
But for those who want it: Blockchain technology is an advanced database mechanism that allows transparent information sharing within a business network. A blockchain database stores data in blocks that are linked together in a chain.
Crypto: Cryptocurrency is digital money that's secured by cryptography, making it difficult to counterfeit or double-spend. Just like you can hold and trade physical money, you can do the same with cryptocurrencies. The term ‘crypto’ is often also applied to the whole sector (the crypto industry).
Web3: Web3 is the next generation of the internet, where websites and applications are powered by blockchain technology. Instead of relying on centralized servers and databases, web3 applications use a network of decentralized computers to store and process data. The evolution is often cited as:
Web1 - You can read.
Web2 - You can read and write.
Web3 - You can own what you read and write.
Unlike web2 where centralized platforms own our data and identity when we use them, Web3 platforms do not.
BTC: Bitcoin is the original cryptocurrency, created in 2008 by an unknown person or group of people under the pseudonym "Satoshi Nakamoto". Before Bitcoin, sending money over the internet was often slow, expensive, and relied on a central authority like a bank or payment processor to facilitate transactions. This meant that users had to pay high fees, wait for several days for transactions to clear, and were subject to restrictions and regulations.
Bitcoin aimed to solve these problems by creating a decentralized digital currency that operates without intermediaries, making it faster, cheaper, and more accessible for users to send and receive money online. The first Bitcoin transaction took place in 2009, and since then it has grown into a popular and valuable cryptocurrency with a market cap in the trillions of dollars.
ETH: Ethereum was created by Vitalik Buterin in 2014. It is like a giant computer that runs on the internet, allowing developers to create and execute code without a central authority. Ethereum's cryptocurrency is Ether (ETH), which is used to pay for transactions that occur on its blockchain (see Blockchain descriptor at the end).
The creation of Ethereum was the genesis of the growth of Web3 as new applications, DAOs and other uses could be created using it.
DAOs: Decentralized Autonomous Organizations (DAOs) are digital communities that exist on the internet. The current use of DAOs is to enable people to align their effort and money using blockchain based tools for things such as Treasury management and voting. This is enabled by cryptocurrency as DAO members can easily contribute finances to a project from anywhere in the world.
In this new model of human coordination, the current focus is decentralised working, where people have ownership over their community and anyone can propose ideas to further the DAOs mission. This is in contrast to having centralized leadership like a board or executive team for decision making and power over finances. The ‘autonomous’ part of the DAO acronym is still a work in progress for most DAOs so we’ll put a pin in that until we have good examples to share.
DEFI: Decentralized Finance (DeFi) provides a peer-to-peer method for lending, borrowing, fundraising and trading digital assets on the internet, without intermediaries such as traditional banks or financial institutions. It is important to note that crypto exchanges such as ‘they who shall not be named’ (FTX) are NOT DEFI, but are centralized platforms which happen to trade in crypto.
Dapps: Decentralized Applications (Dapps) are software programs that run on the blockchain. These applications are open-source, meaning anyone can access and contribute to their development. They're often designed to operate without a central authority or middleman, making them more transparent and secure.
NFTs: This is the one many have heard about and likely made them think web3 and crypto is a lot of nonsense. NFT stands for the very catchy, ‘Non Fungible Token’ which means it is a unique, non-replicable digital asset. (Cryptocurrency such as Bitcoin are Fungible Tokens, because they are non-unique digital assets - each one is the same as each other one).
The use cases of NFTs have primarily revolved around digital art and NFT communities where owning an NFT is like a membership to a club.
To really blow your mind, check out the top 10 selling NFTs to date: (Cryptopunks are as per the aforementioned club membership, but each one has different features, some more rare than others). We know, we know, it’s not our thing either, but it’s a huge market and opportunity for artists, especially.
We hope this helps (let us know in the poll below), and maybe even piques your curiosity. If you’re interested in learning more, check out GenX Crypto Women. Come along with us on the wild ride.
Super helpful article