What is web3?
Web3 is a nickname for the next phase of the internet, which combines the decentralized, community-owned ethos of the early internet with the functionality of the modern internet built on centralized platforms.
Web3 is enabled by blockchains, a type of decentralized database of transactions that anyone can access but no one can modify. The first and most famous blockchain is Bitcoin, which was made for transacting the cryptocurrency of the same name.
Blockchains also enable DAOs - decentralized organizations. DAOs use tokens to make decisions in a permissionless and decentralized way. DAOs are often formed to build and maintain decentralized applications, but they are also popular for NFT collecting.
Use cases of blockchains
Many blockchains allow users to create decentralized applications. At the core of these applications are tokens, which can be almost anything.
Right now the most common uses for tokens and blockchains are:
- Financial applications
- Proof of ownership of digital collectibles and art (NFTs)
- Representing voting or ownership rights of a project