In our previous article we defined Web 3.0 and what it means. In that article we went through a number of different terms that we want to define for you so that you can use them moving forward. This article sets out the basic definition of each of these terms.
Decentralisation
This is a central part of web 3.0. Web 2.0 was largely based on websites using web addresses to find information. This information is stored in a specific location. Due to the nature of web 3.0 content, it may be stored at multiple locations simultaneously and is therefore decentralised.
Currently the big social media and social engine platforms hold a lot of data and in web 3.0 the data that is generated will be stored in different locations and not with the larger platforms. This will allow for less use of the data by the large platforms.
Blockchains
The easiest way to think of a blockchain is as a distributed database that has copies of the database stored in different locations. This means that when the database is updated in one location then it is updated in all of the other locations. As the blockchain is decentralised there is no one central database to rely on. You rely on the different databases stored in different locations to be the same to ensure that they are correct.
The blockchain data is then stored in blocks that are linkedin together via cryptography. When new data comes in fresh data is stored in a chronological order. Another key feature is that once data is entered into a blockchain it can’t be changed, the transactions are permanently recorded and viewable to anyone.
Metaverse
The metaverse is a concept of a virtual world that is persistent, online and 3D. It will allow users to work, meet, play games and socialise together in those 3d spaces. There is no one metaverse in existence at the moment. Several companies are looking to build their own metaverse to be the central hub for all businesses. Given the online environment of the metaverse it will link with blockchains, NFT’s and crypto assets.
Smart Contracts
These are simple programs stored on a blockchain that run when predetermined conditions are met. This means that no party to the contract has to do anything to complete the contract. For example you could have an insurance contract that pays out automatically when a certain weather event occurs in an area. They can also automate workflows triggering the next action when conditions are met.
DAO or Decentralised Autonomous Organisation
A DAO is an entity that is created without a central leadership. The DAO makes decisions based on the members together with a specific set of rules that are enforced on a blockchain. They are naturally based on the internet and decisions are taken by a vote determined by the rules of the organisation.
They are somewhat similar to companies but are not registered in the same way. However the rules of a DAO are much like a company’s constitution or rules governing a company.
NFT’s or Non-Fungible Tokens
An NFT is a unit of data stored on a blockchain that can not be interchanged. It can however by sold or traded where necessary. They general represent real-world objects like art, music and videos but can include so much more. The word non-fungible distinguishes it from fungible tokens which essentially means it can be easily replaced. Non-fungible tokens are therefore unique to the person that owns them. The unique feature is that ownership is set out in blockchain technology so that each one is owned individually.
Crypto Assets
This is a term that is used to describe cryptocurrencies, coins or tokens. These assets do not have a physical form and can’t be backed by physical assets. Crypto assets rely on blockchain technology to store the information.
