If you’ve heard of “crypto,” then you’re probably also familiar with jargon like “Blockchain,” “NFTs,” and “Web3”, as well as terms such as “decentralization” and “decentralized finance” too. Such terms can often be confusing, though; you may even think they are all fairly interchangeable, meaning much the same thing. That’s because they’re often mentioned in context with whatever up-and-coming new cryptocurrency happens to be hitting the headlines at any given time.
But that really isn’t the case. Crypto, blockchain, and Web3 are actually three very different and distinct things, and to understand exactly what they are, we must first start by defining what Web3 really is.
The very name “Web3” suggests that there was a Web1 and a Web2 that preceded it, and you wouldn’t be wrong in that assumption. Web1 can be considered the original Internet that first emerged in the 1990s, a time when people had to run their own servers to create what were read-only websites. It eventually gave way to what has become known as Web2, which is the era of more dynamic websites such as Facebook, Twitter, and YouTube, which host user-generated content on centralized servers.
Web3 is, therefore, a vision of a next-generation Internet that will be decentralized and distributed using blockchain and other technologies. The name was first coined by Ethereum co-founder and Polkadot developer Dr. Gavin Wood in 2014, who described an internet where users’ data is not stored on centralized servers but rather on decentralized blockchains hosted on nodes scattered across the globe. No single server, or person, or entity, controls these blockchains. Wood also spoke about the benefits of Web3, which entail increased security, secure identities, and users’ control of their data.
Blockchain, then, is the most important enabling technology of Web3. It is a decentralized ledger that enables users to store and share data and digital assets. Because it’s distributed, blockchain allows multiple parties to reach a consensus on the state of those shared records, eliminating the need for a centralized authority to do so. Thus, blockchains can host decentralized applications or dApps that enable people to interact directly, using smart contracts – or code that is programmed to run automatically when specified conditions are met.
Blockchain has proven to be highly secure and fully transparent, helping to increase accountability and trust.
As for crypto, this is the easiest to define. Crypto is short for cryptocurrency and is basically just a digital currency that can be spent on a blockchain platform. The original crypto was Bitcoin, though there are hundreds of different tokens nowadays. Because crypto is tied to the blockchain that supports it, it can be used to interact with dApps hosted on the same blockchain.
Finally, we have NFTs, which are actually quite similar to crypto, but with a major difference. NFTs stand for “non-fungible token,” which means they are not divisible in the same way that crypto is. You can only ever have 1 NFT, whereas Bitcoin, for example, can be broken down into numerous satoshis, i.e., 0.0000003 BTC. NFTs can be used to represent almost any kind of asset, from digital art to video game accessories, metaverse land, tickets to physical events, and more besides.
To illustrate the differences, it’s worth looking at a few different Web3 projects. Maincard is a play-and-earn betting platform that’s aiming to reinvent the online gambling industry. The game is based on its unique “Maincard NFTs”, which enable players to guess the outcomes of sporting fixtures and events and earn rewards when they make correct predictions. The more correct guesses a player makes, the more valuable their Maincard NFT becomes, and the greater the rewards could be.
Maincard is built on the Polygon network, which is not actually a blockchain but a scaling solution for the Ethereum blockchain. However, Polygon still has its own cryptocurrency, known as MATIC, which is used to purchase Maincard NFTs and reward players for correctly guessing the outcomes of games. Maincard, which is currently offering new users $100 worth of NFTs as a signup bonus, will launch later this year. It qualifies as a Web3 project because it’s decentralized, and users own the actual assets – the NFTs – and are free to sell them on to the highest bidder if they choose.
Looking Glass Labs, meanwhile, is a Web3 firm that specializes in building NFT architecture, immersive metaverse environments, play-to-earn tokens, and virtual asset royalty streams. Its chief brand is the Web3 design studio House of Kibaa, which has designed some of the most novel NFT use cases envisioned so far. The most famous of its NFTs are the GenZeroes collection. GenZeroes is a live-action NFT-integrated digital series with multiple episodes hosted in the metaverse in both video and comic book format. It has enjoyed a cult following since its launch in early 2022. By holding GenZeroes NFTs, fans of the series get to participate in creating the storyline for future episodes, as well as early access to all new episodes.
A somewhat similar Web3 project is UNOPND, which is an incubator of blockchain-based NFT gaming and metaverse projects that’s looking to support innovative new use cases. UNOPND currently backs a number of NFT-focused projects, including the decentralized K-Pop startup Modhaus, whose fans choose which group members are involved in its newest songs, and Derby Stars, a horse racing metaverse game where players can race, breed, grow and train their own NFT horses
UNOPND’s name refers to its goal of unlocking the “unopened” value of Web3, wherein the “open” world will enable limitless imagination and freedom through the power of blockchain, NFTs, and crypto, its great enabling technologies.