Blockchain technology is one of the most promising trends regarding digital innovation, as it brings massive improvements to our modern systems.
Blockchain is decentralized, immutable, and transparent, which is currently lacking in regular organizations and the online ecosystem.
Complexity, few investments, and unnecessary procedures create inefficient systems and programs, contributing to an entire supply chain of wastefulness.
Technology has so much potential for improving the world, from promoting global payments according to the Bitcoin price USD to leveraging modern gadgets in healthcare.
Luckily, we have the chance to make the big leap towards progress with blockchain, a distributed database founded to support cryptocurrency transactions.
However, its features expand significantly, making it an amazing tool for improving financial services, voting, and cybersecurity.
With so many use cases and chances of improvement, we view it as an important contributor to the establishment of Web3, the next generation of the Internet. Here’s how.
Blockchain Can Be The Foundation Of Web3 Infrastructure
Web3 infrastructure takes everything we know about the internet concept to the next level, where security is a priority and dependence on centralized brands is limited. Some of the critical features of a Web3 system include the following:
- Decentralized storage where data is distributed across various nodes;
- Computations performed by collective nodes;
- Data and message routing to ensure security and reliability;
- Wireless communication protocols;
- Decentralized access control management;
Using blockchain technology could speed up the process of accommodating Web3 by allowing companies to merge it with AI, ML, or IoT and decentralize any service without the involvement of third parties. But that’s not everything blockchain does.
Blockchain And Some Of Its Use Cases On The Web3
Blockchain is already approachable by developers, so we’re sure it can be used across various sectors of the Web3 world.
Due to the involvement of cryptocurrencies in transactions, they could be the basis of digital payment infrastructures.
Considering they’re borderless, there would be no need for Web2’s slow and costly infrastructure.
Moreover, blockchain ensures ownership and transparency by offering more asset control to the customer.
Users can leverage self-custody wallets to manage their holdings better, and since all transactions are recorded on the ledger, funding is transparent.
But there’s more:
- Blockchain can help construct the concept of decentralized identity that could eliminate identity theft and privacy concerns;
- Blockchain can help creators monetize their content without the involvement of intermediaries;
- Blockchain can provide tokens and NFTs through which players can trade virtual assets;
- Blockchain can ensure verifiable credentials and store academic certificates on the decentralized ledger;
Blockchain Benefits The Web3 Ecosystem
Based on its encryption technology, blockchain is highly secure, which would help the Web3 infrastructure withstand attacks and protect customers. Implementing blockchain technology would ensure the following:
- Enhanced security through the distributed ledger system;
- Fast transactions compared to traditional payment processing;
- Fewer expenses on maintenance;
- Superior efficiency on operational costs and workflow;
Although, for now, the lack of talented developers hinders blockchain adoption, we should expect the future to grow the labor market when blockchain becomes more approachable as the technology evolves into the mainstream.
Systems will also have to be changed and maintained so they can support blockchain. Becoming a blockchain node requires familiarizing oneself with concepts like a virtual machine (VM), pre-configuring nodes on the computer, or joining decentralized networks.
dApps And Defi As The Leading Web3 Sectors
Since Web3 is all about decentralization, there’s no wonder that blockchain applications like decentralized apps and finance will be at the system’s core.
These technologies are already the result of blockchain development since dApps are built on it.
One popular example is Ethereum, a high-tech blockchain that supports numerous innovations through smart contract functions.
On the other hand, decentralized finance (DeFi) would be the main way transactions are made. DeFi was solely developed to ensure accessibility, low fees, and transparency to users.
Its use cases include sectors like exchanges, yield farming, and prediction markets, so it would cover important financial industry fields.
However, there are several problems with dApps and Defi regarding enforcing regulations and those responsible for protecting customers.
Since there’s no central authority to control them, dApps and DeFi can be taken advantage of by illicit actors if users are not carefully protecting their assets and portfolios.
Web3 Adoption Isn’t That Simple
While it may seem like we have the technology to pursue Web3 sooner, we only lack preparation and talent, and the implications of switching from Web2 to Web3 are much more complicated.
For example, developers must consider how the user experience would change because current systems and software make it simple for customers to engage with businesses and transact on the Internet.
On the other hand, blockchain and decentralized systems aren’t that inviting, and they must be shaped in such a way that people can easily interact with them.
Moreover, scaling blockchains and networks is quite difficult, considering that Ethereum, one of the most innovative blockchains, is having trouble with gas fees and congestion due to scalability issues.
As these platforms expand, they need to be adjusted to the number of transactions and users, which requires more work and nodes worldwide to contribute. Scalability is essential to making Web3 accessible and easy to use.
Finally, another potential disruption of the Web3 world is the lack of digital literacy of people.
In order for it to be sustained by daily users, Web3 should be understood by individuals, but since the rate of digital literacy isn’t necessarily high around the world, it might be difficult for people to get used to the new era of the Internet.
Do You Think Blockchain Will Play A Vital Role In The Web3 Establishment?
Web3 is known as the future of the Internet, bringing ease, decentralization, and transparency into a world where bureaucracy and inefficiency rule over.
Technologies like machine learning and artificial intelligence will power Web3. Still, a special component of it will probably be blockchain, a shared ledger through which transactions are public, fast, and cheap.
Through blockchain, Web3 will be able to provide decentralized apps and finance to future users and investors.
