Blockchain 101: Introduction to Web 3.0 and blockchain

Web 3.0 🕸️

Web 3.0 is the upcoming third generation of the internet where websites and apps will be able to process information in a smart human-like way through technologies like machine learning (ML), Big Data, decentralized ledger technology (DLT), etc. Web 3.0 was originally called the Semantic Web by World Wide Web inventor Tim Berners-Lee, and was aimed at being a more autonomous, intelligent, and open internet.

The Web 3.0 definition can be expanded as follows: data will be interconnected in a decentralized way, which would be a huge leap forward to our current generation of the internet (Web 2.0), where data is mostly stored in centralized repositories. Furthermore, users and machines will be able to interact with data. But for this to happen, programs need to understand information both conceptually and contextually. With this in mind, the two cornerstones of Web 3.0 are semantic web and artificial intelligence (AI).

Evolution of the Web:

Web 1.0 (1989-2005)

Web 1.0, also called the Static Web, was the first and most reliable internet in the 1990s despite only offering access to limited information with little to no user interaction. Back in the day, creating user pages or even commenting on articles wasn’t a thing.

Web 1.0 didn't have algorithms to sift internet pages, which made it extremely hard for users to find relevant information. Simply put, it was like a one-way highway with a narrow footpath where content creation was done by a select few and information came mostly from directories.

Web 2.0 (2005-present)

The Social Web, or Web 2.0, made the internet a lot more interactive thanks to advancements in web technologies like Javascript, HTML5, CSS3, etc., which enabled startups to build interactive web platforms such as YouTube, Facebook, Wikipedia, and many more.

This paved the way for both social networks and user-generated content production to flourish since data can now be distributed and shared between various platforms and applications.

The set of tools in this internet era was pioneered by a number of web innovators like the aforementioned Jeffrey Zeldman.

Web 3.0 (yet to come)

Web 3.0 is the next stage of the web evolution that would make the internet more intelligent or process information with near-human-like intelligence through the power of AI systems that could run smart programs to assist users.

Tim Berners-Lee had said that the Semantic Web is meant to "automatically" interface with systems, people, and home devices. As such, content creation and decision-making processes will involve both humans and machines. This would enable the intelligent creation and distribution of highly-tailored content straight to every internet consumer.

What is a Blockchain? 🔗

A blockchain is a distributed software network that functions both as a digital ledger and a mechanism enabling the secure transfer of assets without an intermediary. Just as the internet is a technology that facilitates the digital flow of information, blockchain is a technology that facilitates the digital exchange of units of value. Anything from currencies to land titles to votes can be tokenized, stored, and exchanged on a blockchain network.

The first manifestation of blockchain technology emerged in 2009 with the Bitcoin blockchain, a secure, censorship-resistant, peer-to-peer electronic cash system. Because Bitcoin is accessible to anyone, it is an example of an open or permissionless blockchain.

Today, there are many forms of blockchain technology. Some blockchains have been designed to meet the needs of a finite group of participants, where access to the network is restricted. These are examples of private, or permissioned blockchains.

In addition to the secure transfer of value, blockchain technology provides a permanent forensic record of transactions and a single version of the truth – a network state that is fully transparent and displayed in real-time for the benefit of all participants.

How Does Blockchain Work? ⚙️

Blockchain consists of three important concepts: blocks, nodes, and miners.

Blocks

Every chain consists of multiple blocks and each block has three basic elements:

• The data in the block.
• A 32-bit whole number is called a nonce. The nonce is randomly generated when a block is created, which then generates a block header hash.
• The hash is a 256-bit number wedded to the nonce. It must start with a huge number of zeroes (i.e., be extremely small). When the first block of a chain is created, a nonce generates the cryptographic hash. The data in the block is considered signed and forever tied to the nonce and hash unless it is mined.

Miners

Miners create new blocks on the chain through a process called mining.

In a blockchain every block has its own unique nonce and hash, but also references the hash of the previous block in the chain, so mining a block isn't easy, especially on large chains.

Miners use special software to solve the incredibly complex math problem of finding a nonce that generates an accepted hash. Because the nonce is only 32 bits and the hash is 256, there are roughly four billion possible nonce-hash combinations that must be mined before the right one is found. When that happens miners are said to have found the "golden nonce" and their block is added to the chain.

Nodes

One of the most important concepts in blockchain technology is decentralization. No one computer or organization can own the chain. Instead, it is a distributed ledger via the nodes connected to the chain. Nodes can be any kind of electronic device that maintains copies of the blockchain and keeps the network functioning.

Every node has its own copy of the blockchain and the network must algorithmically approve any newly mined block for the chain to be updated, trusted, and verified. Since blockchains are transparent, every action in the ledger can be easily checked and viewed. Each participant is given a unique alphanumeric identification number that shows their transactions.

History of Blockchain 🪙

Although blockchain is a new technology, it already boasts a rich and interesting history. The following is a brief timeline of some of the most important and notable events in the development of blockchain.

2008

• Satoshi Nakamoto, a pseudonym for a person or group, publishes “Bitcoin: A Peer to Peer Electronic Cash System."

  2009

• The first successful Bitcoin (BTC) transaction occurs between computer scientist Hal Finney and the mysterious Satoshi Nakamoto.

  2010

• Florida-based programmer Laszlo Hanycez completes the first ever purchase using Bitcoin — two Papa John’s pizzas.
• Hanycez transferred 10,000 BTCs, worth about $60 at the time. Today it's worth $80 million.
• The market cap of Bitcoin officially exceeds $1 million.

  2011

• 1 BTC = $ 1 USD, giving the cryptocurrency parity with the US dollar.
• Electronic Frontier Foundation, Wikileaks, and other organizations start accepting Bitcoin as donations.

  2012

• Blockchain and cryptocurrency are mentioned in popular television shows like The Good Wife, injecting blockchain into pop culture.
• Bitcoin Magazine was launched by early Bitcoin developer Vitalik Buterin.

  2013

• BTC market cap surpassed $1 billion.
• Bitcoin reached $100/BTC for the first time.
• Buterin publishes an “Ethereum Project" paper suggesting that blockchain has other possibilities besides -Bitcoin (e.g., smart contracts).

  2014

• Gaming company Zynga, The D Las Vegas Hotel, and Overstock.com all start accepting Bitcoin as payment.
• Buterin’s Ethereum Project is crowdfunded via an Initial Coin Offering (ICO) raising over $18 million in BTC and opening up new avenues for blockchain.
• R3, a group of over 200 blockchain firms, is formed to discover new ways blockchain can be implemented in technology.
• PayPal announces Bitcoin integration.

  2015

• Number of merchants accepting BTC exceeds 100,000.
• NASDAQ and San-Francisco blockchain company Chain team up to test the technology for trading shares in private companies.

  2016

• Tech giant IBM announces a blockchain strategy for cloud-based business solutions.
• The government of Japan recognizes the legitimacy of blockchain and cryptocurrencies.

  2017

• Bitcoin reaches $1,000/BTC for the first time.
• Cryptocurrency market cap reaches $150 billion.
• JP Morgan CEO Jamie Dimon says he believes in blockchain as a future technology, giving the ledger system a vote of confidence from Wall Street.
• Bitcoin reaches its all-time high at $19,783.21/BTC.
• Dubai announces its government will be blockchain-powered by 2020.

  2018

• Facebook commits to starting a blockchain group and also hints at the possibility of creating its own cryptocurrency.
• IBM develops a blockchain-based banking platform with large banks like Citi and Barclays signing on.

  2019

• China’s President Ji Xinping publicly embraces blockchain as China’s central bank announces it is working on its own cryptocurrency.
• Twitter & Square CEO Jack Dorsey announces that Square will be hiring blockchain engineers to work on the company’s future crypto plans.
• The New York Stock Exchange (NYSE) announces the creation of Bakkt - a digital wallet company that includes crypto trading.

  2020

• Bitcoin almost reaches $30,000 by the end of 2020.
• PayPal announces it will allow users to buy, sell and hold cryptocurrencies.
• The Bahamas becomes the world’s first country to launch its central bank digital currency, fittingly known as the “Sand Dollar”.
• Blockchain becomes a key player in the fight against COVID-19, mainly for securely storing medical research data and patient information.

The Future of Blockchain Technology: 🚀

Blockchain is an emerging technology, so predictions are still mixed about its potential.

In a TechRepublic Research study, 70% of professionals who responded said they hadn’t used blockchain. But 64% said that they expect blockchain to affect their industry in some way, and most predict a positive result.

“We believe that blockchain technology will be transformative in the tech and IT sector in the coming years, similar to what the internet did for the world back in the 90s and early 2000s,” said John Zanni, President of the Acronis Foundation, in Forbes. “Today, part of our storage and backup software lets users notarize any digital data and put that fingerprint on the blockchain to ensure it can’t be tampered with.”

A recent Trend Insight Report from analyst firm Gartner made the following forecast:

• Through 2022, only 10% of enterprises will achieve any radical transformation by using blockchain.
• By 2022, at least one innovative business built on blockchain technology will be worth $10 billion.
• By 2026, the business value added by blockchain will grow to just over $360 billion, then by 2030 grow to more than $3.1 trillion.

Cybersecurity is one of the most promising areas of projected growth for blockchain technology. An ongoing challenge for businesses of all sizes is data tampering. Blockchain technology can be used to prevent tampering, keeping data secure, and allowing participants to verify a file’s authenticity.