Understanding Welti and Blockchain Technology.

• Position: SPECIAL SECTION: WEB3 AND BLOCKCHAIN

The term "Web3" lacks a precise definition. It is often used as an umbrella term for various blockchain-based technologies and activities. Most famously these include cryptocurrencies and non-fungible tokens [NFTs], but there are many others. A more detailed outline of these is given in section 2. Web3 also evokes a future version of the Internet based on these technologies. A good way to begin understanding Web3 is to compare it to its predecessors, Web2 and Webl.

Venture capitalist Marc Andreesen formulated a simple typology:

* Web1 = read. The earliest Internet applications published information online in formats like blogs for people to read.

* Web2 = read and write. The next iteration of the Internet allowed users to publish their content much more easily, with social media being a prime example.

* Web3 = read, write, and own. Web3 allows users to exercise ownership rights over Internet content, using technology native to the Internet rather than relying on external forces to enforce ownership rights [such as copyright laws]. One of the implications is that scarcity can be introduced to the Internet. A finite supply [of a certain cryptocurrency, for example] introduces a pricing dynamic that has not existed before on the Internet.

Introducing ownership rights as native to the Internet isn't the only exciting aspect of Web3. Proponents also cite decentralization and alternative economic models, with cryptocurrencies being the most famous but far from only example.

This isn't just a result of technological innovation--social narratives fuel excitement around Web3. For example, trust in institutions has been decreasing dramatically for years. By supporting decentralization, Web3 promises to reduce reliance on institutions.

The creation of Bitcoin was partially inspired by distrust in established banking institutions, as the first Bitcoin references the 2008 financial crisis in its code. (1) Another obvious social narrative is that Web3 is a bold new frontier, capable of generating fantastic wealth.

Because "blockchain" technologies are the basis for Web3 technologies [and the associated social narratives] let's see what this technology is, and how it works.

What is blockchain technology?

Blockchain technology is an example of an "append-only distributed ledger." The "append-only" ledger means that data can only be added to it, but not edited or removed. "Distributed" ledgers are databases where data is stored across many different actors...