How Does Web3 Work? – Web3 Explained

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If you haven’t already, a term that you’ll come to familiarize yourself with within the near future is ”Web3”. Web3 marks a paradigm shift of the Internet, and it’s often referred to as the decentralized web. Web3 currently flourishes as new dApps (decentralized applications) are developed rapidly. However, what exactly does ”Web3” entail? How does Web3 work? And how are developers creating Web3 dApps? Well, these are three questions that we set out to answer in this article. So, if you want to learn more about the decentralized web, follow along as we explain the essential aspects of Web3. 

The Internet is in constant change and flux as technology advances. As the name suggests, Web3 is the third and latest major paradigm shift of the Internet, and it has two preceding ”phases” in the form of Web1 and Web2. There aren’t specific time stamps marking these shifts in the history of the Internet; however, they have unique defining characteristics. Web1 was static, Web2 dynamic, and Web3 is decentralized. 

You’re most likely more familiar with Web2 as this is the currently dominating phase of the Internet. However, Web3 is rapidly evolving, and it’s only a matter of time before decentralization takes over, and Web3 becomes the standard. 

Moreover, Web3 is gaining increased traction as it evolves and Web3 development becomes more accessible. A prominent example is Moralis, the best operating system for dApp development. Moralis provides a scalable backend infrastructure to users allowing them to minimize the development time for all blockchain projects. The operating system also provides an extensive set of development tools like the NFT API, Speedy Nodes, and Price API. Moreover, Moralis is the easiest way to build a great Web3 UI.

So, if you are looking to get into Web3, a great place to start is Moralis! But with no further ado, let’s try to answer the question “how does Web3 work?

What is Web1 and Web2? 

As was mentioned in the introduction, the Internet is constantly changing and has evolved from Web1 to Web2 and now rapidly transitions to Web3. So, to answer the question ”what is Web3?” we should start from the beginning and explain its predecessors.

Web1 was the first phase of the Internet, and the characterizing feature of this era was mainly to provide information. The web experience during this phase lacked interactive elements, and the Internet remained a source for mainly acquiring information. As such, the early days of the Internet were considered relatively static. 

With the rise of social media, the Internet moved away from the static nature of Web1 and transitioned to the second phase of the Internet — Web2. This period is characterized by interactivity which shifted the static nature towards a more dynamic web experience. As such, users now had the opportunity to interact and write their own content instead of only consuming information. 

Moreover, Web2 is still the predominant phase that most people are familiar with today. However, along with being dynamic, another prevailing characteristic of Web2 is centralization. Centralization can be great, but in this case, it seems like the drawbacks outweigh the benefits. Privacy, transparency, and single points of failure are issues that partly originate from the fact that large social media conglomerates accumulate vast amounts of personal information and data.

These issues that arise as a result of the centralized nature of Web2 are some of the main concerns currently driving the shift towards Web3, which instead focuses on decentralization. So, what exactly is Web3, and how does it work? 

What is and How Does Web3 Work? 

Centralization is the primary concern of the current state of the Internet, and the flaws that originate from this structure are what’s driving the shift towards Web3. As centralization is the origin of these issues, it is logical to assume that the solution is decentralization. As such, Web3 aims to create a decentralized web where data isn’t owned by centralized corporations or entities but instead shared among its users.

At the very core of Web3 is blockchain, the same technology that lays as a foundation for cryptocurrencies and NFTs (Non-Fungible Tokes). For this reason, it isn’t uncommon that people associate Web3 with crypto. Moreover, a blockchain is a distributed ledger or database that is shared amongst a network of nodes. The nodes keep the network secure by keeping an immutable record of all transactions and events of the chain. As such, blockchain technology enables the main idea of Web3, which is to keep data decentralized instead of centralized in large server farms, as is the general practice of Web2. 

Blockchain technology makes the flow of data extremely transparent as all information remains publicly available. The transparent nature also prevents misuse and limits the possibilities to, for example, commit fraud. 

Moreover, along with blockchain technology, two additional essential components of Web3 are dApps and smart contracts. dApps are essentially, as the name suggests, decentralized applications. However, to give you a better understanding of how Web3 works, we are in the following two sections going to break down these two additional components in further detail, starting with dApps.

How Does Web3 Work? — dApps

dApps or decentralized applications are like most applications; however, what differentiates them from traditional apps is that they come with Web3 and blockchain functionality. Moreover, instead of being based on a centralized system, they are rather distributed or spread across many different nodes in a more extensive blockchain-based P2P network. As such, the backend code for dApps exists on networks instead of centralized server farms. 

The decentralization of dApps across larger networks provides a multitude of benefits. Firstly, as the system distributes data and information across various nodes, there is no single point of failure. This makes it much harder to both hack an application but also to censor content. Secondly, as we keep all transactions on-chain, it makes these systems much more transparent, a factor that restricts fraudulent behavior. 

Moreover, an additional feature of dApps is their ability to have an internal token economy, something that can prove very useful. There are several reasons why dApps utilize internal tokens, and one example is as a governance mechanism. As such, it’s possible to distribute tokens for governing an app to users. This suggests that the actual users vote on proposals to change the dApp, making it a more democratic approach. 

If you are looking to develop dApps, the most prominent chain for dApp development is Ethereum. The network hosts a vast ecosystem of dApps where you’ll find innovative and unique ideas. One exciting area, in particular, is DeFi. The DeFi sector has grown tremendously over the past couple of years, laying the foundation for a completely decentralized financial industry.

Moreover, if you want to learn more about dApp development, check out the following guide on how to create Ethereum dApps. This article will provide you with a foundation to build your very own Ethereum-based application! 

How Does Web3 Work? — Smart Contacts

Along with dApps, an additional crucial part we need to explain to answer the question “how does Web3 work?” are smart contracts. As this is the case, we’ll take this section of the article to dive deeper into smart contracts and answer the question, ”what are smart contracts?”. 

Smart contracts are codified agreements between two parties. As such, the point of a smart contract remains the same as traditional contracts; however, the main difference is that code on a blockchain establishes the terms and conditions. Moreover, to make the explanation of smart contracts more comprehensible, we’re going to use Ethereum contracts as an example. 

All Ethereum smart contracts generally consist of two components; code and data. The code of the contract is an accumulation of functions, and the data is the state of the contract. All Ethereum smart contracts reside on a specific address, and they are a special type of account. This provides them with the functionality to hold funds and make transactions. However, the crucial difference between smart contracts and regular accounts is that the former is managed by code. 

A great analogy to clarify and describe smart contracts are vending machines as they work in a similar fashion. As such, we can acquire the desired output through a required input, similar to that of a traditional vending machine.

Moreover, developers generally write smart contracts in the Solidity programming language. Solidity is an object-oriented language that specifies in smart contract development, and it is also compatible with other EVM-based blockchains. However, there are exceptions and other languages such as Rust

If you have further interest in smart contracts and want to learn more, feel free to take a closer look at the following guide on how to create smart contracts

How to Become a Web3 Developer?

If you are looking to explore how web3 works, chances are that you are looking to become a blockchain developer. As such, we’ll take this chance to outline the most important aspects of Web3 development and the skills necessary. So, with no further ado, let’s discover what it takes to become a blockchain developer. 

When it comes to dApp development, it’s possible to divide the process into three main parts: frontend, backend, and smart contract development. So, we’re briefly going to cover these three areas, starting with the backend: 

  • Backend Development — Backend development has, at least from a traditional perspective, been the most taxing part of creating Web3 applications. However, this is no longer the case, as the Moralis platform does most of the heavy lifting for you. Moralis provides an infinitely scalable backend infrastructure and functionalities ready to use out of the box. As such, you don’t need to ”reinvent the wheel” as the platform provides a solid foundation. 
  • Frontend Development If you have prior programming experience, then you’ll grasp frontend blockchain development in no time! Frontend development doesn’t differ significantly between Web3 and Web2. As such, you can utilize languages that you might already be proficient in, such as JavaScript, HTML, and CSS. However, one distinction is that you need some knowledge of the Web3 library web3.js.
  • Smart Contract Development — Lastly, you’ll also need to be able to develop smart contracts. As such, it is highly beneficial to learn languages like Solidity. However, you can learn more about the best languages for blockchain development here at Moralis if you’d like. Moreover, additional development tools such as Truffle Suite, Ganache, Remix, and Drizzle can aid in the development of smart contracts. 

How Does Web3 Work? — Summary

The Internet is undergoing constant change, and it has seen several different ”phases”. The first stage of the Internet was Web1, a time where users mainly browsed the web for information. As technology progressed and social media was born, the Internet progressed from being relatively static to dynamic. As such, interactivity became a critical aspect of the web experience allowing people to write their own content instead of solely taking in information. This is the second phase or Web2, and this is where we currently are.

However, centralization is also a common theme in Web2, which causes issues with privacy, single points of failure, transparency, etc. As such, the Internet currently undergoes a paradigm shift towards the third phase — Web3. Web3 keeps the dynamic element of Web2 but instead focuses on decentralizing the web. This eliminates the concerns with centralization as we spread data across larger networks. 

Blockchain technology laid the foundation for decentralizing the web, and this sector currently flourishes. As such, it is only a matter of time before Web3 becomes the Internet standard. Moreover, two additional important aspects of Web3 are dApps and smart contracts. New dApps are continuously being developed, and Web3 development is one of the hottest sectors within the programming world. As such, there are endless opportunities for someone aiming to get into dApp development. 

If you are looking to become a blockchain developer, then the right place to start is Moralis. The platform makes blockchain development significantly more accessible and will allow you to cut development time for all your future projects. Moreover, at the Moralis blog, you’ll find all sorts of exciting guides on topics like Web3 authentication, ERC-20 tokens, smart contract indexing, and much more! 

So, if you haven’t already, sign up with Moralis and begin your Web3 development journey today!

January 23, 2022
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