Web3 in plain english.

It’s critical that you know some of the basic terms in the Web3 taxonomy, to understand how these new technologies can be used to transform and modernise traditional business.

This article is a simple, plain english description of some of the primary concepts of Web3.?

1.????Web3

Web3 refers to the next version of the Internet that promotes decentralized, open protocols to bring more transparency and democratization to the digital world. In this decentralized digital ecosystem users can potentially own and control every aspect of their digital presence.

2.????The Distributed Ledger:

Distributed ledger technology (DLT) is a digital system for recording the transaction of assets in which the transactions and their details are recorded in multiple places at the same time.

3.???The Blockchain:

Blockchain is one type of distributed ledger technology that uses a sequence of blocks, creating a permanent information chain to record a transaction.

4.????Crypto Tokens:

Tokens can be used for investment purposes, to store value, or to make purchases.

Crypto tokens are a type of cryptocurrency that represents an asset or specific use and reside on their own blockchain.

5.????Crypto Assets:

Crypto assets are defined as a cryptographically secured digital representation of value or contractual rights (a basket of different asset classes) powered by forms of distributed ledger technology, which can be stored, transferred or traded electronically.

6.????Cryptocurrency:

Cryptocurrencies are virtual digital tokens, created by private companies or communities, and passed on as assets, traded on exchanges or peer-to-peer with their values solely dependent on demand and supply.

7.????Cryptocurrency Wallet:

A digital wallet is used to facilitate the storage and transfer of cryptocurrencies. All digital wallets have their own private and public keys.

8.????Non-Fungible Token (NFT):

A non-fungible token (NFT) is a unique cryptographic token which is not interchangeable with any related asset and cannot be divided or altered.

9.????Stable coins:

Stablecoins are crypto assets that aim to have similar volatility to widely used fiat currencies like the US (United States) dollar. There are four types of stable coins: fiat, commodity, crypto, and non-collateralised. The most common is fiat-collateralised.

10.?Decentralised Finance (DeFi):

Decentralised finance (DeFi) is an umbrella term for peer-to-peer financial services on public blockchains.

11.?DAO:

A Decentralised Autonomous Organisation (DAO) is an organisation managed by members who often use open-source code and smart contracts, decisions are often voted upon by members and utilise a native token for participation and doesn’t require a trusted third party to ensure agreements are carried out.

12.?CBDC:

Central Bank Digital Currency (CBDC) is a form of digital money issued and regulated by a sovereign monetary authority or central bank. This digital form of currency has legal tender status. It is not a cryptocurrency and need not use a blockchain or DLT.

13. Settlement Coin:

A settlement coin represents a specific currency payment that mints, transfers, then burns. It relies on existing monetary concepts, simply payment tokenisation. Most likely issued by a Bank for settling outstanding payments.

14.?The Metaverse:

The Metaverse refers to a collection of virtual world that are “always on” and exists in real time. Though it may span virtual and physical worlds, as well as multiple platforms. It is typically powered by a fully functioning virtual economy, often (but not always) built on cryptocurrency and digital goods and assets, including nonfungible tokens (NFTs) and enables people to have virtual identities, presence, and “agency,” including peer-to-peer interactions, transactions, user-generated content, and “world-building”.

15. aApps:

Decentralized applications?(dApps) are digital applications or programs that exist and run on a blockchain or peer-to-peer (P2P) network of computers instead of a single computer. DApps (also called "dapps") are outside the purview and control of a single authority.