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What are Blockchain, Cryptocurrency and Web3?

It can be difficult to get your head around Web3, blockchain, and cryptocurrency due to their overlapping definitions. Each one of these terms comes with its very own distinct features which set it unique from the rest. In this article, we’ll explore what sets them apart so you have a better understanding of how they all work together. In order to see more, you need to check what bitcoin property you should purchase.

What is Blockchain?

Blockchains may seem complex, but you can think of them simply as chains of blocks. For example, in a typical blockchain that hosts a cryptocurrency such as Bitcoin or Ethereum, every block stores transactional data within it while also containing pertinent info about itself in its header section. Visualising this concept using images helps us understand how exactly these technologies work.

Public blockchains such as Bitcoin, Ethereum, Dogecoin, and Litecoin are renowned for their security. As it is nearly impossible to control more than 51% of the overall power in such a decentralized network of thousands (or hundreds) of active nodes, malicious actors cannot successfully hack into these blockchain networks. Furthermore, previous transactions are visible on public blockchains making them highly transparent and immutable ledgers. 

However, there is also an application for private blockchain which many industries use due to its secure data-sharing features between trusted parties only. Blockchains provide users with a greater sense of privacy than what is available through traditional financial services. Data such as wallet addresses, and sender and receiver details are visible on the blockchain, however personal information including Contact numbers or your identity will never be shared on it.

What is Cryptocurrency?

Cryptocurrencies are a form of virtual assets that utilize blockchains. Cryptography is an integral part of cryptocurrency, as it protects data from malicious attackers by encrypting plaintext and making the encoded information random and indecipherable. Additional security provided to investors through cryptography makes crypto highly attractive, allowing individuals enhanced privacy and heightened immunity against cyber threats.

Cryptocurrencies do not possess actual physical representation as they’re virtual. Cryptocurrencies are just code. You might have seen photos of golden Bitcoin coins, known as Casascius coins, that are utilized to keep virtual Bitcoins and do not have any intrinsic value on the market.  Many cryptos can be valued at hundreds of lots of money each, and they can and will have worth. The worth of crypto is practically always based on the interest in it. When the need for crypto decreases, the purchase price also will drop. Additionally, there is not much regulation related to cryptocurrency, which results in a lot of scams and fraud.

What is Web3?

Despite not being much different from the online experience that most of us have today (i.e., social media use, purchases, news updates), Web3 boasts some key distinctions compared to previous forms of internet usage — starting with decentralization. Web3 still allows users to do all types of activities they would on other iterations such as checking the news and using various forms of social media.

You might have read of decentralization before, particularly in the terminology of Web3 and cryptocurrency. This’s a design that networks, platforms, and programs can follow. In a decentralised system, power and information are dispersed over several nodes (referred to as nodes), so that no single person has total command over the information or power of the system. This not only stops graft but additionally prevents server failures which may lead to total shutdowns. If a single node breaks down, it will not have an impact on another node, and the system can continue to run while it usually does.

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