Blockchain is Ok, Crypto is Not: Why is the Govt Dilly-dallying on Web3? (2024)

FAQs

What is the difference between Web3 and blockchain? ›

Blockchain is a system that allows for storing and transferring data in a decentralized way, without relying on intermediaries or central authorities. Web3 offers a new paradigm for the web, in which users have more control and ownership over their data, identity, and online communities.

Blockchain technology's most valuable application is not through a token or coin but hinges on two distinct concepts: The blockchain itself — that, is the ledger responsible for providing the single source of truth — and the so-called consensus protocol, or how that truth is agreed to.

The business issues mainly relate to customer education and hesitation. Blockchain vendors face their own issues, including partner hesitation, lack of network effect, limited skills and financial issues. Among the technical challenges are performance and limited interoperability with the necessary systems.

Critics have expressed concerns over the centralization of wealth to a small group of investors and individuals, or a loss of privacy due to more expansive data collection. Billionaires like Elon Musk and Jack Dorsey have argued that Web3 only serves as a buzzword or marketing term.

Web3 can exist without blockchain technology, but it would be a very different web. Blockchain is one of the key technologies that enable Web3, but it is not the only one.

However, it's important to recognize that the Web3 vision is not limited to any single blockchain or technology. Web3 is designed to be blockchain-agnostic, meaning it can leverage various blockchain platforms or other technologies to achieve its goals.

Given the complexity of the technology, its development is inherently expensive, thereby posing a considerable financial challenge to small businesses and startups. Furthermore, the lack of interoperability between different blockchain platforms compounds the issue.

Scalability Issues

One of the key technological challenges of blockchain is the network's technical scalability, which might lack of interest adoption, especially for public blockchains. The ability to process thousands of transactions per second is a hallmark of legacy transaction networks.

Are all crypto assets built on blockchain? No, not all crypto assets are built on blockchain technology. Some crypto assets, known as tokenized assets, are built on other types of distributed ledger technologies or platforms.

Scalability. Blockchain networks can be slow and inefficient due to the high computational requirements needed to validate transactions. As the number of users, transactions, and applications increases, the ability of blockchain networks to process and validate them in a timely way becomes strained.

Can blockchain shut down? ›

This is the core value of blockchain tech—it's immutable, open, can't be shut down, so you have control over your assets, and you can verify what your app is really doing on the backend. If you take a step back, verifiability, the ability to verify, is the key advantage for consumers.

There have been several 51% attacks on cryptocurrency blockchains like Bitcoin Satoshi Vision (BSV), Bitcoin Gold (BTG), and Ethereum Classic (ETC). More recently, the now-bankrupt exchange FTX was hacked shortly after declaring bankruptcy in November 2022.

In the past few years, some tech futurists have started pointing to Web3, a term coined by computer scientist Gavin Wood, as a sign of things to come. Web3 is the idea of a new, decentralized internet built on blockchains, which are distributed ledgers controlled communally by participants.

Web3 technology is described as trustless in that interactions and transactions do not require trusted third parties and instead rely on smart contracts and the immutability of the decentralized blockchain.

Web3 is and was utter nonsense.

It was a collective useful hallucination, an amorphous container that gathered the failed hopes and dreams of a variety of lost tribes, those espousing the ideologies behind the metaverse, blockchains, cryptocurrencies, democratized content and more.

It is a decentralized web, where users interact with each other and applications without the need for intermediaries. Web3 is built on top of blockchain technology, but it goes beyond just transactions, enabling a more decentralized and democratic internet.

With blockchain at its foundation, Web 3.0 will enable new applications and services based on blockchain technologies in active use today. They include the following: NFTs. Non-fungible tokens (NFTs) are a type of unique cryptographic asset used to create and authenticate ownership of digital assets.

Instead of relying on centralised servers and platforms, Web3 leverages blockchain technology to create a network of interconnected applications and communities.

Blockchain, as the foundation of Web3, is revolutionizing the internet as we know it.