Why do we use our fingerprints to log in to our phones? This is because our fingerprints are easily readable by technology and unique to us, making them very difficult to tamper with or replicate without raising alarms; therefore, if your phone recognizes your fingerprint, it must be you who is attempting to use the phone.
Similarly, once data has been recorded inside of a blockchain, it becomes very difficult to change because every block that has been created in the system has its unique cryptographic key (fingerprint) created and stored in the next block.
At a very high level, each block in a blockchain contains 3 parts: The data of the block, the hash of the block, and the hash of the previous block. The data contains details specific to the block. The hash is the “fingerprint of the block”. What is unique about a block is is that if you change the data of the block, then the hash of the block will change, making the block an entirely different block.
If I hold your hand, I will have access to my own fingerprint as well as access to your fingerprint. And if we repeat this process by forming a chain of human beings standing together then each person will have access to two fingerprints — their own fingerprint and the person standing to the left of them (assuming that they don’t have access to the fingerprint of the person that comes after them in the chain).
Similarly, each block contains information about its own hash (fingerprint) and the hash of the previous block. Connect multiple blocks together and it forms a BLOCKCHAIN.
If a hacker or someone with bad intentions changes the data of a block and hence the hash, the whole blockchain becomes invalid because the chain is broken and the following blocks no longer accurately display the correct hash of the previous block. Now, what the hacker could do is recalculate the hashes of all the blocks again to make the blockchain valid again. Modern computers are extremely powerful and fast!
Blockchains are designed with this in mind. It takes a long time to calculate the proof of work required to identify a block so it would not be feasible to manually do this for a large number of blocks.
These two steps — unique identification and difficult proof of work — make blockchains extremely secure.
Another unique thing about blockchains is that anyone can join a blockchain network. Upon joining a network, you receive a full copy of the blockchain.
And this is exactly what WEB 3 is all about — security, transparency, and accessibility. The following quote sums it all up perfectly.
The whole point of using a blockchain is to let people — in particular, people who don’t trust one another — share valuable data in a secure, tamperproof way.
— MIT Technology Review
Now let’s take minute to break down what exactly WEB 3 is and how it is different from WEB 1 and WEB 2.
Imagine that you are one of 50 farmers living in a rural town. You desire to sell your products to customers in the city. During Web 1, only 5 out of the 50 farmers would be tech-savvy enough to figure out how to travel to the city and set up a food stand. And even the 5 farmers who do figure out how to travel to the city would not know which crops to grow and take with them because they have no way of interacting with their customers — they can only sell the food that they already have. Similarly, during WEB 1, the internet was considered a read-only experience for users and there were only a few creators.
With WEB 2.0, a few large companies have set up a transportation service to take all 50 farmers to the city. The transportation service was even nice enough to help the farmers’ customers interact with the farmers and let them know which types of produce they desire. The only problem is that the transportation companies take a share of the farmers’ profits and monetize upon the farmers’ data mostly in the shadows. WEB 2.0 is defined by user interactivity and the growth of social media platforms.
With WEB 3.0, all 50 farmers are able to figure out how to bypass the transportation service by driving themselves to the city and finding better ways to interact with and involve their customers in the decision-making process. Web 3.0 uses Blockchain technology and Artificial intelligence to allow users to continue interacting with other users while taking ownership of their own data through tokens. This increases the value of UGC and makes it easier to create user-generated content.
Now, what exactly do I mean by tokens?
There are 4 main types of tokens — payment tokens, utility tokens, security tokens, and NFTs (non fungible tokens).
Let’s start off by taking a look at NFTs. Pete Davidson here is going to help me explain:
Essentially, in the old days, before the creation of money, people bartered items for items. And each individual item had a unique value. Since no two NFTs are the same, some are worth more than others and they are distinguishable from each other.
On the other hand, if we look at a cryptocurrency like bitcoin, it is like a dollar where each bitcoin is worth the same amount. If I gave you a one-dollar bill and you gave me a one-dollar bill back, both would have the same value and it would make no difference whatsoever, which bill I have.
A problem today is that large companies have a monopoly on user data and are using it unethically at times to profit off of their users. In fact, evidence even shows that Facebook influenced the 2016 US presidential election.
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With Web 3.0, users will have more privacy and transparency regarding their data. In fact, users will even be able to profit off of their own data by selling it to companies. As an intern at a private equity firm, I have come across a few compelling Web 3.0 startups that do exactly this. For example, one California-based company pays users for their medical data.
Another application of Web 3.0 is security. Because it is easy to identify when the hash of a block on a chain has been changed, and because it is extremely difficult to compromise an entire chain, important documents such as diplomas, identification documents, medical data, and personal information can be displayed as an NFT. This application can also be applied at a governmental level to make voting and tax collection more efficient.
The future of how we use the internet will be drastically different than what we do today. On the metaverse, we will be able to interact with people in VR simulations. There will also be more personalized marketing, websites, and search results driven by AI.
After learning about blockchain technology, I thought of a unique idea for a potential WEB 3.0 startup that I can create one day. I conducted some research and found that there is nothing like this out there today. I would like to create a platform that uses blockchain technology to make an NFT of a person’s resume AFTER the person sends their resume to all of their references and gets them to approve their work experience through my platform.