Introduction to Web3 and DAOs
There is a lot to learn in the world of Web3 and DAOs, but don’t be discouraged! We’ve put together this helpful list of key concepts along with a brief description and links to YouTube videos by Whiteboard Crypto. These concepts are essential for anyone new to the space, and will provide you with a strong foundation on which to build your understanding of these concepts. So sit back, relax, and hit play — you’ll be an expert in no time. If you are already familiar with any of these concepts, then feel free to jump to the next one!
- What is Web3? (8 min)
- What is a Blockchain? (8 min)
- What is a Smart Contract? (8 min)
- What is a Wallet? (5 min)
- What is MetaMask? (6 min)
- What is a DAO? (8 min)
- What is a DEX? (7 min)
1. What is Web3?
The ‘web3 stack’ is a combination of protocols and technologies that power the next generation of the internet. It includes a decentralized infrastructure for hosting applications, storage, and communication; a set of cryptography-based primitives for building secure applications; and a decentralized virtual machine for executing smart contracts. The stack is still in its early stages of development, but it has the potential to power a new breed of decentralized applications that are more secure, private, and censorship-resistant than those built on the existing web infrastructure. In short, web3 is the foundation for a new internet.
2. What is a Blockchain?
A blockchain is a distributed database that is used to secure digital transactions. It is a decentralized system that allows for secure, verifiable, and tamper-proof transactions. The data in a blockchain is stored in a shared ledger that is maintained by a network of computers. Each transaction in the blockchain is verified by the consensus of the network. This verification process makes it virtually impossible for fraudulent transactions to take place. As a result, blockchain technology has the potential to revolutionize the way we conduct digital transactions.
3. What is a Smart Contract?
A smart contract is a contract with the agreement solidified in code. The code and the agreements contained exist across a decentralized, peer-to-peer network and will execute automatically upon the completion of predetermined conditions. Smart contracts permit transactions and agreements to be carried out by parties without the need for a central authority. By eliminating intermediaries, smart contracts have the potential to create a more efficient, transparent, and secure system for conducting transactions. Smart contracts also have the potential to reduce costs by eliminating the need for things like third-party verification and services. In addition, smart contracts can help to speed up transactions by automating tasks that would traditionally be performed by human intermediaries. Ultimately, smart contracts have the potential to revolutionize the way we conduct transactions and enter into agreements by providing a more efficient, secure, and cost-effective alternative to traditional contracts.
4. What is a wallet?
A crypto wallet is a digital wallet that stores cryptocurrency. Unlike a traditional wallet, which might store paper bills or credit cards, a crypto wallet holds digital “coins” that are used to purchase goods and services online. There are different types of crypto wallets, but all of them work in essentially the same way. When you want to make a purchase with cryptocurrency, you will use your crypto wallet to send the coins to the seller. In order to do this, you will need to have a digital currency “address,” which is like a bank account number. Once the coins have been transferred, they will appear in the seller’s digital wallet. Crypto wallets are often compared to bank accounts, but there are some important differences. For one thing, crypto wallets are not regulated by governments or financial institutions. This means that if you lose your coins, there is no guarantee that you will be able to get them back. Additionally, crypto wallets do not typically come with built-in protections against fraud or theft. As a result, it’s important to choose a reputable and secure provider when setting up a crypto wallet.
5. What is MetaMask?
Metamask is a cryptocurrency wallet that allows you to store, send, and receive digital assets. It also allows you to access decentralized applications (dApps) on a network. Metamask is available as a browser extension for Google Chrome, Mozilla Firefox, and Brave. It is also available as a mobile app for Android and iOS. To use Metamask, you first need to create a seed phrase, which is used to generate your private keys. You then need to add an account, which will be used to store your digital assets. Once you have created an account, you can then proceed to add digital assets to your wallet. You can also use Metamask to sign transactions and messages. This can be useful when interacting with dApps or when sending transactions on a network like Polygon or Ethereum. Overall, Metamask is a great way to securely store and manage your digital assets.
6. What is a DAO?
A DAO, or decentralized autonomous organization, is a type of organization that is run through smart contracts on a blockchain. While traditional organizations are centrally controlled by a group of individuals, DAOs are transparent and democratically governed by their members. This makes them agile and allows them to quickly adapt to change. Additionally, because DAOs are transparent, all members have visibility into the organization’s activities and can hold the organization accountable for its actions. Finally, because DAOs are governed by their members, they are more resistant to corruption and abuse of power. As a result, DAOs have the potential to fundamentally change the way organizations are run.
7. What is a DEX?
A DEX, or decentralized exchange, is a type of crypto exchange that allows users to trade digital assets without the need for a third-party intermediary. Instead, trades are executed directly between users on a decentralized platform that is powered by smart contracts. This makes DEXs more secure and efficient than traditional exchanges, which are often susceptible to hacking and manipulation. Additionally, DEXs typically offer lower fees than centralized exchanges and provide users with greater control over their personal information. As the name suggests, a DEX does not have a central point of control, which makes it less vulnerable to attack. Instead, it relies on a network of nodes to process transactions and store data. This decentralized structure also allows DEXs to operate 24/7 without the need for downtime.