Everything Crypto Explained

Cryptos, blockchain, NFTs, and Web 3.0 all explained.

“Yo did you hear about Bitcoin?”

“Web 3.0 is secured because of the blockchain!”

“Ethereum 2.0 is having a proof-of-stake system!”

You probably heard people say this. Many times. After all, that’s why you’re here. Even if you know nothing, everything is going to be explained here. NFTs, blockchain, Web 3.0, etc. Everything.

Everything is powered by the blockchain. Cryptos, NFTs, and Web 3.0.

The blockchain is like a database or a digital ledger. It is just a list of records, all chained together.

Blocks are the individual records on the blockchain. Each block contains:

The blockchain was created so that data could be stored in a decentralized environment. This means that nobody owns all of the data singlehandedly. Instead, everyone has their copy of the blockchain, and each time a new block is added, everyone’s blockchain also gets the new update.

Decentralization. The blockchain is decentralized, again, meaning that nobody owns and everybody has a copy of the blockchain. Each copy is synchronized with the other.

If a cryptocurrency (see the crypto section for more information) is running on the blockchain, then every participant of the blockchain (called nodes) has a wallet address. They have a public wallet address for receiving transactions, and a private wallet address for spending. The public wallet address is public, but the private wallet address should always be private. You can think of the public wallet address as a username, and the private wallet address as a password.

How does it work?

Cryptocurrency is just digital currency. However, what makes it different from U.S. dollars or any other currency is that it removes the need for a middleman. For example, if you wanted to send someone some dollars, your transaction would go through a middleman like your bank, before going to the other person.

In crypto meanwhile, there is no middleman, therefore you do not need to trust anyone. Your transaction goes straight to the other party. What makes cryptos secure is the underlying blockchain technology.

Ah. NFTs. The craze. Most people don’t even know what it stands for and still try to get into it.

NFT stand for a non-fungible token, meaning that each NFT token is non-fungible. This means that one NFT is not equal to another NFT, unlike one Bitcoin that has the same value as another Bitcoin. An NFT is a unique digital asset, mostly digital art, and people bid for them in a cryptocurrency called Ethereum. The winner of the bidding gets the NFT and is the official owner. Now yes, anyone can take a screenshot of the NFT right in their browser, however, they are not the official owner of the NFT, meaning it won’t have any value. It’s like Pokemon cards, if you print out a copy of a Pokemon card, nobody will want it since it is just on plain paper.

NFTs are run on the blockchain also.

This is where the craze begins. NFT collections are just like what they sound like: a collection that contains many NFTs. These NFT collections are made up of a few base layers, like eyes, hair, mouth, nose, shirt, etc. Then, these base layers are combined to make a unique NFT.

But what makes this interesting, is that certain base layers have different rarities, like a certain type of hair which is rare. This rarity and scarcity drive value for NFTs.

To learn more about NFTs, see this blog by me.

Web 3.0 is an idea for the next iteration of the web, ran on the blockchain. How Web 3.0 is expected to work is that you own all of your data. In the modern age of technology, monopolies and tech giants collect and sell your data to third-party companies. Meanwhile, in Web 3.0 you own all of your data. You can choose to sell it you wish, and you can remove it whenever you like.

To incentivize users, Web 3.0 promises to “tokenize” every possible interaction. This means that every possible action will reward the users with some type of token, either cryptocurrency or an NFT. Then, the user will have a collection of cryptocurrency and NFTs and can sell it in this vast ecosystem of tokens.

Nobody knows the future of crypto. Nobody knows the future of NFTs. Nobody knows the future of Web 3.0. But one thing is certain, blockchain technology will continue to be used and will have a huge impact on our lives.

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