Important Web-3 Concepts You Should Understand

1.Blockchain

What is a blockchain?

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A peer-to-peer network of computers (referred to as nodes) that are connected to one another and utilize a consensus method to agree on the ledger's current state to create a tamper-proof ledger of data/information made up of cryptographically linked blocks (or units of information)

2. Block

A blockchain is created by connecting individual blocks, each of which is made up of data.
A block, for instance, in the context of the Bitcoin blockchain, comprises information about transactions and a reference to the block before it.
Cryptographical links are used to connect blocks.
Due to the fact that altering a single block in a blockchain will affect all subsequent blocks as well, this makes a blockchain encrypt.

3. Web-3

Web-3 is a version of the World Wide Web that is decentralized, permissionless, and trustless.
Data is no longer stored in private databases in Web-3 applications (also known as Dapps or Decentralized applications), but rather on an open-data structure (blockchain) that anybody can write to, read from, prove ownership of resources on, and verify.

4. Distributed Network

It is a system of computers (called nodes) that is not owned and managed by a single person or group.
A decentralized peer-to-peer network manages a blockchain.

5.Peer-to-Peer Network (P2P)

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It is a group of computer nodes that communicate with one another to share workload and preserve consistency of state.
P2P networks can work both with and without a centralized authority (a decentralized network).
There is no central organization involved in peer-to-peer networks that maintain blockchains, and peers come to a consensus through a consensus mechanism.

6. The consensus procedure

It is a method or protocol that enables several nodes in a multi-node system (the peer-to-peer network of a blockchain) to concur on a shared state.
This refers to deciding on the legitimacy of the upcoming block that will be added to the blockchain in the context of a blockchain.
Blockchains frequently employ the Proof of Work (PoW) and Proof of Stake (PoS) consensus processes.

7. Hashing/Cryptographic Function

It involves employing a hash function to translate data of any size to a fixed-size result.
A hash function is a deterministic one-way function in mathematics. RipeMD and SHA are two instances of regularly used hash functions.
The hashing technique yields a consistent outcome and is simple to carry out yet challenging to undo.
However, it is currently impossible to conduct the reverse procedure, that is, to discover the string that was used to create a certain hash (unless they use the Brute force approach of comparing all key-to-hash)

8. SHA (Secure Hash Algorithm) (Secure Hash Algorithm)

The National Institute of Standards and Technology (NIST), located in the United States, has released this family of well-known hash functions.

The Bitcoin blockchain frequently employs hash algorithms from the SHA-2 family (for instance, SHA-256).

9.Comparing fungible and non-fungible assets

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An asset that can be traded for other assets of the same kind is referred to as fungible.
For instance
A penny, can be traded for any other pennies.
There are no distinguishing qualities between the two pennies.

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Bitcoin is yet another illustration. Bitcoins are identical to one another.
An asset that has a distinct value and cannot be swapped for another asset is said to be non-fungible.
For instance, a printed reproduction of the original Mona Lisa artwork cannot be compared to or taken the place of it.
NFTs, which are exclusive tokens of digital assets on the Ethereum blockchain, are a further well-known illustration.