Blockchain, Cryptocurrency and Web3 Explained for Kids

Estimated reading time: 4 minutes

• 🗄️ What is Blockchain?
• Features of blockchain are:
• 💰 What are Cryptocurrencies?
• Benefits of cryptocurrencies:
• 🌐 What is Web3?
• Web3 aims to make the internet:
• Potential benefits of Web3 are:
• About The Author

🗄️ What is Blockchain?

Let’s think of blockchain as a special diary that is copied among many different computers. This diary can be used to record transactions – like person A sending money to person B.

The exciting part is that once a transaction is written in the diary, it can never be erased! And for a new transaction to be added, all the computers have to agree that it is valid. This prevents anyone from cheating or changing the records.

Since many computers worldwide have a copy of the blockchain diary, it allows information to be recorded in a decentralized way. There is no one central authority in charge. The blockchain rules and math protect the diary from being modified once data is added.

This blockchain diary can be used to keep track of important information, like money. Cryptocurrencies like Bitcoin use blockchain to record who has coins. Blockchains are also programmed with rules that everyone in the network must follow to make valid changes. This ensures that transactions happen properly without the need for a middleman.

Features of blockchain are:

Decentralized – The data is spread across many computersPermanent – Transactions can’t be deleted or changedVerified – Transactions must be checked before adding to the blockchainSecure – Advanced cryptography prevents hacking

💰 What are Cryptocurrencies?

Cryptocurrencies like Bitcoin are digital money built on blockchain technology. Each coin is a unique digital file recorded on the blockchain.

Because blockchain diaries are decentralized and permanent, they provide a way to track who owns which coins. When person A sends 1 Bitcoin to person B, it gets recorded on the blockchain ledger for everyone to see.

Cryptocurrencies use cryptography (advanced math) to keep the system secure. Users have private keys to prove they own their coins and send transactions.

Benefits of cryptocurrencies:

Decentralized – No central authority controls themSecure – Encryption and blockchain prevent fraudAccessible – Anyone can access and use cryptocurrencies

🌐 What is Web3?

Web3 is about using blockchains & crypto technology to make the internet work better. Right now, big companies control a lot of the internet and your data.

In Web1, most people could just read websites. Web2 allowed people to write, share, and connect through sites like Facebook and YouTube.

Web3 aims to make the internet:

Decentralized – Not owned by any one companyUser-controlled – You own your data and identityTransparent – You can see how it works behind the scenes

Blockchain and cryptocurrency make Web3 possible because they are decentralized networks. Web3 services can be built directly on blockchains rather than company servers.

In Web3, users would control their own money, data, and identity. There would be open competition rather than domination by a few big tech companies. Users could browse decentralized apps and services.

Potential benefits of Web3 are:

Open networks with no single point of failureUsers control their identity, data, and assetsTransparent systems and transactionsLess dominance by tech monopoliesInnovative new applications and services

Web3 promises an internet controlled more by users than corporations. The blockchain technology behind cryptocurrency plays an important role in making this possible.

So in summary:Blockchain is a decentralized ledger for recording transactionsWeb3 uses blockchain to create a user-owned internet

About The Author

artificialrace.com

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