Cryptocurrencies and blockchain are the building blocks of Web3. However, the decentralized web also relies on technologies such as AR, VR, IoT and others unrelated to blockchain or digital currencies.
The third generation of the internet, known as Web3, is based on blockchain technology. However, technologies such as machine learning, big data, artificial intelligence (AI), the Internet of Things (IoT), augmented reality (AR), virtual reality (VR) and others are enabling decentralized apps (DApps) to access information in a sophisticated human analyze -like way in a Web3 environment.
For example, virtual reality headsets will create an exceptional shopping experience where customers can interact with the products before they buy them. However, these technologies are not based on cryptocurrencies or distributed ledger technology, but aim to increase the efficiency of blockchain technology.
Additionally, blockchain plays an important role in building Web3’s infrastructure, enabling organizations to decentralize Web2 services, including cloud computing, social networking sites, and databases. Therefore, the combination of AI and blockchain technology will undoubtedly provide organizations with a better way to manage sensitive records.
By validating the provided data, the AI technology can quickly complete the process request, and the intelligent algorithm helps to make quick decisions about spending funds or approving loans. The data records can also be effectively protected via the blockchain. Similarly, other technologies such as AR and VR are critical to defining the metaverse, exploring novel ideas, and enhancing virtual experiences.
Additionally, cryptocurrencies eliminate the need for a reliable middleman by allowing Web3 users to use tokens like Ether (ETH) to send and receive money. However, cryptocurrencies support peer-to-peer payments and can serve as a digital-native method of remittance. Without cryptocurrencies, blockchains would lack the incentive system for network participation. Also, without crypto wallets, users would have no place to store the cryptocurrency.
Additionally, Web3 aims to be permissionless, trustworthy and open to all as it embraces the crypto ethos. Similarly, non-fungible tokens (NFTs) allow users to transparently demonstrate proof of ownership for items such as in-game assets, digital art, personal information, and others.