The relationship between Web3 and Bitcoin and other cryptocurrencies

Web3 is the next stage in the evolution of the Internet, and it provides users with features like decentralization, sovereignty, and interoperability. Web3 and cryptocurrencies are closely related and bring significant changes for most industries because they provide users with access to blockchain networks and decentralized applications and transform how people interact with digital assets. When switching to Web3, users benefit from an increased level of control over their information and digital identity management when they perform peer-to-peer transactions because they don't have to deal with intermediaries. The shift towards decentralization also triggers an increase in the number of people interested in buying cryptocurrencies like Bitcoin, as  the current Bitcoin price shows, because digital currencies allow them to engage with a global market and take advantage of new financial possibilities.    

Did crypto trigger the growth of Web3? 

Everyone who had any interaction with the two terms should know that cryptocurrencies came first. And while their inception didn't necessarily trigger the birth of the Web3, you need a crypto wallet to access the new generation of the Internet. Digital wallets have been created to allow internet users to carry cryptocurrencies like Bitcoin, and have become the backbone of Web3. Web3, similar to crypto, relies on blockchain technology to develop peer-to-peer networks and decentralized applications. 

Blockchain is the force that powers Web3. Blockchain is an innovative technology that functions like a digital ledger everyone can access but it is impossible to tamper. All blocks added to the network are chained between each other, making the ecosystem transparent and secure. Web3 relies on blockchain technology to develop decentralized applications for diverse industries. Their decentralized nature implies that no single entity controls the application. Blockchain is paramount for the functionality of Web3 because it guarantees that the new generation of the Internet operates transparently and securely. 

It's more accurate to say that blockchain, instead of crypto, is the foundation of Web3 because it works as the structural base for the features it aims to provide the public with. Thanks to blockchain technology, user sovereignty, security, and decentralization are possible because it allows data to be managed and stored securely and prevents third parties from interfering with it. 

Web3 proves that blockchain can be used for more than powering crypto

Many people had the misconception that blockchain can only be used to develop crypto projects, but as the technology evolved and entered other sectors, they've started to understand that it can do more. Web3 proves that blockchain has extensive capabilities, and developers can push its limits. The innovative technology functions like a decentralized ledger that guarantees transparent and secure transactions. But Web3 uses it for more; it employs it to create a decentralized form of the Internet, which is user-focused and relies on cryptographic protocols. This approach of using blockchain technology has led to the development of applications like decentralized finance, which runs with the help of smart contracts. 

What are Web3 cryptocurrencies?

Web3 crypto has become the latest buzzword in the sector because it has vast applications in diverse sectors – gaming, social media, governance, and finance. Web3 crypto is a decentralized system that promotes the idea of removing intermediaries from transactions. The advent of blockchain has made it possible to eliminate third parties like financial institutions or banks. When there is no one else involved in the transaction besides the two parties, they benefit from increased security, efficiency, and transparency. Digital users find security of utmost importance because they want to safeguard their data and finances from malicious entities and hackers. Cryptocurrency offers improved security to users compared to traditional systems. Web3 crypto also powers innovative business models because it allows organizations to operate in a decentralized way. 

The most popular Web3 cryptocurrencies

Web3 cryptocurrencies are used to access networks and complete transactions and are far more desirable than fiat currency by those who want to access decentralized ecosystems. 

Bitcoin is the oldest and most popular digital currency. It was introduced on the market by an anonymous developer under the name of Satoshi Nakamoto in 2009 and went through multiple bear and bull phases, which allowed it to increase in value and establish its leadership on the market. Bitcoin introduced the idea of a decentralized network for the first time and provided Internet users with the option of completing transactions without relying on intermediaries. Its popularity sprang from the widespread adoption of digital currencies. 

Ethereum is the largest altcoin by market cap and has put the basis of the smart contracts technology, which is widely used nowadays to complete transactions online. Its extensive use of blockchain has led to the development of the dApp ecosystem. Ethereum is usually the second asset people turn to when they want to invest in cryptocurrencies because it allows them to diversify their portfolios, which often include a large amount of Bitcoin. 

Polkadot is an advanced crypto project that uses blockchain technology to power decentralized applications. It aims to improve the collaboration between blockchains and provide developers with a scalable and secure infrastructure for crypto applications. 

In the altcoin sector, Cardano is also known as a sustainable and secure blockchain that enables the creation of crypto apps based on a decentralized blockchain platform. Together with Ethereum, Cardano uses the proof-of-stake algorithm to lower its energy consumption and is one of the most eco-friendly blockchains. 

Solana aims to help users complete affordable and rapid transactions using blockchain technology. It has become renowned for providing developers with a scalable infrastructure to build applications that promote the use of crypto. 

Avalanche is another crypto project that aims to enhance the interoperability between blockchains. It has become a key player in the crypto sector, and developers usually turn to it when they need a scalable and fast network to host their crypto applications. 

The connection between Web3 and cryptocurrencies is close and promises further innovation. They both take advantage of blockchain technology to provide people with a decentralized environment where they can interact securely. As they continue to grow, they could reshape the Internet as we know it.

(Disclaimer: Devdiscourse's journalists were not involved in the production of this article. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse does not claim any responsibility for the same.)