Crypto vs. Blockchain Vs. NFT vs. Web3: How are they different?
If you’ve heard of “crypto,” then you’re probably also familiar with jargon like “Blockchain,” “NFTs,” and “Web3,” as well as terms like “decentralization” and “decentralized finance.” However, such terms can often be confusing; you might even think they’re all pretty much interchangeable, meaning pretty much the same thing. That’s because they’re often mentioned in the context of whatever up-and-coming new cryptocurrency happens to hit the headlines at any given time.
But that’s really not the case. Crypto, blockchain and Web3 are actually three very different and distinct things, and to understand exactly what they are, we first need to start by defining what Web3 actually is.
The very name “Web3” suggests that there was a Web1 and a Web2 that preceded it, and you wouldn’t be wrong in that assumption. Web1 can be considered the original Internet that first appeared in the 1990s, a time when people had to run their own servers to create what were read-only websites. It eventually gave way to what has become known as Web2, which is the era of more dynamic websites such as Facebook, Twitter and YouTube, which host user-generated content on centralized servers.
Web3 is therefore a vision of a next-generation Internet that will be decentralized and distributed using blockchain and other technologies. The name was first made by Ethereum co-founder and Polkadot developer Dr. Gavin Wood in 2014, which described an internet where users’ data is not stored on centralized servers, but rather on decentralized blockchains hosted on nodes spread across the globe. No single server, person or entity controls these blockchains. Wood also spoke about the benefits of Web3, which include increased security, secure identities and users’ control over their data.
Blockchain is thus the most important enabling technology for Web3. It is a decentralized ledger that enables users to store and share data and digital assets. Because it is distributed, blockchain allows multiple parties to reach a consensus on the state of the shared records, eliminating the need for a centralized authority to do so. Thus, blockchains can host decentralized applications or dApps that enable people to interact directly, using smart contracts – or code programmed to run automatically when specified conditions are met.
Blockchain has proven to be highly secure and completely transparent, helping to increase accountability and trust.
As far as crypto goes, this is the easiest to define. Crypto is short for cryptocurrency and is basically just a digital currency that can be used on a blockchain platform. The original crypto was Bitcoin, although there are hundreds of different tokens today. Because crypto is tied to the blockchain that supports it, it can be used to interact with dApps hosted on the same blockchain.
Finally, we have NFTs, which are actually quite similar to crypto, but with one big difference. NFTs stand for “non-fungible token”, meaning they are not divisible in the same way as crypto. You can only ever have 1 NFT, while Bitcoin, for example, can be split into many satoshis, i.e. 0.0000003 BTC. NFTs can be used to represent almost any kind of asset, from digital art to video game accessories, metaverse lands, tickets to physical events, and more besides.
To illustrate the differences, it is worth looking at some different Web3 projects. Motherboard is a play-and-earn gaming platform that aims to reinvent the online gambling industry. The game is based on its unique “Maincard NFTs”, which enable players to predict the outcomes of sporting events and events and earn rewards when they make correct predictions. The more correct guesses a player makes, the more valuable the main card NFT becomes, and the bigger the rewards can be.
Maincard is built on the Polygon network, which is not really a blockchain, but a scaling solution for the Ethereum blockchain. However, Polygon still has its own cryptocurrency, known as MATIC, which is used to purchase Maincard NFTs and reward players for correctly guessing the outcome of games. Maincard, which currently offers new users $100 worth of NFTs as a sign-up bonus, will launch later this year. It qualifies as a Web3 project because it is decentralized, and users own the actual assets – the NFTs – and are free to resell them to the highest bidder if they choose.
Looking Glass Labs, meanwhile, is a Web3 firm that specializes in building NFT architecture, immersive metaverse environments, games to earn tokens, and royalty streams for virtual assets. The main brand is Web3 design studio Kibaa’s house, who have designed some of the most novel NFT use cases envisioned so far. The best known of the NFTs are GenZeroes collection. GenZeroes is a live-action NFT-integrated multi-episode digital series set in the metaverse in both video and cartoon format. It has had a cult following since its launch in early 2022. By holding GenZeroe’s NFTs, fans of the series get to help shape the story for future episodes, as well as early access to all new episodes.
A somewhat similar Web3 project is UNOPENED, which is an incubator of blockchain-based NFT games and metaverse projects looking to support innovative new use cases. UNOPND currently supports a number of NFT-focused projects, including the decentralized K-Pop startup Modhausif fans choose which group members are involved in the latest songs, and Derby starsa metaverse horse racing game where players can race, breed, breed and train their own NFT horses
UNOPND’s name refers to the goal of unlocking the “unopened” value of the Web3, where the “open” world will enable limitless imagination and freedom through the power of blockchain, NFTs and crypto, its major enabling technologies.
