What technologies support Web3?

Web3 describes what the internet could look like built on new types of technology. Here are the three main ones:

Blockchain. A blockchain is a digitally distributed, decentralized ledger that exists across a computer network and facilitates recording of transactions. As new data are added to a network, a new block is created and appended permanently to the chain. All nodes on the blockchain are then updated to reflect the change. This means the system is not subject to a single point of control or failure.

Smart contracts. Smart contracts are software programs that are automatically executed when specified conditions are met, like terms agreed on by a buyer and seller. Smart contracts are established in code on a blockchain that can’t be altered.

Digital assets and tokens. These are items of value that exist only digitally. They can include cryptocurrencies, stablecoins, central bank digital currencies (CBDCs), and NFTs (nonfungible tokens). They can also include tokenized versions of assets, including real things like art or tickets to concerts or sporting events.

Later, we’ll see how each of these technologies is used in practice, with real-world examples of Web3-supported products.