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Jeremy Ikwuje
Jeremy Ikwuje

Posted on • Originally published at Medium

How to Explain Web3 to your Grandmother

If you are entirely new to crypto or if you work in crypto and need a way to explain to your friends and family what exactly it is that you do, you have come to the right place. This article was inspired by Andres Galente who works at Hiro on how he explained what he does for a living to his 93-year-old grandmother.

I’m a Founder at Forward School. Forward School is a company that helps anyone start a career in Web3, and Web3 is a vision for a user-owned internet using blockchain. But I’m getting ahead of myself.

Before talking about Forward School, we have to cover a few things first:

  1. What a blockchain is
  2. What a blockchain application is
  3. What Web3 is
  4. What role Forward School plays in this story

Let’s start from the beginning.

The Double Spend Problem

Hassan, Dayo, Chidi, and John started a savings club. The group trusted John to manage the money, so each time they make a deposit or withdrawal, John informed everyone about the transaction. And also, every month, he sends everyone a receipt of their balances for transparency. Later on, John withdraw some of his savings but didn’t notify anyone about it and also his balance remain the same in the monthly receipts he sent out. John just double spend. John can continue withdrawing from his savings without updating his balance as long as there are enough deposits to handle withdrawals from members.

But let’s say I have 10 dollars in cash. I give you 5 dollars, leaving me with a balance of 5 dollars. I can’t physically spend my 10 dollars again because my balance is just 5 dollars. No double-spending.

John could do that in the group savings because he alone has access to everyone’s money and determines the receipt of transactions and the balance every member receives.

In computer science, this problem is called β€œdouble-spending,” which describes the potential of a single digital money to be spent more than once. Digital money consists of a digital file that can be duplicated. Maybe I just copy/pasted that 5 dollars and sent you a duplicate, leaving me with that same dollar in my wallet too (allowing me to double spend it). An internet version of what John did is to display the balances and transactions of everyone on a portal but only he updates these balances and controls what transactions get displayed.

To get around that issue, we trusted a better central entity (like a bank or PayPal) to verify transactions and dictate the balance of any given account instead of John. But there’s still a problem, we have to hope that the central entity database doesn’t get compromised and they are honest.

A revolutionary solution is when the public could verify transactions of digital money without the need for that central entity (like John, Bank, or Paypal). A trustless solution. A blockchain.

The big blockchain revolution came in 2009 with the arrival of Bitcoin. Bitcoin was the first implementation of a blockchain where, for the first time, the public could verify transactions of digital cash without the need for that central entity. If I have 5 Bitcoin in my wallet, and I send you 2 of them, then we could trust technology and cryptography to update our wallet balances instead of trusting a bank.

An explanation of how Bitcoin works is beyond this article’s scope, but I’ll go through the bare minimum so you can follow along with the rest of the story.

What Is a Blockchain?

A blockchain is literally a chain of blocks. Think of it as blocks lined together piece by piece and each block is unique and a continuation of the previous. Now you might be wondering, what is inside these blocks? You can literally think of these blocks as storage units that stores data so we can store different kinds of things in these blocks.

You may have heard of data storage in Computers, a data storage is just data held in a computer. A blockchain is an open and decentralized data storage. Data in a blockchain are stored in chains of blocks spread across multiple computers network, instead of on a single computer. Because this data storage is open and decentralized, anyone can access, read, and store information in it at any time.

Each blockchain has a consensus mechanism, a way in which this distributed network agrees on what new information is written on that data storage, ensuring that the data is true and therefore trustworthy.

In the group savings, we talked about earlier, using blockchain technology will mean everyone has access to the savings and can view, deposit, and withdraw from it anytime. But because each blockchain has a consensus mechanism, everyone in the group agrees on a set of rules to protect their finances. Everyone has to verify any transaction. If John withdraws from his savings before he gets the money, everyone has to digitally sign it and his balance will be updated and everyone gets a copy of all balances. This way no one can be able to double spend without involving everyone.

Bitcoin as a blockchain has a consensus mechanism called Proof of Work (PoW).

In a PoW network, the people verifying transactions (the new information is written to the data storage) are called miners. These miners compete with each other by expending effort to solve an arbitrary mathematical puzzle. Since solving this puzzle is very hard, miners invest in fast computers and electricity, and as a reward for their actions, the network pays them Bitcoins.

So, a Bitcoin is a reward that the network gives to miners to thank them for verifying transactions. These transactions are verified in batches or blocks. These blocks are mined periodically and strung together as if they were a chain. Hence: blockchain!

This isn’t easy to grasp, and it’s ok if you don’t get it. At this point, you just need to understand that blockchain technology allows doing trustless and decentralized transactions. We trust technology and a network of miners instead of a single entity like a bank, Paypal guys, or John.

If you want to learn more about blockchains, I highly recommend this videothat explains how blockchain works in 9 minutes.

What is Web3?

Bitcoin as a blockchain is, by design, very limited. Bitcoin is a ledger, and you can only read transactions between accounts in the Bitcoin data storage. For example, Account A sent this amount to Account B, Account B sent this amount to Account C, and so on.

In 2009, a Russian-born Canadian developer by the name of Vitalik Buterin was deeply involved in the Bitcoin community and thinking about ways to expand the functionalities of Bitcoin. How could Bitcoin be more than just a store of value? Since Bitcoin is limited by design to just be a ledger, he couldn’t. So he created a new blockchain called Ethereum, which introduced the concept of smart contracts for the first time.

A smart contract is a computer program that runs on a blockchain. Just the way we have apps that run on Android or Windows, a smart contract is literally an app that runs on a blockchain. This ability makes a blockchain programmable, and it opened the doors to what we call today β€œWeb3.”

Web3, also known as a user-owned internet, is an internet where users own all of their information. Today it manifests in two forms: DeFi, or decentralized finance, and Dapps, or decentralized applications.

DeFi aims to remove third parties and centralized institutions from financial transactions where we can replicate any financial instrument that exists β€œin real life” in the blockchain. Think about stablecoins, lending platforms, swappers exchanges, yield farming, etc.

Dapps are applications built on a decentralized network that combines a smart contract and a front-end user interface. Similar to a regular Web2 application, but with a dapp, the data and user information belongs to the user, not to the app.

That’s the vision of Web3: we can create a user-owned internet where the financial information and data of users belong to those individual users.

Now that we covered, at a very high level, what blockchain and Web3 are, let’s talk specifically about how Forward School plays a role.

What Is Forward School?

Forward School, the company I founded and work at, is an educational company that trains anyone to create Web3 and blockchain applications.

Think about it this way: if the vision of Web3 is a user-owned internet, where users have ownership of their data, both financial and personal, then Forward School’s mission is to create the best educational programs and content to allow anyone to learn to create this user-owned internet.

Sound Interesting?

If you’re interested in blockchain, crypto, and web3 and you like to build a user-owned internet, apply for a NodeDegree program.

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