Written By
Lindsay Presswell
Content Strategist

Understanding Networks

December 7, 2021

One of the reasons Web3 is difficult for newcomers is that the current ecosystem requires a basic understanding of common terminology used in finance, economics, and computer science and engineering. A crypto newbie might have some background knowledge in one of these fields, if they are lucky. As Web3 expands, however, it’s more likely that newcomers may have no grounding in any of these areas.

A “network” is a great example of a concept that is used constantly in Web3, but might be meaningless to someone who does not have a technical understanding of how computers work. This article explains what a network is, what Web3 networks look like, and contextualizes this information using some well-known examples of Web3 networks. 

What is a Network

Very simply, a network is a system of interconnected people or things. In computer science, networks refer to the technical systems that connect computers: modems, routers, servers, personal computers, etc. Digital applications are created that leverage the infrastructure of computer networks as a kind of digital scaffolding for support. 

One of the most famous networks is the World Wide Web, which is supported by a global system of interconnected computer networks. Internet applications like Twitter, YouTube, and Google are a third network “layer” supported by the World Wide Web’s infrastructure. When you create an application that is supported by a network like the World Wide Web, you are “building on top of” that network, in computer science parlance. 

What is a Web3 Network?

The primary pieces of infrastructure in Web3 are blockchains. At a technical level, blockchains are a unique type of network that were created to perform the computing tasks fundamental for supporting cryptocurrencies like bitcoin and ether. These tasks include recording transaction information and confirming the accuracy of that information using various cryptographic consensus mechanisms. 

Here is an important detail that gets a bit confusing: a blockchain network can refer to two different types of networks, both essential components of the blockchain. A blockchain network can refer to the network of actual computers (or nodes) contributing computing power to produce and maintain the second type of blockchain network, which is the digital public ledger of transactions. The second type is a network made up of blocks (a record of all transaction information made within a particular time frame). New blocks are added to the blockchain sequentially and all of the blocks in a blockchain are interconnected.

Well-Known Web3 Networks 

Now that we have an understanding of the technical basics of Web3 networks, we can start to label networks using terms that might be more familiar to newcomers with basic knowledge of cryptocurrencies. 

Bitcoin with a capital B is a blockchain, and so is Ethereum. (The Ethereum blockchain is commonly referred to as the Ethereum Virtual Machine, or EVM for short). Bitcoin and Ethereum are unique networks that are guided by their own consensus mechanisms and approaches to maintaining their public ledgers. They also each have their own native currency, bitcoin and ether. The native currencies are tokens that have been built on top of their respective blockchain networks. Of course, this language recalls earlier digital networks this article touched on, like the World Wide Web and social media networks. 

Web3 may be intimidating for those who do not have a technical or financial background, because each field has its own specific language and cultural touchpoints. Spending a few minutes defining commonly used terms and tracing the evolution of their usage, like we have done in this article, can be a great way to orient yourself and get started in this industry.

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