If you are new to the world of web3, crypto, or NFTs, you probably feel confused by the industry lingo.
“What the heck is a holder?”
Don’t worry — you aren’t alone. I felt the same way the first time I heard about web3 technology.
Let me break it down for you. By the end of this blog, you’ll be a fluent web3 native.
What is the blockchain?
Before you understand what a holder is, you need to understand the basic components of the blockchain.
Blockchains make up the web3 ecosystem.
A blockchain is a decentralized digital ledger, meaning it keeps track of information in a secure, public, and unchangeable (also called ‘immutable’) way.
To better understand this idea, visualize the blockchain as a literal chain of blocks. Each block within the chain contains an immutable record of transactions. The chain will continue to grow as more transactions take place, adding more boxes full of on-chain data.
What is the difference between on-chain and off-chain data?
Before the creation of the blockchain, any piece of content or data on the internet would be known as off-chain data. It gets its name because it is quite literally stored off of the blockchain.
Some examples of off-chain data would include Instagram posts, comments on Tik Tok, blogs, and even your email address. Although all of these examples are publicly available on the internet, people cannot own any of this data because it lives on a server like Google, Meta, etc.
This is where on-chain data is different from off-chain data — users own their data on the blockchain.
On-chain data is any piece of information that lives on the blockchain. Some examples include NFTs, cryptocurrency, and smart contracts.
What is a crypto wallet?
To complete interactions or own data on the blockchain, users need to have a crypto wallet. A crypto wallet is just what it sounds like — it houses the user’s web3 assets securely in one place.
What is a holder?
Web3 users purchase NFTs with cryptocurrency. After completing the transaction, they “hold” that NFT in their crypto wallet.
The term holder refers to web3 users that hold something in their crypto wallet. Often, businesses will call their customers holders (because the customers own an NFT from that brand, essentially holding it in their crypto wallet).
Brands engage with their holders (customers) to build loyal communities.
Our company, a web3 CRM and marketing platform, is named Holder — emphasizing the power of understanding your audience and providing them with personalized experiences.
Why is web3 important?
Now that you understand web3 terminology, you may be wondering what’s the point of using this technology.
Web3 is dependable technology that empowers individuals to have greater control over their data with full transparency.
This technology matters because, for the first time, it allows users to share data without relying on a central authority, like a bank or a company.
Continue diving deeper into web3 jargon with this helpful Twitter Thread. If you are interested in learning more about the ways brands interact with their web3 audiences, read our article about 17 big-name brands in web3.