Introduction to Web3مقدمة Web3

Start from the internet you already use, not from coins.

The early web was pages you read. Somebody published, you read, and there was nowhere for you to write anything.

Then came what we live in now, called Web 2.0 (الويب 2), where you write too. You post, you comment, you upload your photos, and you build followers and an archive stretching over years.

Notice where all of that sits. Your account, your photos and your followers are not with you. They are on a company's servers. It can close the account, change the rules, or stop operating altogether, and you hold no copy to argue from. What you own is permission to use, not ownership.

That is the center point (النقطة المركزية): one party holding the record and deciding what goes in it. It is in nearly every service you open, and in your bank account before any of them.

So what does "web3" mean?

Web3 (الويب 3) is the claim that this could be otherwise. What if the record of what you own were kept somewhere no single company controls? Nobody could delete it, nobody could freeze it, and nobody could change its rules on you alone.

The whole idea fits in a line: take the center point out of the record.

The name is a claim rather than a description, implying a third generation succeeding two before it. What actually got built on the idea is not ownerless social networks. It is money and ownership, almost entirely. Which is why you meet it in a roadmap about financial technology rather than one about the internet.

And there is a sensible reason for that. The record of who owns what money is the first record worth paying for a guarantee that nobody quietly changes it.

How does a record with no centre work?

Open your banking app and look at the balance. That number is not money sitting in a vault with your name on it. It is a row in a database the bank owns and alone writes to. That is the center point in its clearest form.

You are comfortable with it anyway, and you are right to be. The guarantee is not the number on the screen. It is the licence, the regulator and the courts standing behind whoever wrote it.

So ask: what if no party held the row at all? What would stop me from writing myself a million?

The answer found for it is as strange as the question. Do not hand the ledger to anybody. Give a copy of it to everyone who wants one.

Instead of one database at one party, thousands of machines around the world keep a copy of the same ledger. They agree on how to update it, following rules published in advance that nobody can change alone. That arrangement is a shared ledger (السجلّ المشترك). When it is open to anyone it is called a blockchain (سلسلة الكتل). Transactions are gathered into blocks, and each block is chained to the one before it.

So the person who writes themselves a million is refused by every other copy, because the transaction does not follow the rules. That refusal needs no clerk to review it and no judge to rule on it. It needs a calculation each machine runs for itself, arriving at the same answer.

The practical result is that verification no longer needs permission. Anyone can read the ledger and confirm that a particular balance really moved. Nobody can erase a recorded transaction, and nobody can conjure a balance outside the network's rules.

The first working version of this idea was Bitcoin (بيتكوين) in 2009. No company issues it, nobody promises you anything in exchange for it, and its price moves purely on what buyers will pay. Ethereum (إيثيريوم) followed in 2015 and added something different: the ability to run small programs on the ledger itself.

That program is called a smart contract (العقد الذكي). It is neither a contract in the legal sense nor smart. It is a condition written in advance that executes itself: if this amount arrives at this address, send that amount to that one. Its value is that it removes the clerk who checks every step. Its danger is that a bug in it becomes a final loss, with no one to appeal to.

Who holds the key

Ownership on the ledger is not a name or an ID number. It is a private key (المفتاح الخاص), a long secret number, and whoever holds it can move the balance attached to it. There is no "forgot password" button and no branch to complain to. Lose the key and the balance is gone. Have it stolen, and the thief's transaction is perfectly valid as far as the network is concerned.

This is why wallets (المحافظ) split into two kinds, and the difference between them is the most consequential choice a user makes. With a self-custody (الحفظ الذاتي) wallet you hold the key yourself, so nobody can freeze your balance and nobody can rescue you from your own mistake. With a custodial (وصيّة) wallet a company holds it for you, so you can recover access if you forget, and you lose if the company fails.

This is not a technical detail for developers. Most people who lost money in this field did not lose it because a chain broke. They lost it because the company holding their keys collapsed. The clearest case is the FTX exchange, which failed in November 2022 while its customers could still see their balances on the screen.

The product families

You will read these six families one at a time through the rest of this part. What matters now is that they are not one thing. The distance between a speculative token bought by an individual on an app and a tokenised money market fund bought by an institution is wider than the distance between a savings account and a listed share.

The biggest real use is not speculation

Most of what actually moves on these networks today is not Bitcoin. It is stablecoins (العملات المستقرة), tokens that promise to be worth one dollar each. The largest are USDT and USDC, and the next topic covers them properly.

The reason they spread is entirely practical. Sending 100,000 dollars between two companies in two countries can take two days through correspondent banks and pass three institutions that each take a fee. The same transfer in a stablecoin arrives in minutes and costs less. That is why they show up in trade payments, in corporate treasury, and in markets where dollars are hard to reach.

None of which makes them risk-free. A promise is only as good as the reserve behind it, and a coin called TerraUSD collapsed in May 2022 because its backing was algorithmic rather than cash.

What did not change

Intermediaries did not disappear. They changed names. The exchange, the custodian, and the on/off-ramp (منحدر الدخول والخروج) that converts between riyals and tokens are all intermediaries in new shapes. Most customers never see the chain at all. They see an app that looks like a banking app.

The question a supervisor asks did not change either. Supervisors do not ask about technology. They ask about function. Do you hold customer money? Do you promise to give it back? Do you match a buyer with a seller? Do you lend? Each of those functions carries a licence in financial rules, whether it runs on a database or on a smart contract.

This is the mistake beginners make most often: assuming the word blockchain exempts a product from classification. The opposite is true. The functional description is what gets read.

Where the market stands

Countries have started writing rules for this rather than ignoring it. In the European Union, MiCA (ميكا) came into full effect in December 2024, the first comprehensive framework covering stablecoin issuance and the licensing of service providers. In Dubai, the Virtual Assets Regulatory Authority, VARA, was created in 2022 to license platforms operating there.

Saudi Arabia's position is clearer than the rumours suggest: cautious for individuals, interested at the institutional level. No authority currently licenses crypto asset trading for retail investors, and regulators have repeatedly warned against dealing with unlicensed platforms. That is not a rejection of the technology itself. The Saudi Central Bank ran Project Aber (مشروع عابر) with the Central Bank of the UAE, a shared digital currency experiment for settlement between the two, whose results were published in 2020. It has also taken part in mBridge, a cross-border settlement project using central bank digital currencies.

The practical conclusion if you are reading this from Saudi Arabia: the technology is being studied seriously at the central bank level, retail trading through a foreign app is an entirely separate matter, and conflating the two is a mistake.