The Web3 Technology Stack: Explained in 5 Minutes
Explore the core components of the Web3 technology stack and learn how blockchain, smart contracts, wallets, IPFS, Filecoin, and Arweave work together.
Web3 technology is not limited to blockchain. It is made up of multiple layers, including settlement, computation, identity, data access, decentralized storage, and user interfaces. Blockchain records network state, smart contracts execute rules, and wallets handle signing and authorization. IPFS supports content addressing and data distribution, Filecoin uses economic incentives to support persistent storage, while Arweave focuses on long-term data preservation. Together, these components form the infrastructure behind Web3 applications.
Blockchain, Layer 2, and Smart Contracts
Blockchain serves as the settlement and consensus layer of the Web3 technology stack, recording transactions, asset ownership, and smart contract states.
Network participants validate transactions according to consensus rules, reducing reliance on a single database operator. Bitcoin is primarily designed for peer-to-peer value transfer, while programmable blockchains such as Ethereum support smart contracts.
Smart contracts are programs that run on a blockchain and can execute asset transfers, token swaps, lending, governance actions, and other operations based on predefined code. They improve transparency and verifiability, but they do not guarantee that the underlying business logic is always correct.
To reduce transaction costs and increase throughput, some Web3 applications also use Layer 2 networks. Layer 2 solutions typically process more transactions outside the main chain before submitting relevant data or proofs back to the underlying blockchain.
When evaluating a Web3 application, users should understand which blockchain it uses, where assets are ultimately settled, and how cross-chain or Layer 2 withdrawal mechanisms work.
Wallets, Nodes, and the Data Access Layer
Web3 wallets support identity, transaction signing, and asset authorization. When users connect to an application, the wallet provides a public address. If the application needs to execute a transaction, the wallet displays a signing or authorization request.
A private key is an important credential used to control a traditional wallet account, but the assets shown in the wallet are not physically stored on the device. Instead, ownership and balances are recorded on the blockchain. The wallet mainly proves that the user has permission to interact with the corresponding account.
Applications also need nodes to read blockchain data and broadcast transactions. Some projects operate their own nodes, while others rely on third-party node providers. If an application depends on only one node provider, infrastructure centralization risks may still exist.
In addition, raw blockchain data can be difficult to query efficiently. Many applications use indexing services to organize transactions, addresses, and smart contract events. The balances, rankings, and transaction histories users see may come from an indexing layer rather than from scanning the blockchain directly each time.
How Do IPFS and Filecoin Work Together?
Storing images, videos, and large files directly on a blockchain is usually expensive, which is why decentralized storage has become an important part of the Web3 technology stack.
IPFS is an open protocol built around content addressing and peer-to-peer networking. Files are assigned a CID based on their content, and identical content generally produces the same identifier. Applications can use the CID to locate nodes that store a copy of the file instead of relying on a single fixed server.
However, adding a file to IPFS does not mean it will automatically remain available forever. Nodes may remove unpinned content, so important data usually requires users to operate their own nodes, use a pinning service, or combine IPFS with a persistent storage solution.
Filecoin is a decentralized storage network that uses economic incentives and cryptographic storage proofs to encourage storage providers to keep user data available.
In simple terms, IPFS focuses more on content addressing and data distribution, while Filecoin focuses more on creating a verifiable market for persistent storage.
Arweave and Long-Term Data Storage
Arweave is designed primarily for long-term data storage. Its model combines upfront payments with a storage endowment mechanism, aiming to support continued data availability as storage costs decline over time.
Within the Web3 technology stack, Arweave is often used to store NFT metadata, historical records, application front ends, and other public content that may need long-term archiving.
However, long-term or “permanent” storage should be understood as a protocol goal and economic design, rather than an absolute guarantee independent of technical, economic, and network conditions. Continued access still depends on factors such as network participation, protocol operation, gateways, and the legal environment.
A complete Web3 technology stack may also include oracles, cross-chain bridges, indexing services, and traditional cloud infrastructure. The fact that a project uses IPFS or smart contracts does not mean every component is fully decentralized.
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Further Readings:
What Is Web3: A Complete Guide to the Next Generation of the Internet
