Web3 is the next major phase of the Internet, one that could change the web space as we know it forever
The Internet or Web is an evolving project that has helped onboard billions of people into the Web space and created a stable and robust infrastructure on which it exists. At the same time, a handful of centralized entities control vast parts of the Internet, unilaterally deciding what should and should not be allowed.
In this article we look at the next important iteration of the Web, one in which users take control over the centralized corporations that dominate the Internet today.
The main reason so many people are working hard to redesign the current internet is that most popular online platforms are controlled by just a few powerful companies that profit from user-generated data.
Web3 or Web 3.0 is the long-awaited revolution that is set to change the makers. Instead of an Internet monopolised by big tech companies, Web3 embraces decentralisation and is built, operated, and owned by its users. Web3 puts power in the hands of individuals rather than corporations.
But before we talk about Web3, it’s worth looking at how it got here.
Web 1.0: Just read (1990-2004)
To understand what Web3 is, we first need to understand earlier versions of the Internet.
In 1989, at CERN, Geneva, Tim Berners-Lee was busy developing the protocols that would become the World Wide Web, or the first version of the Internet. His idea was to create open, decentralised protocols that would allow information to be shared from anywhere on Earth.
The first form of the internet, now known as ‘Web 1.0’, existed roughly between 1990 and 2004. Web 1.0 consisted mainly of static websites owned by companies and there was almost no interaction between users – individuals rarely produced content.
The first phase of the Internet can be characterised by the way users initially interacted with the Web. Most users during the first iteration of the Web were passive consumers of content. In other words, Web 1.0 was about reading and not writing. It was static rather than dynamic, which changed with the advent of Web 2.0.
Web 2.0: Reading and writing (2004-present)
The main elements of the next phase of the internet are users and interactivity.
The Web 2.0 period began in 2004 with the emergence of social media platforms. The network that was just for reading evolved to become also for writing. Companies instead of delivering content to users also started to create platforms for sharing user-generated content and getting users to interact with each other.
As more and more people discovered the online environment, several leading companies began to collect and control a disproportionately large amount of traffic that generates invaluable value. Thanks to Web 2.0, a new ad-based revenue model has emerged. While users were creating content, they could not own or monetise it.
In this phase, users ended up creating most of their content on platforms such as YouTube, Facebook, or Twitter. This type of internet is much more social and collaborative, but it comes at a price. The downside of this type of internet is that by creating content, users also provide information or personal data to the companies that control these platforms.
What is Web 3.0?
Web 3.0 is the next phase of the Internet, which is still in development – now there is no definitive definition of what Web 3 is or will be.
In general, however, Web 3.0 refers to the internet created and delivered by decentralised networks such as Bitcoin and Ethereum. A key innovation of these networks is that they enable the creation of platforms that are not controlled by absolutely no single, centralised entity, but that everyone can trust. This is because every user and operator of these networks must follow the same set of codified rules known as consensus protocols.
The second innovation is that these networks allow you to transfer value or money between accounts. These two things – decentralisation and digital money – are key to understanding Web3.
Who invented Web 3.0?
Like previous versions of the Web, there was no single creator of Web 3. Instead, it emerged as a collaboration of different people and organisations building on top of each other. In general, those involved in blockchain smart contracts platforms such as Ethereum, EOS and TRON are recognised as the leaders and promoters of Web 3.
Why is Web 3.0 so important?
The main benefit of Web 3 is that it attempts to solve the biggest problem Web 2 poses: the collection of personal information by private networks, which is then sold to advertisers or perhaps even stolen by hackers.
With Web 3, the Internet is decentralized, so no one can control it, and the decentralized applications (DApps) that are built into the Web are open. This openness of decentralised networks means that no one party can control the data or restrict access. Anyone can create and connect to different decentralised applications without the approval of a central company.
In Web 3, money is native to the network. Instead of using currencies of traditional financial institutions that are controlled by governments and restricted by borders (such as euros or dollars), money in Web 3 is transferred instantly globally and without permissions. It also means that tokens and cryptocurrencies can be used to design entirely new business models and economies, an area that is becoming increasingly known as tokenomics.
For example, advertising on the decentralised internet does not rely on selling user data to advertisers but could instead reward users with a token for viewing ads. This type of Web 3 application is developed by Brave Browser using the Basic Attention Token (BAT) currency.
Web3 gives you ownership of your digital assets in an unprecedented way. For example, suppose you play a Web2 game, if you purchase an item in the game, it is tied directly to your account. If the creators of the game delete your account, you lose those items or if you stop playing, you lose the value you invested in your in-game items.
Web3 allows you to own property directly through non-fungible tokens (NFT). No one, not even the creators of the game, has the power to take ownership away from you, and if you no longer want to play, you can sell or trade your in-game items on open markets and get your investment back.
Traditionally, you create an account for each platform you use. For example, you may have a Twitter account, a YouTube account, and a Reddit account. Want to change your display name or profile picture? You need to do it in each account. With one click, these platforms can block you without giving you any explanation. Even worse, many platforms ask you to trust them with the personally identifiable information they collect when you create an account.
Web3 solves these problems by allowing you to control your digital identity with an address from your wallet. Using an address gives you a single method of logging in across platforms that is secure, censorship-resistant, and anonymous.
Web2’s payments infrastructure relies on banks and payment processing companies, excluding people without bank accounts or those who happen to live across the wrong country borders. Web3 uses tokens such as ETH, ADA or SOL to send money directly to the browser and does not require a trusted third party.
Web 3.0 limitations
Despite the many benefits of Web3 in its current form, there are still many limitations that the ecosystem needs to address for it to grow and recognize major adoption.
Important Web3 functions such as logging in are already available for anyone to use at no cost. But the relative cost of transactions is still prohibitive for many. Web3 is less likely to be used in underdeveloped or developing countries because of high transaction fees. On Ethereum, these challenges are solved by network upgrades and tier 2 scaling solutions such as Poligon. But there are also blockchains that charge very little and are accessible to the masses such as Cardano and Avalanche.
The technical barrier to using Web3 is currently too high. Users need to understand security concerns, understand complex technical documentation, and navigate non-intuitive user interfaces. Wallet vendors are working to address this, but more progress is needed before Web3 is widely adopted.
Web3 introduces new paradigms that require learning different mental models than those used in Web 2.0. Similar activity occurred as Web 1.0 gained popularity in the late 1990s; World Wide Web advocates used a variety of educational techniques to educate the public – from simple metaphors (the information highway, browsers, web surfing) to television broadcasts. Web3 is not difficult, but it is different. Educational initiatives that inform Web2 users about these Web3 paradigms are vital to its success.
The Web3 ecosystem is young and rapidly evolving. As a result, it currently depends mainly on centralized infrastructure (GitHub, Twitter, Discord, etc.) Many Web3 companies are rushing to fill these gaps but building high-quality and reliable infrastructure takes time.
How do you use Web 3.0?
There are many Web 3 applications that are currently available. One of the most popular and promising products involves decentralized finance (or DeFi) tools whereby users can borrow and lend, tokenize real-world assets, make predictions, invest, and trade crypto assets. P2e gaming, gambling, and betting are also popular ways to use Web3.
What can we expect in the future?
The future of the Web lies in increased usability, usability, and scalability. For the Web3 vision to become a reality, many more people will need to start using Web3 applications. This doesn’t just mean more Dapps, but also decentralised applications that are easier to use and more appealing to non-technical users.
Web3 is a young and evolving ecosystem. Gavin Wood coined the term in 2014, but many of these ideas have only recently become reality. In the last year alone, there has been a considerable increase in interest in cryptocurrencies, improvements in tier 2 scaling solutions, massive experimentation with new forms of governance and revolutions in digital identity.
We’re just at the beginning of creating a better Internet with Web3, but as we continue to improve the infrastructure that will support it, the future of the Web looks bright.
Would you like to create your own Web 3 project? Contact Enkronos team today.