Web3 promises to be a decentralized, permissionless and trustless version of the internet that leverages blockchain technology.
Web3 or Web has become the relatively new buzzword in the tech space that crypto insiders and venture capitalists have become infatuated with. Youtube videos, tech podcasts, blogs and even Twitter threads on social media have become littered with web3 being interchangeably used together with metaverse. Web3 is a pretty broad term that means different things to different people.
The term Web3, alternatively referred to as Web 3.0 is an idea for a version of the Internet that is fully decentralized and based on peer-to-peer technologies such as public blockchains.Web3 will be essentially be deployed in the form of decentralized platforms and applications (dApps) that run on the blockchain. These are applications that are owned and built by the users and allow anyone to participate without monetizing their data. First coined by Ethereum co-founder and Polkadot creator Gavin Wood back in 2014, Web3 has become an umbrella term bringing together some ideas all aimed at eliminating middlemen on the internet.
Web 3.0 cutting out the middleman
The middlemen on the internet refer to the giant technology companies that own and control the current version of the world wide web or Web 2.0. Tech giants such as Google, Meta (Facebook), Reddit etc hold a huge monopoly on the data being generated by their users. Monopoly means that they alone are responsible for processing, storage and curation of users’ content and personal information.
If you study the history of the internet you will discover that the world wide web began as Web 1.0 and back then, it was regarded more as a vehicle to democratize access and distribution of information, but there were no great ways for people to communicate on a peer to peer basis.
Starting around the mid-2000s, web 2.0 came into being through platforms such as Amazon, Google, Facebook etc which originated from the need to bring order to the Internet by making it easy to connect and transact online.
However, while the current social networks offer new opportunities for interaction and communication, there are growing concerns over privacy issues. These privacy concerns are not misplaced when considering the amount of data generated by millions of users on these platforms daily.
Data security has become a key point of focus given that data has become a valuable asset that can easily be converted into a lucrative revenue stream by its holder.
One of the grave risks for most users is not from other users but the owners and curators of the platforms themselves. Almost all existing popular social media platforms employ algorithms that track, log and model users’ activities in one way or another. These platforms then sell the aggregated information to advertisers and other interested parties that may be interested in exploiting that data for various uses.
For example, Meta (Facebook) has access to a lot of user data through its Facebook platform, Instagram and Whatsapp. This is a huge responsibility, and it is a responsibility that Facebook has failed to handle well in the past. Remember the explosive Cambridge Analytica episode.
Another social media giant, TikTok, has also been criticized in the past for collecting a huge amount of data from its users including; content consumed and user location. In the past, some TikTok users have raised concerns over the way the popular platform collects their data amid revelations that the app was even going to the extreme extent of collecting copy-and-paste clipboards of users. With web 2.0 the popular saying has been proven true that “If you are not paying for it, then you are the product!
Web 3.0, revolutionizing every aspect of our daily life
Web3 is introducing revolutionary and innovative means that will wrestle power and control from social giants and put it at the disposal of the user.
The major drawcard of Web3 has been that of decentralization which is also the cornerstone of cryptocurrencies.Web3 is being built using blockchain technology on which disruptive cryptocurrencies such as Bitcoin have been built. Building web3’s social networks, search engines and marketplaces on the blockchain will ensure that control and ownership of user data will be handed to ordinary individuals. This is way different from the current setup where users are at the mercy of platform owners.
Another major advantage of Web3 for the users is that it does not require permission, this means that there is no authority to dictate who uses what services. There is also no need for trust, thereby eliminating the need for an intermediary to facilitate virtual transactions between two or more parties. At its best, Web3 protects user privacy better as well, because as history has taught us, it is usually these authorities and intermediaries that do the most data collection.
One element of Web3 that has been gaining a lot of traction is decentralized finance (DeFi) which involves conducting online financial transactions on the blockchain without assistance from banks or the government.
Apart from DeFi, Other innovations such as NFTs, digital assets and other related entities are going to be crucial to Web3. For example, the Web3 movement has also been largely popularized by the rise of NFTs (non-fungible tokens) which are digital collectibles and other online files that can be bought and sold using cryptocurrencies. NFTs have become an important cornerstone in the construction of the metaverse which is a digital 3D universe where users can access games, socialize, trade assets etc built on the Blockchain. NFT will enable users to gain access to these digital worlds that are currently being created by various projects including Facebook (Meta) and recently Walmart.
Twitter has also set out to make a decentralized standard for social media through its Blue Sky project that has been in the works since 2020. This means that Web2.0 platforms are starting to build products and services that fit within the web 3.0
Interoperability is also another major selling point for Web3 applications as they are being built on public blockchains. Just as the metaverse is being designed, different Web3 platforms can be pieced together to make one fluid space where one’s identity can remain the same across all platforms without the need to make an account across different platforms.
And then we cannot also forget to mention DAOs (decentralized autonomous organizations) which are an improved version of the traditional corporate organizations. DAOs are tokenized and turn the idea of companies and organizations on its head, offering real, liquid, and equitable ownership to larger portions of stakeholders and aligning goals and incentives in new and interesting ways. Recently, a group of crypto enthusiasts organizing themselves under the name ConstitutionDAO came close to purchasing a copy of the United States Constitution using cryptocurrency.
Benefits of Web3 over Web2
Control and Ownership – The current social platforms own user data and have the power to de-platform users at will. For example, Twitter can censor any account or tweet on its platform and a case in point is how an ex-US president, Donald Trump was regularly censored and eventually permanently banned from the platform. If this has happened in Web3 the outcome would have been different as the tweets would be uncensorable because control is decentralized and content creators own their content.
Distributed and Decentralized – In Web 2.0 a payment service such as a bank or PayPal may decide to not allow payments for certain types of work or individuals in certain geographical locations (people from countries under US sanctions) in contrast to Web3 payment apps such as metamask which do not require to collect personal data and cannot prevent payments
Safe and secure Networks – Servers for gig-economy apps could go down and affect users’ income but Web3 servers cannot go down as they are based on a decentralized network of 1000s of computers as their backend.
Web3 is still a very new space, and there is a lot of noise and speculation around it, and its potential to have a positive impact on the existing systems. There has also been a bit of doubt about Web3’s prospects from top tech brains in the industry such as Elon Musk and Jack Dorsey among others.
However, many experts including central bank governors and hedge fund managers doubted Bitcoin and the whole concept of cryptocurrencies when they were introduced but time has proved them wrong!
Technology has always been about freedom and the decentralization of skills and power. Consumer software and hardware rapidly catches up to professional-grade tools — edit bays, recording studios and printing presses now compete against software freely available online. This evolution has forced the traditional gatekeepers to either adapt or shut down completely. Essentially, Web3 is just the natural progression of this evolution.
Web3 is being built on blockchain technology which is a solid foundation because of its characteristics. As an investor and player in the digital world, understanding how to take advantage of this technology and generate consistent income from it is a bonus.
If you’re a content creator who wants to achieve financial independence by doing what you love, web 3.0 can help you achieve this goal because it presents ways to monetize and control your content. All you need is a bit of knowledge of the pillars that are going to support Web3 such as NFTs, cryptocurrencies,dApps, DAOs etc.
If you are a potential investor, this is the best time to consider looking and analyzing projects that are building Web3 platforms and dApps. Projects such as Polkadot, Kusama, Zcash, Helium etc have already had a headstart in the Web 3.0 race and are worth taking a look at.
Blockchain technology is giving back content creators control over their creations like never before. This could herald a golden age of content creation, where artists are paid well, platform users are intimately connected and creativity gets the respect it deserves.