What is Web3

July 10, 2024
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12 minute read
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What is  Web3

The Internet has come a long way since its inception in the late 1980s and early 1990s. From messaging boards and basic websites in those early days, we have progressed to today's Internet—often called Web2. This current phase of the Internet is highly centralized, with power largely concentrated among a small number of big tech companies that own major platforms and sites. 

However, a new evolution is coming called Web3 that has the potential to transform and decentralize the Internet in profound ways. So, what exactly is Web3, and how will its introduction impact businesses and individuals? Let's explore this emerging idea and understand the web3 meaning in depth.

Understanding Web3 Technology?

Web 3.0 represents the next stage in the evolution of the World Wide Web, the user interface that allows access to documents, applications, and multimedia on the internet.

As Web 3.0 is still in development, there is no universally accepted definition, and even its spelling varies, with firms like Forrester, Gartner, and IDC alternating between "Web3" and "Web 3.0."

However, it is clear that Web 3.0 will focus heavily on decentralized applications and likely leverage blockchain-based technologies. Additionally, it will incorporate machine learning and AI to create a more intelligent and adaptive web.

What Technology Supports Web3?

As per the Web3 meaning, Web3 is built around blockchain and distributed ledger technologies. Blockchain allows for the decentralized storage and verification of data across a network of computers. No single entity controls the blockchain - instead, it is maintained by a distributed network of users. 

One of the most well-known blockchains is the one that powers Bitcoin, the first cryptocurrency. But blockchains can be used for much more than just digital currencies. They enable decentralization by taking applications, databases, and entire systems and distributing them across peer-to-peer networks with no centralized authority.

Some key technologies that enable web3 technology include:

  • Blockchain: As mentioned, blockchain is the foundational technology allowing decentralized data storage, transactions, and applications. Virtualness is one great platform where you can create digital goods. You can also check these Virtualness Features.
  • Cryptocurrencies: Cryptos like Bitcoin and Ethereum power transactions on their respective blockchains and serve as the "fuel" that runs applications in the Web3 ecosystem.
  • Smart contracts: Programmable contracts stored on blockchains that self-execute when conditions are met, allowing decentralized applications to function without centralized oversight.
  • Distributed applications (DApps): Decentralized apps built on technologies like Ethereum that operate across peer-to-peer networks rather than being housed on centralized servers.

How is Web3 Different from Web2?

Centralization vs. Decentralization is the most significant difference between today's Web2 world and the emerging Web3 ecosystem. As mentioned, today's Internet is dominated by a small number of giant corporations that control major platforms, online infrastructure, and data flow. With web3 technology, there is no central point of control—instead, applications and data are distributed on peer-to-peer networks maintained collectively by users.

Some other key ways Web3 blockchain diverges from Web2 include:

  • Ownership of Data: In Web2, users have little ownership or control over their personal data, primarily collected and monetized by platforms. Web3 technology restores data ownership to individuals through mechanisms like self-sovereign identity.
  • Monetization Models: The dominance of advertising on Web2 sites means user attention and data are the main commodities. With tokenized ownership models in Web3, value, and influence are distributed far more widely.
  • Interoperability: Data and assets are primarily siloed in different Web2 platforms, whereas Web3 blockchain uses decentralized standards so that value can flow across applications.
  • Censorship Resistance: As there is no single point of control over censorship in Web3. Content is verified by users' networks rather than private companies.

Real World Examples of Web3 Technology

Web 3.0, or Web3, encompasses a range of real-world applications that leverage decentralized technologies, blockchain, and advanced AI to create new kinds of digital experiences and services. Here are some examples:

1. Decentralized Finance (DeFi)

DeFi platforms enable financial services such as lending, borrowing, and trading without traditional intermediaries like banks. Examples include:

2. Non-Fungible Tokens (NFTs)

NFTs represent unique digital assets, enabling the ownership and trading of digital art, collectibles, and more.

3. Decentralized Autonomous Organizations (DAOs)

DAOs are organizations governed by smart contracts, where decisions are made by member voting.

4. Decentralized Social Networks

Social platforms that prioritize user control over data and content, often through blockchain technology.

5. Decentralized Marketplaces

Platforms where users can buy and sell goods and services directly, without intermediaries.

6. Blockchain-Based Identity Solutions

Systems that provide users with control over their digital identities and personal data.

How Will Web3 Change Our Lives?

In many ways, Web3 promises to change the Internet as we know it today - and by extension, change our lives and interactions online in some significant ways:

1. True Ownership of Online Assets: In web3 technology, you will truly own digital assets like media, online identities, data, and creative works - not just licenses to use them like today. This restores important ownership rights to users. In Web3 blockchain, you will truly own digital assets like media, online identities, data, creative works, digital pass and authenticity certificate - not just licenses to use them like today. This restores important ownership rights to users.

2. New Economies & Markets: With blockchain-based currencies and markets, all kinds of peer-to-peer commerce becomes possible, from the purchase of digital goods to new revenue models for creators.

3. Decentralized Social Media: Platforms like Minds build community ownership and prevent data/content control by any single entity. User identity, privacy, and speech are better protected.

4. New Employment Models: Distributed employers like Anthropic bypass traditional hiring by tapping global developer communities through decentralized recruitment and work distribution.

5. Interoperable Profiles & Histories: Your identity, reputation, and credentials can travel across the decentralized web through open standards rather than being confined to single platforms.

6. New Revenue Models: Like Patreon, Web3 technology allows fans to directly fund creators through tokens and micropayments rather than depending on ads or platform revenue shares.

While these changes won't happen overnight, Web3 blockchain can significantly reshape our interactions and the value/power dynamics online in ways that restore more ownership and liquidity to users. Over time, it may be an evolution rather than a revolution.

Case Studies: What Web3 Means for Companies

As major changes often begin at the fringes before going mainstream, early adopters of Web3 principles are already emerging across industries:

1. Online Gaming: Ubisoft initiated Quartz, a playground for bartering exceptional, blockchain-supported in-game accessories. Gamers indeed own exclusive high-value cosmetics in a noted series like Ghost Recon, re-establishing genuine value to their contribution. This instance illustrates the core of Web3 meaning, as it harnesses technology to return control and profits to users.

2. Social Media: Minds enables users to tokenize reputation and proof-of-engagement to garner crypto returns and partake in revenue with content creators while ensuring no sole party governs data or the congregation. Understanding Web3 in this context highlights its potential to democratize access to monetary benefits and data governance, reflecting a shift towards more equitable models.

3. Creators Economy: Brave Browser's Basic Attention Token remunerates users and publishers based on actual interaction, distributing advertisement income in a manifest, decentralized mode that sidesteps influencer go-betweens. This aligns with the Web3 meaning by showcasing how blockchain can facilitate more transparent and direct economic relationships between content creators and consumers.

4. Digital Content: Endeavors like Graphlin empowers freelance artists, musicians, and influencers to tokenize artistic outputs, membership bonuses, or future profits and issue rare, collectible digital assets to finance their projects and engage audiences. This is a fundamental example of understanding Web3's ability to transform how value and ownership are perceived in the digital realm.

5. Labor Markets: Frameworks like Anthropic offer an open alternative to conventional recruitment. They utilize blockchain to access global developer communities, transparently assess skills, and compensate open source contributions—all without geographical limits.

These precedents display how early entities are capturing the prospects of Web3 technology to restructure old-fashioned models in open, incentives-aligned manners that advantage creators, laborers, and users over centralized intermediaries. Over time, such case studies could motivate mainline disruption across numerous other fields.

The Future of the Internet: Web3 Trends and Innovations

While Web3 technology may seem like distant future thought experiments to some, the innovative activity and pace of development happening in the space indicate how quickly this vision of a new decentralized internet powered by crypto is materializing:

  1. Growth of Developer Communities: Projects like Ethereum and blockchains fuel an explosion of developer interest and billions in funding to build all kinds of decentralized apps and peer-to-peer systems.

  1. Maturation of Cryptoeconomics: New funding models involving tokens, incentives, curation markets, and redistribution are emerging to align the diverse participants needed to sustain common infrastructure in Web3 blockchain.

  1. Emergence of Interoperable Standards: From ETH name service to presence protocols, open initiatives establish ways for web3 identities, histories, and assets to travel across platforms through decentralized standards.

  1. Evolution of Crypto Usage: Virtual worlds like Decentraland prove the viability of entirely crypto-powered economies for gaming and social use cases, suggesting more advanced real-world applications are on the horizon.

  1. Innovation in Scalability Solutions: Projects like Polygon and other ETH 2.0 research continue striving towards the speeds, costs, and carbon footprint needed to scale Web3 applications to billions.

So, while mainstream adoption is still in the distance, innovations unfolding daily across these trends indicate how rapidly the foundations are maturing for Web3 to one day underpin new generations of how we interact with technology, commerce, and one another online. 

FAQs

What is Web3 in simple terms?

Web3 refers to a potential next phase of the Internet that is decentralized, open source, and driven by crypto & blockchain technology rather than dominated by today's big tech companies. It promises to redistribute power from platforms to users through new data ownership, value exchange, and interoperability models.

What is Web3 in real life example?

Gaming platforms like Decentraland, which use crypto for an entirely virtual economy, demonstrate real-world applications already. Others, like Minds, are creating social models where content, reputation, and revenue are owned by users rather than cashed in on by platforms.

Is AI part of Web3?

Not fundamentally, but AI could play an enhancing role - like using machine learning to moderate decentralized discussions while respecting open protocols. The core idea is that no entity "owns" the network and everyone has a financial stake through crypto, restoring transparency and individual motivations that suit an advanced AI era.

Is Web3 the future?

It's impossible to say for certain, but blockchain, as a decentralized, open alternative to today's models has great potential. Much depends on how well innovations solve issues around scalability, ease of use, and real-world integration in a way that aligns with mainstream needs and behaviors over time. Developer interest indicates that it deserves serious consideration.

What are the main benefits of Web3?

Restoring true ownership of data and economic participation to individuals. Realigning network value with user contributions rather than platform profits. Enabling new interoperable, peer-to-peer applications, markets, and public utilities. and keeping next-gen systems transparent, open, and resistant to centralized control through crypto incentives.