A new internet called Web3 is expected to address problems with the current Web, like the concentration of power in the hands of a few centralized social media platforms and the exploitation of users’ personal data. Digital assets can become an integral part of Web3. Blockchains’ permission-less and decentralized nature plays a key role in dispersing communication power rather than giving it to centralized authority.
While bringing native digital payments to Web3, digital assets can also serve as tokens that are designed to perform a variety of functions in digital economic systems. Web3 could become more community-focused thanks to blockchain and cryptocurrencies thanks to decentralized autonomous organization (DAOs).
Difference between Web3 and Web2?
The three qualitatively distinct phases known as Web1, Web2, and Web3 are frequently used to represent the major internet evolutionary steps. Users were unable to alter online data or add their own material to the websites they were visiting during the Web1 period. Back then, the internet was made up of static HTML pages that allowed for simple, one-way interactions, like browsing discussion forums.
Web2 enabled easy interaction and content consumption. Then, Web2, a more dynamic internet where users were more involved in creating their own content, gradually arose. Web2 witnessed the emergence of new kinds of centralized tech giants since these forms of online connection were primarily made possible by social media platforms.
More of its flaws are being brought to light, and the existing Web2 ecosystem is evolving once again. For instance, concerns over censorship and data ownership, tracking, and ownership have increased among internet users.
The might of centralized companies became especially evident when they started using it to block specific users and organizations from their platforms. Web2 companies also use the information to develop targeted advertisements for third parties and to keep people on their websites. Such financial incentives may lead these businesses to act against the interests of their customers.
Web3 aims to move the internet one step forward. One of its key promises is to make online systems decentralized, reliable, and permission-less. It might also lead to digital ownership, payments that are made exclusively online, and censorship resistance as a new standard for Web goods and services.
Blockchain and cryptocurrencies are well-positioned to become important Web3 technologies because of their inherent decentralization, which allows anyone to store information on-chain, tokenize assets, and create digital identities.
How blockchain & crypto fit into the Web3 ethos?
Decentralization
As was already said, one of the main issues with Web2 is the concentration of data and power in the hands of a small number of significant players. Blockchain and cryptocurrencies enable a more equitable distribution of information and power, which can decentralize Web3. Public distributed ledgers powered by blockchain could be used by Web3 to promote greater decentralization and transparency.
Permission-less
Blockchain-based initiatives replace publicly available code for traditional businesses’ proprietary systems. The blockchain applications’ permission-less design makes it possible for anybody in the world to access and use them without limitations.
Trustless-ness
Blockchain and cryptocurrency do deal with the need to trust any middlemen, be they banks or private individuals. Users of Web3 can conduct transactions without having to rely on any other parties besides the network itself.
Payment rails
Cryptocurrencies may act as the Web3’s native digital payments system. Due to their true borderless-ness and lack of intermediaries, digital assets have the potential to enhance the costly and burdensome Web2 payment infrastructure.
Ownership
Self-custodial crypto wallets, which let users keep their money without the assistance of middlemen, are just one of the instruments available in cryptocurrency. In order to use their funds in various ways or to display their digital goods, users can also connect their wallets to decentralized apps. Using a public ledger that is open to the public, anyone can confirm who owns these funds and items.
Censorship resistance
Because they are censorship-resistant, blockchains prevent any party from unilaterally changing the transaction history. It is nearly hard to remove a record from the blockchain after it has been added. This function might protect many forms of expression against corporate and governmental censorship.
Is blockchain & crypto essential for Web3?
It’s feasible that Web3 will make use of technology unrelated to cryptocurrency or blockchain. For instance, the internet of things (IoT), augmented reality (AR), virtual reality (VR), and the metaverse may all be important components of the next internet era. Even while the blockchain may focus more on the infrastructure side of Web3, these technologies and solutions could help make the internet more immersive and connected to the outside world.
While AR and VR could create computer-generated environments populated with objects that were represented as digital assets, IoT could connect multiple devices together through the internet. Finally, Web3 may really create a single metaverse by scaling and combining these technologies.
Digital-native payment rails and much more could be offered by cryptocurrencies. The use cases that utility tokens can open up are crucial for Web3. Additionally, non-fungible tokens (NFTs) could support digital identity and ownership verification in a method that doesn’t compromise users’ sovereignty over their personal data.
How will Web3 with crypto & blockchain look like?
Users might not even be aware that blockchain technology is one of the pillars of Web 3. People won’t give the underlying infrastructure a second thought if the blockchain-based applications are simple to use and understand, much as we hardly ever think about the data servers and internet protocols that underpin the social media platforms we use on a daily basis.
NFTs may give users the ability to show other users their digital collectibles and support the development and upkeep of their individual digital identities. They might also be used for various practical functions, like supporting a lot of crucial procedures in online gaming.
Through decentralized autonomous organizations, blockchain and cryptocurrencies can change how Web3 users coordinate and enforce collective action (DAOs). Without a centralized authority for making decisions, DAOs enable people to band together around a common interest. Instead, token owners cast votes to decide on the best course of action as a group. Additionally, a blockchain makes the activity and votes accessible. DAOs can thereby promote Web3’s decentralization, transparency, and community-focused nature.
End Notes
The major issues with today’s internet could be resolved by Web3 while limiting the influence of the tech behemoths. In contrast to factual reality, it is still mostly an aspirational vision. Nevertheless, the technologies that will presumably support the following version of the Web are already under development.
Because they are built to enable decentralized, permission-less, and trustless interactions, blockchain and cryptocurrency are frequently regarded as two of the technologies most likely to usher in the Web3 revolution. Additionally, blockchain technology and digital assets do not compete with other important Web elements like augmented reality, virtual reality, and the internet of things because they are more likely to produce the most promising results when integrated.
