What is Web3? Here’s a detailed explanation

In the early 2000s, things started to change. Firstly, the internet was becoming more interactive; it was an era of user-generated content or the read/write web. Social media was a key feature of Web2. Facebook and Twitter came to the forefront and defined the experience of being online. YouTube, Wikipedia, and Google, along with the ability to comment on content, expanded our ability to watch, learn, search, and communicate. Web 2 also birthed the advertising-driven revenue model. While users could create content, they didn’t own it or benefit from its monetization.

A key feature of this era, is centralization. Economies of scale and network effects led to clear winners. Further, Web2 created new ways for regular people to make money, such as through the sharing economy and the alluring job of being an influencer.

However, as Web2 grew, it left people wondering what’s next and whether there’s a better future out there, thus, paving the way for Web3.

Web3: Read-Write-Own

The advocates of this newest technology are pitching it as a roots-deep update that will correct the problems and perverse incentives of Web2.

The premise of ‘Web 3.0’ was coined by Ethereum co-founder Gavin Wood shortly after Ethereum launched in 2014. Gavin put into words a solution to a problem that many early crypto adopters felt, i.e., the Web required too much trust. That is, most of the Web that people know and use today relies on trusting a handful of private companies to act in the public’s best interests.

Currently, Web3 is work-in-progress and isn’t exactly defined yet. It relies on the fact that it will be decentralized – rather than controlled by governments and corporations.

At its core, Web3 uses blockchains, cryptocurrencies, and NFTs to give power back to the users in the form of ownership.

Below are some of the few core principles of Web3:

• Permissionless: Here everyone has equal access to participate in Web3.
• Decentralized: Instead of the internet being owned, controlled, and governed by a few centralized entities, ownership gets distributed amongst its developers and users.
• Native payments: Web3 makes use of cryptos for spending and sending money online instead of relying on conventional methods and processors of payments.
• Trustless: Web3 works by making use of incentives and economic mechanisms instead of relying on trusted third parties.

Know the key applications of Web3.0

With blockchain as its base, Web 3.0 makes it possible for an exciting new range of new apps and services, such as:

• Cryptocurrency: A new-age and innovative digital currency which is distinct from fiat cash. For example, Bitcoin, Ethereum, Cardano, etc.
• Non-Fungible Tokens: Popularly known as NFTs, these are digital art collectibles and are kept in a blockchain with a cryptographic hash.
• Decentralized applications: Also known as dApps, these are programmes that are logged in an immutable ledger. They are built on top of the blockchain and use smart contracts to facilitate service delivery.
• Decentralized finance: Popularly known as DeFi, this newest technology is a new use case for Web 3.0 that allows for the provision of financial services beyond the constraints of conventional centralized banking infrastructure.
• Decentralized Autonomous Organization: Popularized through cryptocurrency enthusiasts and blockchain technology, DAOs are used to make decisions in a bottom-up management approach and offer decentralized governance.