All You Need to Know About Web 3.0

2022/06/30 09:03:22

The internet has undergone massive changes since the days of Tim Berners-Lee, the inventor of the World Wide Web. Web 1.0 came in the mid-1990s, ushering in the age of static web pages retrieved from servers. The fascinating features of Web 1.0 were receiving and sending emails and real-time news retrieval.

Web 1.0 users did not have access to interactive applications, and this shortcoming spurred the evolution of the internet into Web 2.0, the current version of the internet. Web 2.0 is highly interactive, a feature that allows users to generate content and avail it to millions of users almost instantaneously.

Despite disrupting the world tremendously, Web 2.0 has its shortcomings. The most notable con is centralization, wherein a small group of companies - Big Tech - control data and content. Examples of such companies include Alphabet (Google), Amazon, Apple, Meta (formerly Facebook), and Microsoft, to name a few.

Looking to address Web 2.0’s shortcomings, Web 3.0 runs on blockchain technology and integrates concepts like decentralization and token-based economics.

What is Web 3.0?

Web 3.0 is the next version of the world wide web. Gavin Wood, the founder of Polkadot and the co-founder of Ethereum, came up with Web 3.0’s concept in 2014. According to Wood, Web 2.0 requires too much trust because users rely on several companies to act in their best interests.

Despite the Web 3.0 concept being around for almost a decade, there isn’t a set definition of what it comprises. However, Web 3.0 is based on fundamentals like decentralization, permissionless, trustless, and native payments.

Decentralization refers to distributing the internet’s ownership to its builders and users. On the other hand, trustless means Web 3.0 will integrate incentives to get users to run the entire ecosystem instead of relying on third parties. The permissionless nature of Web 3.0 means users will have equal chances to participate.

Web 3.0 will also feature native payments in the form of cryptocurrency tokens. This integration will eliminate dependency on the legacy banking system, which is not inclusive and charges high fees.

Through these principles, Web 3.0 seeks to take the internet’s control out of the hands of a few powerful companies and hand it to users.

Why is Web 3.0 Important?

Unlike in Web 2.0, where centralized organizations control ownership, Web 3.0 decentralizes the internet’s ownership. Through tokens, both fungible and non-fungible, users can own fractions of internet services. Non-fungible tokens (NFTs) let users own various items, including virtual property in the metaverse, in-game objects, art, music, and much more.

To better understand online ownership, take the gaming industry as an example. Web 2.0 game developers can delete a user’s account, resulting in the loss of all items the user had collected. If a user stops playing, they lose their in-game items.

However, in Web 3.0, ownership is decentralized. To this end, not even a platform’s developer can shut down user accounts. Moreover, users can sell or trade their in-game objects on open markets once they stop playing the game.

Web 3.0 also changes how we perceive organizations. Through Decentralized Autonomous Organizations (DAOs), many people can own an organization as a collective. The organization issues tokens, similar to how a company issues shares. Token holders can vote on decisions about running the DAO and its future.

Moreover, Web 3.0 streamlines users’ online identities. With everything running on the blockchain, users only need to manage one online identity. In comparison, Web 2.0 users need to update details about their identities every time they sign up for a new platform.

What's the Difference Between Web3.0 and Web 2.0?

Web 3.0 is decentralized, trustless, permissionless, and scalable. These features stem from the blockchain, which uses distributed ledgers to ensure traceability, transparency, and immutability. These features have helped set apart Web 3.0 payments from the legacy financial system.

Decentralization helps eliminate the need for trust in crypto. For instance, the control of Bitcoin’s supply lies in the hands of many people. This helps ensure the network runs according to the desires of its community.

In contrast, the legacy traditional finance system runs on fiat currencies which are issued by governments. However, governments are centralized and can easily print more money, leading to currency devaluation and inflation.

In Web 2.0, banks serve as trusted entities to verify online transactions. However, in Web 3.0, transactions are trustless. Cryptocurrency networks leverage public-key cryptography and consensus mechanisms to verify transactions, thus distributing the process of checking whether the sender is authentic and whether the currency is valid to many people.

The permissionless nature of public blockchains allows Web 3.0 users to access financial services without permission from a central authority. This trait helps simplify access to financial services, especially among the unbanked and underserved.

The Future of Web 3.0

Although the term Web 3.0 dates as far back as 2014, the concept is in its initial development stages. Many Web 3.0 ideas are still unknown to most people. However, this has not stopped developers from pushing ahead at full steam.

Web 3.0 could usher in more personalized human-like experiences with machines, simplifying users’ daily lives. Companies in industries like journalism, electronics, and fast-moving consumer goods Web 3.0 could introduce a higher level of interaction with target customers.

Closing Thoughts

Although Web 3.0 is only in the initial development stages, its potential to disrupt the world is significant. By enhancing the perks of Web 2.0 and eliminating its shortcomings, Web 3.0 promises to bring power to the users enabling them to profit from the content they create.

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