The rapid advancement of crypto and blockchain technology has driven the development of Web3, often referred to as “the future of the internet.” Although concepts like Web3 have been around for a while, we’ve only recently seen their practical applications through various crypto projects. So, what is Web 3.0? Why is it important, and how can we benefit from it? This article will explain Web3 in detail.

Article Summary

🌐 Web3 is the third generation of the internet where users and applications are connected within a decentralized ecosystem. In this ecosystem, user interactions rely on computer algorithms without the need for third-party intermediaries (trustless) and do not require permission from specific authorities (permissionless), thus ensuring user data security.

 💻 What distinguishes Web3 from previous internet eras is that Web3 grants full authority to the individuals using it. Unlike the current internet era or Web 2.0, which is predominantly run by large corporations like Google and Facebook, Web3 enhances user involvement by allowing ownership of certain parts of the internet.

 🔍 The characteristics of Web3 include being trustless and permissionless, self-governance, and data ownership. These four characteristics play a crucial role in creating a secure decentralized ecosystem. They also represent Web3’s solutions to various problems we face in Web 2.0.

What is Web 3.0?

Web 3.0 is the third generation of the internet where users and applications are connected within a decentralized ecosystem. The Web3 concept focuses on a trustless and permissionless internet ecosystem. In this ecosystem, user interactions rely on computer algorithms without needing third-party intermediaries (trustless) and do not require permission from specific authorities (permissionless), thus ensuring user data security.

The vision of Web 3.0 (or Web3) is to create a distributed and free internet network without a single entity controlling the network. Additionally, through crypto assets and blockchain technology, Web3 also encourages users to participate in the management and ownership of the network.

Of course, the concept of Web 3.0 itself did not appear overnight; it is part of the evolution of the internet and technology. The first person to mention the concept of Web 3.0 was Gavin Wood, one of the co-founders of Ethereum. Gavin stated that the principle behind Web 3.0 is “less trust, more truth.” This principle refers to Web 3.0’s goal of removing control of the internet from large corporations like Google and Amazon and returning it to the users.

The concept of Web 3.0 might still sound abstract and hard to understand. Therefore, to understand why Web 3.0 is important and why we need it, we need to look at its developmental history.

Evolution of the Internet and Web3.0

A brief description that explains the differences between the three phases of the internet.
Source: CryptoStars

Web 1.0 (1990-2004)

Interaction on Web 1.0 is one-way. Source: Ethereum

The concept of the internet initially emerged as a U.S. government project named ARPANET, or Advanced Research Projects Agency Network, in 1968. It was a small network connecting government agencies and professors at universities like MIT. However, the concept of the World Wide Web was introduced by computer scientist Tim Berners-Lee. Tim aimed to create a protocol allowing the transfer of information from all over the world. As we know, this only became possible a decade later.

Web 1.0 was an internet network consisting of information and content created by a few companies that could be accessed by users. The term ‘access’ might still be debated because the interactions available to internet users were very limited. Web 1.0 was still rigid, static, and featured read-only interactions. Most users during this era could only use the internet to read and search for information.

Nevertheless, Web 1.0 laid the important foundation for the next era of the internet.

Web 2.0 (2004-present)

Web 2.0 is the internet era that emerged with the advent of social media. Facebook and Myspace were the first social media platforms to kick off the era of social interaction among users. Google, Napster, and YouTube then developed the concept of providing, sharing, and searching for information on their platforms. Web 2.0 created various platforms where all users could read, provide, and share information quickly and accessibly.

This era facilitated read and write interactions where users could provide feedback. This era gave rise to new jobs and industries based on the internet, such as digital media, digital marketplaces, and the influencer profession.

However, Web 2.0 also created new problems. Despite the internet offering millions of sites providing information, most people only use a few of the same sites. According to Semrush, traffic from Google, Amazon, YouTube, and Facebook exceeds that of the combined sites ranked 5-20. Our internet is centralized on a few companies that monopolize content and information access on the internet.

Global internet data traffic in May 2022. Source: Semrush

Basically, we use platforms like Google, which have rights over our personal data. This becomes problematic when there are frequent cases of personal data being leaked, stolen, and hacked for criminal purposes. Additionally, platforms like Twitter have full control to block and remove content unilaterally.

This issue is exacerbated by the monetization of personal data for company (advertising) interests without user consent. Twitter, Facebook, and YouTube also have prerogatives over the content we create on their sites.

Web 3.0

Web3 network interactions are peer-to-peer or user-to-user. Source: Ethereum

In 2008, Satoshi Nakamoto created a whitepaper on Bitcoin, an alternative payment system based on cryptographic code and blockchain technology. Bitcoin enabled the creation of a decentralized payment system. Then, Vitalik Buterin and other Ethereum founders developed technology that became the foundation of Web 3.0: smart contracts. Bitcoin and blockchain enable decentralized transactions, and smart contracts create interconnected decentralized networks.

Blockchain technology and cryptography are transforming interactions between users and service-providing platforms. In the Web 2.0 era, platform providers are responsible for being third parties storing users’ personal data and funds. In the Web 3.0 ecosystem, we don’t need to trust platforms to secure our data and funds because everything is governed by algorithms and smart contract programs.

Blockchain technology stores and manages all data storage processes secretly yet transparently. Cryptocurrency cryptography facilitates the security of the funds we receive and send. Everyone can transact directly with each other without third parties allowing and storing users’ personal data.

Moreover, users are not just consumers and creators on the internet but can also participate in its management. Additionally, applications on the Web3 network do not control their users and do not interact hierarchically.

The Web3 era creates a read-write-own interaction cycle because users have ownership of assets on the Web3 network. Therefore, holding crypto assets is not only an investment but also a sign of rights to the governance and management of those assets and platforms. This creates a more equitable relationship between users and platforms.

Characteristics of Web 3.0

Trustless and Permissionless

As explained, the main characteristics of the Web3 internet era are trustless and permissionless. For most people, the impact of these two principles might not be immediately apparent. The developments brought by Web3 mostly happen behind the scenes, at the programming and code levels of each application.

The first thing users will notice when using Web3 applications is the use of crypto assets as currency in transactions. Web3 applications are interconnected, and users can simply move their assets to perform transactions. Most Web3 platforms have interoperability with other platforms.

Self-governance

The Web 3.0 internet era is marked by the concept of self-governance, where various platforms and applications implement DAO systems. The DAO system allows users to participate in determining platform policies. This self-governance model is an effort by various Web3 platforms to decentralize and move away from the centralization model used by Amazon, Google, and other Web2.0 companies.

Data Ownership

An important characteristic of the Web3 era is data ownership. The Web 2.0 era was characterized by large companies monopolizing users’ personal data without control to protect it. Data was even treated as a commodity and ‘traded’ for advertising purposes.

Blockchain technology and crypto assets enable anonymity during transactions by hiding users’ personal data behind encryption that can only be read by computers. This means Web3 platforms and companies do not have access to users’ personal data.

All the characteristics of Web3 mentioned above are efforts to protect users and support a more democratic and open internet ecosystem.

Why is Web 3.0 Important?

The difference in content consumption among the three internet generations. Source: Chainlink

🏡 Ownership: The Web3 ecosystem ensures that everyone participating has ownership of various assets. All assets, data, and works within Web3 platforms are fully controlled by their creators. This is possible due to the use of decentralized blockchain technology and crypto assets. 

🌐 Openness: Web3 applications and platforms use open-source programming languages and application codes, allowing anyone to use them. Additionally, Web3 applications do not control or restrict user access. 

💵 Payment Systems: The Web3 internet economy operates on crypto asset systems. Crypto assets provide an alternative financial system based on blockchain and cryptography. This makes transactions through cryptocurrencies decentralized, not controlled by third parties, and secure. 

🕵️‍♂️ Control Over Personal Data: Unlike the Web 2.0 era, Web3 does not monetize users’ personal data. Platforms and applications do not know or store users’ personal data.

Drawbacks and Limitations of Web3

Education and Understanding

The Web3 internet era brings many changes and different principles that are not recognized by many users. Similar to the transition from Web 1.0 to 2.0, this transition will take time. Web3 introduces various principles, technologies, and interaction models that are very different from the internet we know today. Society needs time to process and understand these differences. Additionally, as with the early days of the internet, there is skepticism and criticism from experts about this new technology era, which is entirely normal. Therefore, Web3 proponents and pioneers like Ethereum and the Web3 Foundation are intensifying education about the new internet era.

User Experience

Most Web3 platforms and applications are still difficult for many people to use. The barriers to using these applications remain high as users need to understand many technical terms. In the transaction process, users must grasp various concepts to avoid scams and other criminal activities. This prevents many Web3 platforms from being widely used.

Infrastructure

The Web3 ecosystem is still in its early stages. Many developments in various aspects could alter its direction and technology. Currently, many Web3 platforms and applications still use centralized Web 2.0 infrastructure (Google, AWS, Twitter, Discord). However, we know that many new Web3 projects are working to fill this infrastructure gap, such as Chainlink. The process of integrating reliable and secure infrastructure will take a long time. This remains a weakness of Web3 often criticized by many experts.

Participation

The Web 3.0 era focuses on the concept of decentralization where users play a crucial role in participation. However, we need to question how many people are willing and able to actively participate in helping the development of platforms. Besides needing a deep understanding of the platform, participating users must invest time and effort into the platforms they use. This is a unique aspect that can also be a barrier because not everyone can or wants to allocate time for participation. Lack of participation can hinder platform development.

Examples of Web 3.0 Platforms in the Crypto World

Some Web3 projects in the crypto world. Source: Decentralized Finance

The impact of Web3 on the cryptocurrency and blockchain world is significant. These three elements are closely related because crypto assets and blockchain can be the foundation of Web3 development, and Web3 can enhance the adoption of crypto assets in the long run. In fact, there are already various protocols and platforms in the cryptocurrency industry that can be categorized as part of the Web3 era. Some of these protocols exhibit the Web3 characteristics mentioned earlier.

🌊 Ocean Protocol: OCEAN Protocol is a blockchain network that allows businesses and individuals to exchange and monetize data. Ocean Protocol provides dataset tokenization services where data is converted into tokens called ‘datatokens’ and stored on the blockchain. Ocean Protocol is one of the Web3 platforms with the potential to create a new data marketplace where researchers, businesses, and organizations have ownership and can trade data. 

⛓️ Chainlink: Chainlink is a decentralized blockchain oracle network that allows smart contracts to securely communicate with real-world data and services outside the blockchain network. The Chainlink network is an important infrastructure project as it bridges the gap between Web 2.0 data and Web3. Chainlink facilitates various Web 2.0 services and applications to begin transitioning to Web3. 

⚛️ Helium Network: Helium Network is a blockchain network providing decentralized hotspot services. The Helium blockchain has the world’s largest LoRaWAN network (internet service network similar to WiFi) and offers incentives for hotspots in the form of HNT payments. Users can earn Helium tokens (HNT) by providing hotspots for their surrounding areas. Helium now supports 5G networks. Helium is a Web3 protocol working to provide an alternative decentralized internet service using blockchain technology.

Final Thoughts

Web3 is still in its early stages, but its potential to revolutionize digital ownership, finance, and privacy is undeniable.

🚀 As blockchain infrastructure improves, Web3 will likely become the default internet model, offering a more equitable, decentralized, and transparent web experience.

Learn more knowledge of crypto through various articles on Safubit Academy. All articles on Safubit Academy are created for educational and informational purposes only and are not intended as financial advice.

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