What is Web3?

Introduction

The internet has evolved since it's earliest days in the 1990's from basic read-only websites to an internet driven by user-generated contents on media platforms built by centrally-own companies. However, even with the impressive transformation, a new argument arose — user data privacy and control. These platforms, currently depended upon for communication, connections and transactions have been reported to collect and aggregate user data, influencing advertisement and consolidating authority. What if there existed a method to restore the internets vision of openness, transparency and empowering users? Thus enters Web3!

The era of the internet that leverages technology, decentralized networks and digital currencies. Web3 signifies a change in how we engage with the world by placing users at the forefront and ushering in an era of peer-to-peer (P2P) interactions, decentralized applications (DApps) and community-driven advancements.

Web1 vs. Web2 vs. Web3

1... 2... 3. If there's a 3rd iteration of something, it stands to reason that there is a 1st & 2nd version of that thing. That brings us into the short differentiation between the three eras of the internet as of today: Web1, Web2 & Web3.

Internet eras

Web1 (the "read" web) is the internet as we knew it in it's earliest stage between 1990 to 2004. It was marked by websites that offered one way communication, primarily serving as a platform for users to access information without interaction. Web1 relied on basic programming using HTML, CSS and JavaScript for its creation, resulting in websites with simple features and design. Users had limited control over content, and there was no provision for user-generated material. Web1 simply provided information, lacked opportunities for engagement or feedback, operating as a unilateral broadcast where creators pushed web-pages/information to users without interactive capabilities from the user's end.

Web2 (the "read/write" web) came to be in the mid-2000's. It is characterized by the proliferation of e-commerce and social media platforms allowing participants to interact with each other, read & write content and grow a virtual community of interested users alike. The advancement of the internet from Web1 to Web2 has been possible because of the creation of media gaints like Facebook/Meta, Twitter (now X), Instagram and Google amongst others. These companies essentially provided (and still provides) free platforms for internet users to interact on freely. However, based on recent knowledge regarding how big media companies profit from user data and it's well known relationship with targeted advertising/marketing campaigns, a debate on user data privacy has been sparked globally on why there's a need to advance into a new internet era — Web3.

As already highlighted, the need for a new era of the internet was born out of the necessity for internet users to take control of their data and privacy. Web3, a new budding phase of the internet (from 2020 onwards) focuses on empowering users with control over their data and digital identity, achieving this through emphasis on decentralization and use of blockchain technology. Commonly called the "Decentralized web", it introduces a read/write/own internet era where users no longer have to rely on platforms owned by big media ompanies which are often centralized, but rather forge ahead with decentralized networks built with blockchain technology and accessible using a crypto wallet. These networks typically have features like peer-to-peer (P2P) transactions, decentralized finance (DeFi), decentralized applications (DApps), and even social media elements, allowing users to interact freely. Web3 strives to enhance privacy, security and transparency. Utilizing cryptocurrencies, it incentivizes networks while promoting user autonomy. Platforms under Web3 are community-driven and resistant to censorship. This shift has the potential to transform industries introduce business models and foster a democratic online environment.

Although as the internet advances, elements of all Web eras are intertwined together. Web1 had a basic communication approach which was read-only; Web2 introduced interactivity and permitted user-generated contents but sparked debates on data privacy concerns; whereas Web3 emphasizes decentralization, privacy protection, user empowerment through blockchain technology for a more secure online experience.

The Importance of Blockchain Technology in Web3

Blockchain technology is the single fundamental technology in Web3, enabling decentralization and security on the internet of the new age. It provides a foundation for a censorship-resistant online environment. It's importance can be summarized based on the distinctive features it offers:

Decentralized Structure: The decentralized nature of a blockchain facilitates peer-to-peer interactions, data storage and transactions without relying on any central authority. This design also plays a role in security by providing a tamper- & censorship-resistant platform for network participants.

Transparency: Being a public ledger of transactions, any participant on the network can view, audit and track information, fostering a level of accountability that is lacking in Web2.

Smart Contract capabilities: With smart contract functionalities offered by blockchains like Ethereum, Binance Smart Chain, Cosmos etc, it enables automated transactions that are trustless and devoid of a central party. Smart contracts being built with a pre-defined set of rules ensure a strict following, giving way for the development of decentralized apps (DApps) & decentralized finance (DeFi) in Web3.

The Future of Web3 & it's Influence on Different Industries

Web3 is shaping up to influence different spheres and industries in our everyday life, changing how we engage with services.

Finance

Web3 allows for the development of decentralized finance (DeFi) platforms, facilitating international money transfers at unprecedented speed whilst minimizing the need for middlemen. It offers access to banking services (through peer-to-peer transactions and smart contracts) for people without traditional bank accounts.

Healthcare

The blockchain framework on which it is built upon would enhance data security and compatibility making it easier to exchange health records and medical data while adhering to regulations relevant to protecting patient information.

Governance

Web3 encourages decision-making processes via decentralized organizations (DAOs) empowering individuals and fighting against corruption using transparent voting systems that are immutable and resistant to tampering.

The influence of Web3 expands beyond these highlighted sectors, as its decentralized structure based on blockchain technology can be applied across areas like supply chain management, identity verification and cybersecurity amongst others.

Key Takeaways

• The internet has changed since it's earliest days from Web1 of the 1990's to the incoming Web3 of today.
• Web3 is era of the internet that leverages technology, decentralized networks and digital currencies. It signifies a change in how we engage with the world by placing users at the forefront and ushering in an era of peer-to-peer (P2P) interactions without intermediaries controlling user data.
• Blockchain technology, which is the underlying fundamental structure that Web3 operates on, provides functionalities that can be extended to different fields like Finance, Healthcare, Governance, Supply Chain Management etc, ushering in an internet of openness, transparency and privacy.

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