If you are a frequent Twitter user or just have regular access to the internet, you must have recently heard/seen the buzzword “Web3”.
Most crypto users are Web3 enthusiasts, and they believe it will change the internet as we know it. But, on the other hand, a large part of the world population still doesn’t know how crypto and blockchain works, hence their confusion and skepticism at Web3.
The top question noobs ask is: Is Web3 just jargon, the latest buzzword among crypto users and people who trade NFTs of pixelated images and cartoon apes for hundreds of thousands of dollars? Or does Web3 represent a version of the internet that we, as current users of Web2, ought to know about?
The answers to these questions and more are below. This article focuses on what Web3 is all about, how it works and why it’s important.
What is Web3?
Web3 is a new generation of the internet that runs on public blockchains. Blockchain is a record-keeping technology that is spread out on a network of nodes. Blockchain’s main superpower is that it allows decentralization; power deconcentration in data networks.
Because of this feature, Web3’s central idea and promise are that it will make the internet decentralized.
This means that users can own pieces of the internet they use without the need for centralized authorities like Facebook and Twitter to allow access, govern and own user data or demand fees for premium services.
The term was coined by Ethereum co-founder and Polygon founder Gavin Wood in 2014. It is very different from the Web 3 version conceptualized by Tim Berners-Lee in 1999.
Web3 became more popular in 2021, especially by the end of the year largely due to investments from high-profile companies and growing interest from cryptocurrency enthusiasts.
To better understand Web3, let’s look at the previous versions of the internet.
Before Web3 came into the limelight, there were two different iterations of the internet; Web 1.0 and Web 2.0.
In Web 1.0, most websites were static, meaning users could only read content on the page.
Web 1.0 existed from 1991 to 2004.
Web 2.0 came soon afterward and is the version of the internet we all know and use today.
Web2 is a form of the internet that allows usability, and interoperability of platforms like social media, blogs, wikis, etc., for users to create, upload and interact with content.
Web 2.0’s timeline is generally considered to have begun around 2004 (with the start of Facebook) and continues to the current day.
But then, with the emergence of blockchain and decentralization, a major paradigm shift of the Internet, Web3, is coming out.
How does Web3 work?
Web3 is built on top of crypto blockchains like Bitcoin and Ethereum.
Based on who you ask, specific versions of Web3 differ, but it revolves around blockchain technologies such as DAOs, cryptocurrencies, NFTs, and the recently popularized metaverse.
Web3 enabled by blockchain changes how we interact with/on the internet. Unlike centralized networks, users experience true peer-to-peer connections as Web3 distributes data across all participating network nodes. This mechanism makes it much harder to hack an application and censor content.
Secondly, all transactions are on-chain (recorded on the blockchain), making Web3 networks more transparent and stopping fraudulent behaviors.
Web3 does this with the help of smart contracts, computer protocols that store, verifies, and enforce established terms of agreements without third parties. A good example of Web3 protocols that use smart contracts is Decentralized Applications (Dapps).
Apart from smart contracts, another feature of dapps is native tokens. Dapps create and launch their utility tokens which give users governance rights.
By holding a dapp’s native token, users can submit and vote on proposals in the network, giving dapps a democratic approach.
Why should I care about Web3?
Although Web2 has been around for a while and still serves our needs, Web3 enthusiasts believe the network is full of inefficiencies that Web3 can improve upon. A good example is the popular social networks and sites we use.
They are owned by large corporations which obey regulations set by governments. Typically, someone pays to install servers, sets up software that grants users access. They then either charge the users (us) or let us use it for free at the cost of obeying their rules and harvesting our data.
This all changes with Web3.
In Web3, users have access to the same social network services and more without fear of their data being used or sold off without their permission. With the help of blockchain technology, they get more freedom, decentralization, and privacy.
Web3 is already in implementation with blockchains like Ethereum.
But irrespective of its recent popularity, it is still a work in progress…
The evolution of the phenomenon is highly dependent on blockchain’s adoption. The roadmap is still early, but adoption could increase once users worldwide become aware of the need for trust within the web and start demanding it themselves.
Only then can Web3 become mainstream.