What is Web3?
Web3 is a still-developing idea for a third generation of the web. It follows Web 1.0, with its reliance on traditional web pages filled with content produced by commercial entities, and Web 2.0’s shift towards the introduction and growth of social media. Although Web 2.0 undoubtedly gave the average person more ability to produce, and even profit from, their own content on the web, any such plans still required the involvement of a Big Tech company such as YouTube (owned by Google), Facebook , Twitter, or any of the major social networks that influencers — and individuals — rely on to reach their audiences.
Web3’s proponents claim their vision for the internet can cut the Big Tech middlemen out of the picture by completely decentralizing the web in much the same way cryptocurrency is attempting to wrest control of world finance from large financial institutions and governments. The similarities don’t end there. Web3 is also designed, like cryptocurrency, to largely revolve around blockchain technology .
Where this tech is used in crypto to create and maintain a decentralized digital currency, it would be used by the Web3 infrastructure to produce individualized tokens for each user, asset, and trackable item across its entire expanse. The goal of this is to provide a singular, consistent, platform-agnostic way to manage data across all systems, without the need for a corporation with its own interests and agendas getting involved.
If you’re curious, the term itself is largely believed to have been coined by Gavin Wood, creator of the Ethereum cryptocurrency and founder of the Web3 Foundation . The moniker has been around for several years, particularly if you count mentions of ‘Web 3.0’, but it was really only in 2021 when it started gaining traction, largely due to the high-profile names that suddenly seemed interested in its success or failure. We’ll talk more about them below.
What are its possible benefits?
The primary benefit of this idea is that it would give control of a user’s data back to that user. Web3’s backers see us as currently being at the mercy of major online power brokers like Twitter, Google, and anyone else that collates, catalogues, and exploits our data for their own purposes and profits. Anyone that’s ever been served a creepily well-targeted ad should be familiar with that sinking feeling that makes everyone wonder just how much the companies they interact with online — and even the ones they don’t — know about us.
Web3 promises to reduce this worry by placing the control of your data and all of your created and owned digital assets firmly back in your own grasp. It will do this by assigning you, and all of those assets, unique digital tokens that can be tracked across the entire internet by Web3’s fundamental infrastructure. This would function, once again, in much the same way that the central ledgers that make cryptocurrency possible track each bitcoin, ether, or dogecoin across the globe as they pass from owner to owner.
Unlike the current web, that ledger would be controlled by all and available to all, while still maintaining each user’s personal privacy. This last point is of paramount importance, as it would mean the other people you interact with online would be able to leverage that central ledger to verify the authenticity of you and your assets, without them being able to access any of your data or assets without proper authorization.
What sort of risks and pitfalls does it include?
Let’s be clear about something; we’re talking about a proposed revamp of literally the entire internet here . The single thing that has, arguably, had the most impact on humanity over the past several decades would be getting completely redesigned if Web3’s enthusiasts have their way. As with anything as staggeringly complex as this proposal, the potential pitfalls one could dream up spiral beyond comprehension almost immediately. That said, it’s still important to examine a few of the most likely issues that could arise from a transition to Web3.
Regulation
The current internet is, for good or ill, regulated in various ways in various jurisdictions. Arguments over how good a job the various regulatory bodies are doing aside, they generally exist to protect the web’s users from constantly being subjected to things like hacking, fraud, theft, harassment, the dissemination of child abuse imagery, unfair business practices, and other cybercrimes. Some believe the individualization of all web users provided by Web3’s ideals could balloon all of these malicious activities and spawn entirely new ones. The reason for this fear is the utterly anonymous nature of Web3’s underlying infrastructure. Just as cryptocurrency has been used to support criminal activity by providing an anonymized method of payment that’s beholden to no government or bank, so Web3’s tokenized system could also help criminals remain untraceable by any governmental or law enforcement authorities.
Of course, as with any tool, it’s all about the people that use it. Citizens living under repressive regimes could benefit greatly from the type of anonymity that could also enable any of the aforementioned crimes. The question here, as with so many other human endeavors, is do the potential benefits outweigh the potential costs?
Security
This might seem like a strange worry. After all, if Web3 is so intrinsically related to cryptographic tokens , shouldn’t the general security situation be improved? Indeed, some proponents think it will be. However, it’s extremely important to remember that, ultimately, all online security relies on one very fallible factor: human beings .
The retention of the keys to the tokens that would power Web3 will be, by design, in the hands of each user. Should one of those users be suckered in by a phishing scam , or bamboozled by a malicious mobile app , they could potentially expose themselves to identity theft and fraud just as easily as they can today. If they hand over one of those cryptographic keys, it would be no different — and possibly even worse — than if they divulged a credit card or social security number.
Of course, new methods of verification and authorization could be devised to combat scenarios like this. But, you have to wonder if there’s any real benefit in taking the hackers vs citizens arms race down this path if it just means growing the relative complexity for both sides, without offering any real benefit to the average netizen who’s just out there trying to buy their grandpa a mug.
Innovation
On the surface, decentralization may seem like it could jumpstart innovation. After all, instead of just a few minds at a handful of companies working on a given platform, millions of minds could be bent toward the same problem, all developing their own solutions and paths forward. But, anyone who has ever been forced to work on a team project during their school years should be able to see how quickly this kind of collaborative planning can go spectacularly wrong when just a few more people are involved. Now, imagine that number expanded by six or seven figures.
Web2 vs Web3
Web 2.0 (or read-write Web) revolutionized the world with its ability to provide users with a platform to create and see the content. It gave a new industry for people to earn money from.
Businesses display advertisements on social media, newspapers, and marketplaces, which give creators of both the content and the website income.
As the old saying goes, “There’s no free lunch in this world”. Companies trade your personal information in exchange for their amenities.
These companies are the rule-makers and rulebreakers of this version of the internet. They have a say in what gets on or off the Web.
Twitter removes anything which violates its guidelines, and so do Youtube and Twitch. Web2 is also at risk of internet blackouts. Many people rely on the internet for their livelihoods, Meta and Google have both experienced numerous blackouts in the history of web2.
Web 3.0, on the other hand, runs on the Ethereum network. Web3 includes Dapps or “decentralized apps” which work on the Ethereum blockchain, using ether as currency.
No one person or organization can block or deny you access to any website or domain. Web3 doesn’t require permission. Web 3 is powered by millions of computers acting as a backend.
There is no risk of network loss, which allows users a carefree environment. Although Web3 has numerous benefits, it isn’t easy to use and has a complex UX, making new users avoid it.
Web3 Examples And Applications
Web3 has many examples of Dapps, including Sapien, Everledger, LBRY, Storj, Ethlance, Design, and Brave Browser. A web browser, MetaMask, connects your device to the Ethereum blockchain. It allows its users to trade, swap tokens, and share data.
Brave Browser accepts and rewards its users’ tokens of the ERC-20 and BAT tokens.
3Box is an online cloud storage application on the Ethereum network.
MyCryptoWallet is an online wallet manager that lets its users trade, send, and buy crypto from all of their wallets.
Civic is an online identity and data management Dapp, accepting its cryptocurrency, CVC.
Rarible is an online community-owned NFT marketplace. Bilski allows its users to create, sell, and display their NFTs.
OpenSea is a popular NFT marketplace with peer-to-peer crypto-collectable and rare NFT trading.
Web3 has numerous applications, including but not limited to: Web Browsers, Cloud storage, Wallet Management, Art Marketplaces, Music Streaming platforms, Decentralized Finance applications(DeFi), Portfolio Management, DAOs(Decentralized Autonomous Organizations), Prediction Markets, Work-Related Applications, Collectible Management, Video Games, Video Streaming Platforms, Virtual Real Estate, Social Media Networks, Messaging and Data Sharing Platforms, Remote Job Platforms, and the most used, Decentralized Exchanges.
Various Terms and Concepts In Web3
Airdrop – An airdrop is the transfer of tokens, coins or NFTs distributed to aQ web3 wallet address at no cost to promote a product or as a reward for taking part in an event or buying a digital asset.
Altcoin – A cryptocurrency other than Bitcoin, has a small market capitalization.
Bitcoin – Bitcoin is an electronic currency created to function as a payment not controlled by any individual, group, or entity. This eliminates the need for third parties to participate in real-world transactions.
Block – Record of transactions done on the Blockchain. Every block has information about the previous one, hence forming a chain.
Blockchain – A blockchain is a decentralized and distributed ledger made up of blocks. Blocks are used to track transactions across multiple computers so that modifications to each block cannot affect subsequent blocks.
Bridge – A bridge in the form of a protocol that allows the transfer of data, tokens, and other information from one Blockchain to the other.
Burn – Removing a cryptocurrency from a circulating supply by sending tokens to an inaccessible wallet address.
Cold Wallet – A device in the offline sphere for storing cryptocurrency.
Cryptocurrency – Digital asset used as a means of exchange.
DAOs – An organization based on open-source and governed by its users.
DApps – Applications are living on the Blockchain. They reward their users for maintaining them.
DeFi – Trustless, borderless, and open-source financial institutions built on the Blockchain without the use of banks.
Ethereum – It is a Blockchain used extensively for Dapps. It is also Turing complete.
Fiat – A currency used in the real world. Like the US Dollar. Which can be controlled by Authorities.
Fork – A change in the Blockchain’s protocol.
FUD – Fear, Uncertainty, Doubt.
Fungible – Interchangeable.
Hashing – Creating data that is not recognizable after taking input.
Hash Rate – Hash rate is a measure of the computing power on a cryptocurrency network
HODL – Hold on for dear life. Meant to be taken as holding a cryptocurrency and not selling it.
ICO – Initial Coin Offering.
Metaverse -A virtual reality world
Mining – Process verifying transactions, organizing, and adding them to the Blockchain.
NFT – Non-fungible token.
Node – A device that stays online on the Blockchain
Protocol – It is the layer made up of software for a program.
Rug Pull – The creators attract investors with crypto schemes, take their funds and run away. Simply, we can say it a scam.
Stablecoin – It is a coin which is backed by an actual currency. It can also be pegged to gold, silver, diamonds, or even cryptocurrency.
Token – A denomination of a currency on the Blockchain
Wallet – Used to store crypto on the Blockchain.
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