- Automated Market Maker
- Blockchain Explained
- Blockchain: Private vs Public
- Blockchain Oracle
- Cryptocurrency Trading
- Digital Assets
- Digital Banking
- Digital Currency
- Digital Securities
- Digital Wallet
- Directed Acyclic Graph
- Equity Crowdfunding
- Equity Tokens
- Hard Fork
- NFTs (Non Fungible Tokens)
- Proof of Work vs Proof of Stake
- Security Tokens
- Stablecoins Explained
- Stablecoins – How They Work
- Smart Contracts
- Token Burning
- Tokenized Securities
- Utility Tokens
- Web 3.0
Digital Assets 101
What is Web 3.0? A Comprehensive Guide
Table Of Contents
For several years now, the crypto industry has been talking about something called Web 3.0, and how much it would impact the internet, the way we communicate and share content, and even the entire world. However, if you are new to the industry, you might be confused about what this is and why does it matter to the crypto world so much.
If that is the case, then you are in the right place, as we are about to share all that you should know about Web 3.0.
The history of the Web
In order to properly understand Web 3.0, we should first revisit the previous versions of the web, so that you would have some idea about what is changing, and how it is going to impact the internet. With that said, let’s start from the beginning, and go to the first version of the web, known as Web 1.0.
Web 1.0 first emerged back in 1989, and it lasted for several decades — finally ending in 2005, approximately. Known as the Static Web, it was the first version of the internet, and according to some — the most reliable one.
Make no mistake, Web 1.0 was not brimming with information like the internet that we know today. In fact, the information has been rather limited, with little to no user interaction. Back then, creating user pages, commenting on articles, and similar things were not a thing.
There were no algorithms to sift internet pages, so locating relevant information was not easy. The best way to describe it would be as a one-way highway, with a very narrow footpath where content creation was even possible. Even that was done only by a handful of people, and most of the information available on the internet came from directories.
In other words, it wasn’t the best version of the internet, but that was to be expected from the original web.
This, in turn, allowed for the creation of social networks and interactive web platforms, many of which emerged in 2005. These include the likes of Facebook, YouTube, Wikipedia, and many others. Then, as years went on, social networks flooded the internet, and today, in 2022, we have more of those than we can count.
Web 2.0 also paved the way for user-generated content production. Anything from photos and memes to videos, art, indie games, and all other forms of content that users could create started to emerge, and dedicated platforms started popping up. All of this data can now even be distributed and shared between different platforms. Just think about sharing the news on Facebook with a single click, or posting your favorite song from YouTube on any other social network without ever having to leave YouTube, and you will get an idea of what we are talking about.
However, despite all of its advantages, the current web still has many major flaws. Security, privacy, centralization, invasive advertising, and more are just some of the issues that we currently have to deal with. But, after Web 2.0 pointed out the flaws, so the Web 3.0 developers came up with concepts on how to fix them in the next version of the internet.
What is Web 3.0?
Finally, we come to the big question — what exactly is Web 3.0?
To put it quite simply, Web 3.0 is the next step in the evolution of the web, and its goal is to make the internet more intelligent. According to some people, the internet will be able to process information with near-human-like intelligence by using emerging technologies, such as blockchain, cryptocurrency, AI, and others. As such, it should be able to easily run smart programs to assist users.
Web 3.0, or simply Web3, will not simply allow users to use free tech platforms and pay for them with their data. Instead, users will be able to participate in the governance and operation of protocols, themselves. We will not be customers using products, but participants and shareholders, as well.
Web3 will empower the user, and put them a lot closer to where all the action is, instead of having them as passive observers, while centralized companies are running the show. Obviously, this means that Web 3.0 will have a strong focus on decentralization.
Users will be able to decide who gets to see their data, and for how long. Not only that, but users will also be able to monetize their data, and make the companies work for it if they want to obtain it.
Also, anything, from physical to digital goods will be able to be tokenized, including art, in-game items, physical goods, and more. Tokenizing physical goods and storing that data on the blockchain, for example, can have great applications. This method is already transforming supply chains, eliminating smuggling and theft, proving ownership of items, and more.
New models such as P2E will allow users to earn money from playing games, thus allowing them to profit from their favorite hobbies. More than that, Web 3.0 will also ensure that players can forever remain in the possession of their in-game items unless they decide to sell them. Players will no longer see their equipment become terribly unbalanced due to a new patch that the game introduced, without the players having a say in whether they want the patch or not.
Web 3.0 will also bring the metaverse, forever changing the way that people communicate with one another. Metaverses are already out there right now, allowing users to purchase digital land, organize events and virtual meet-ups, use that land for developing entire businesses, and more.
It will connect IoT devices more directly than ever before, allowing them to communicate with one another and send data at extreme speeds, thus allowing a lot more efficient smart homes, and even entire smart cities to exist and operate themselves. Thanks to blockchain, AI, and other emerging technologies, the information will be a lot safer, and security systems a lot more resilient to hacking attacks.
Blockchain also brings immutability and transparency, so the censorship of data will not be an issue anymore. Information stored on the blockchain cannot be removed or tampered with by an individual or a small group. Instead, the majority of the community needs to agree to do it in order for the changes to be made.
Your personal data will also be under your control, and invisible to others, unless you grant them access to it. This means that sensitive information, such as your ID, medical files, and other similar things can be uploaded to blockchain and given to you to care for it yourself.
All of this is still only scratching the surface of what Web 3.0 has the potential to bring to the world, so there is indeed a lot to look forward to.
Criticisms of Web 3.0
Of course, there are some criticisms of the next version of the internet that some people have already pointed out, with the main one being the fact that it falls short of its ideals. For example, ownership of blockchain networks is not, and likely will not be equally distributed. Instead, it will be in the hands of early adopters, venture capitalists, and others who fund this technology and had enough money to get involved with it before the majority of the world’s population.
Another criticism says that blockchain projects are decentralized in name, but not in substance. There are many private chains and VC-supported investments out there that do support this. Even DeFi, or decentralized finance, which is supposed to be a way to decentralize banking services and offer them to everyone in the world equally, fails to meet its own ideas.
There are hundreds of millions so of dollars locked inside of each protocol right now, but only a handful of people that holds the keys to that money. This is popularly named decentralization theater, where things are not exactly the way they seem to be.
Also, there are many figureheads of the crypto industry, despite the fact that it is supposed to be leaderless. One example is Ethereum’s co-founder, Vitalik Buterin, who continues to have his own way over the matters regarding Ethereum, even though he publicly said that he is no longer involved in development.
Web 3.0 has the potential to bring massive changes to the world, but it also has a lot of flaws, as some things appear impossible to reach, such as total decentralization. Whether it is because we, as people, need a figurehead to lead, or because those who lead cannot abandon the position of leadership — it remains to be decided.
However, the potential for changes — positive changes — that Web3 can bring cannot be denied. There are some who believe that Web 3.0 will never completely replace Web 2.0, and that the two will run side-by-side, which might be true, as well. For now, however, it is all still too vague, and it will be some time before Web 3.0 solidifies and starts to take its real shape. Then, and only then will we know with certainty what is actually within the realm of possibility.
Ali is a freelance writer covering the cryptocurrency markets and the blockchain industry. He has 8 years of experience writing about cryptocurrencies, technology, and trading. His work can be found in various high-profile investment sites including CCN, Capital.com, Bitcoinist, and NewsBTC.