If you wonder, "What is Web3?" you aren't alone; many others wonder the same thing. This burning question is because Web3 requires more work to define correctly or articulate. As this concept continues to evolve and change, so does its definition. This blog looks at the meaning of Web3 along with the various elements and features that make it unique compared to past versions of the internet.
What is Web3?
Initially, the term "Web3" was coined in 2014, thanks to Gavin Wood, one of the co-founders of Ethereum. At its essence, Web3 is the next version, also known as the "3rd generation" of the internet. As you read this sentence, many tech-savvy individuals and innovative businesses are working to make this a reality. Many of these forward-thinking people hope that the internet can be more equitable.
The dream is that Web3 would be decentralized and function off blockchain technology in an open-based Web format. Fundamentally, Web3 is working to remove the power from a select few companies such as Amazon, Google, Apple, and others; the hope is that average users will regain this power.
Currently, we're in Web2, which doesn't allow the average person to control their data; giant tech companies are the ones who control their user's data. Web3 hopes to change that, giving people back control over their data using blockchain technology and providing a decentralized storage infrastructure for everyone.
Web3's Core Elements
As this is a relatively new catch-all term for revised, improved internet, Web3 has several key core elements that set it apart from Web2 in current use. Below are Web3's four core elements that will revolutionize the internet as we know it, guiding Web3's ongoing formation.
Decentralized: Web3 uses a completely decentralized infrastructure that gives ownership back to ordinary people and away from large tech corporations.
Permissionless: Web3 uses a design that gives everyone equitable access to the internet, leaving no one out.
Native Payments: Web3 uses native payments; cryptocurrency is the primary medium when spending money or buying products and services. Essentially, the aim is to rely less on an outdated banking and payment infrastructure.
Trustless: Web3 allows users to interact directly with one another instead of relying on "trust" third-party platforms.
At its core, Web3 uses blockchain technology, cryptocurrencies, and NFTs, all of which strive to give back power to the average user in the form of ownership. As a comparison, a 2020 tweet stated that Web1 was primarily "read-only," while Web2 is "read-write," and Web3 uses a design allowing for "read-write-own."
5 Important Features of Web3
The truth is that Web3 is a relatively new concept, and thought leaders in the tech space are still working on defining the features of Web3. Some of the vital aspects of Web3 are listed below, along with a summary for each item.
1. User Ownership
The first critical feature of Web3 is that it gives users ownership over digital assets and their data, which is unheard of in today's world. For example, if someone plays a video game on the Web today, and you purchase it, it becomes linked to your account. However, if the video game company decides to pull that game from being listed, you'll lose that item forever.
In Web3, you'll have direct ownership of that game, using non-fungible tokens (NFTs), making it possible to access that purchase always. This feature would give only the owner access; no one, not even the game creators, could revoke video game ownership. If, for whatever reason, you decided to stop playing that game, you could trade it in an open market and retrieve its value for cryptocurrency in exchange.
2. Less Censorship
In reality, it's almost impossible to censor users on the internet completely; it eventually becomes much like the carnival game whack-a-mole. Regarding Web3, using blockchain technology, distributed ledger systems, and cryptographic techniques would make tampering with or deleting content and blocking user access challenging.
3. Decentralized Autonomous Organizations (DAOs)
Investopedia defines a decentralized autonomous organization (DAO) as "an emerging legal structure with no central governing body and whose members share a common goal to act in the best interest of the entity." This new tool allows users to collectively set up and own their own companies, all thanks to some help from cryptocurrency and blockchain technology.
Currently, some people define Web3 communities as DAOs. Although this needs to be more technically accurate, it does give an idea of what the future looks like for Web3. Within a DAO, cryptocurrency tokens act as shares do in the stock market; the more tokens, the more influence a person has in decision-making. Friends With Benefits is an excellent example of a DAO in action, which received $10 million in funding from Andreessen Horowitz and a16z.
Within the Web2 realm, users must create a different profile for every new platform they wish to use; with Web3, that's history. For example, if you sign up for Twitter, you must make a profile for that platform, then another for Instagram, and so forth. In Web3, with a single click, users can change their online profile without signing into dozens of platforms to change each profile.
On top of that, each platform in Web2 technically controls your data and identity. With Web3, this problem is no longer something to worry about anymore. Thanks to an Ethereum address and ENS profile, this feature allows anyone to regain control over their identity. With an Ethereum address, users can use a single login across all platforms that are entirely secure, censorship-resistant, and anonymous.
5. Native Payments
As mentioned, Web3 allows native payments, which use cryptocurrencies as the primary medium for buying or selling within the decentralized space. This feature is crucial because it allows anyone to receive or send funds without an intermediary like a bank.
Some people can't open a bank account across the globe, whether it's because of the specific country they live in or because the country's banking system is highly corrupt and unstable. With Web3's native payments, this would include millions, if not billions, of new users in a new financial system.
Hungry for more? Join me each week, where I'll break down complex topics and dissect the latest news within the cybersecurity industry and blockchain ecosystem, simplifying the world of tech.