Based on an open blockchain network, Web 3.0 is a decentralized internet that large corporations do not control.
Imagine a new kind of internet where all the content you consume is more personalized to you than ever and genuinely understands everything you say, whether through text, audio, or other media.
One that lets you exercise complete privacy control over the information you share with others permits you to make money if you offer it to advertisers or use specific programs and is unaffected by harsh third-party restrictions.
How Web3 Works
Tim Berners-Lee, commonly known as the WWW, created the World Wide Web almost 30 years ago. That abbreviation may as quickly stand for “What Went Wrong” now.
Early internet development was based on the ideological principles of openness, equality, and access to knowledge. Instead, it gave rise to international behemoths like Google (now owned by Alphabet), Facebook (now Meta), Uber, Amazon, and other Web2 giants, which may have transformed their customers into their products by using their personal information in any way they saw fit to continue making money.
Over the past few years, numerous horrifying scandals have surfaced (see Facebook’s Cambridge Analytics fiasco), revealing how Big Tech has utilized the internet as a vast psychological experiment to get the most out of its unsuspecting participants.
Finally, a brand-new kind of web promises to end this and restore the internet to its original purpose. The web is about to enter a new stage of its evolution. Gavin Wood, a co-founder of Polkadot and Ethereum, gave the term “Web 3.0” to several early pioneers. Most often now, we refer to it as Web 3.
With multiple businesses shifting their focus to Web 3.0 and significant venture capital firms like a16z putting millions into its developers, interest in Web 3 has dramatically increased in the year 2022.
Although Web 3 applications already exist and make significant monthly progress, it will be challenging to fully appreciate their potential until the new internet fully integrates into the Web 3 infrastructure.
However, what precisely is Web 3.0, how will it look, and how will it alter our lives?
What Is Web3 (also known as Web 3.0)?
Web3 is the third generation of the internet that is currently being developed. Through the use of technologies like artificial intelligence (AI), machine learning (ML), big data, decentralized ledger technology (DLT), and others, websites and apps will be able to handle information in a smart, human-like manner.
If we consider the shift from Web 2 to Web 3, Web 3.0 is still a rather unclear notion that could take 5–10 years to develop. In reality, a lengthy Web2.5 era in which Web2 platforms progressively adopt important Web3 protocols may very well be what we initially witnessed.
There is broad agreement among experts that, to secure proper decentralization, blockchain-powered applications will be essential to its success, while AI and ML tools will help automate and scale it as necessary for it to become a semantic web.
Tim Berners-Lee, the creator of the World Wide Web, initially referred to Web 3.0 as the Semantic Web. It aimed to create a more independent, intelligent, and open internet.
The definition of Web 3.0 can be enlarged to mean that data would be connected in a decentralized manner. This would be a significant improvement over Web 2.0, where data is primarily held in centralized repositories and thus vulnerable to manipulation.
Users and machines will be able to communicate with data as well. Programs must be able to comprehend information theoretically and contextually for this to happen, though. In light of this, semantic web and artificial intelligence (AI) technologies are the two pillars of Web 3.
What Is the Use of Web 3.0?
Although Web 3.0 technology is still in its infancy, it already has a variety of unique application cases. The current top 5 are as follows:
In 2022, the idea of the metaverse dominated news stories about technology. Facebook even changed its name to Meta and invested billions in research and development to claim this new virtual space. Zuck, don’t move too quickly. The declining stock price and Meta’s Q3 2022 earnings show that investors and customers are not overly enthusiastic about Facebook’s plans for the metaverse.
The metaverse, conceived as a 3D version of the Internet and a digital depiction of the natural world, is essentially a virtual environment. Users can explore via PCs, smartphones, or VR/AR headsets, offering a completely immersive experience that will gradually straddle the lines between reality and virtual reality.
Building all of this will be extremely expensive, which is why well-funded, giant tech companies like Facebook and Google have made significant early investments to dominate the industry eventually.
The metaverse idea put forth by Web 3.0 is radically different; it is open to everyone, decentralized, interoperable, and open-source, and it will fairly compensate creators and security contributors.
Once more, this is where Web2.5 will probably play a role since both businesses will likely borrow ideas from one another and collaborate to make the metaverse a reality.
The play-to-earn craze, which promised gamers the chance to make money from playing games, began with the launch of Axie Infinity in 2021. Soon, tens of thousands of other imitative blockchain-powered games appeared, offering players substantial incentives in native tokens that initially surged in value before continuing to decline.
The game is still not over, even though the bear market destroyed the high-risk sector of cryptocurrency gaming. While Web2 gaming behemoths like Epic Games distribute Web3 games, several high-quality crypto games are still developing. When developers figure out how to make blockchain gaming enjoyable and engaging for gamers, expect a significant resurgence.
One of the main complaints about Web 2.0 behemoths like Facebook, YouTube, and Spotify is that they don’t fairly compensate artists and creators for the audience their platforms attract.
With Web 3.0, creator communities of authors, musicians, designers, and developers can finally communicate with their audiences and supporters without using middlemen. This will enable them to get most of the profits made during the procedure.
Autonomous Decentralized Organizations (DAOs)
There has been much discussion on the potential of decentralized autonomous organizations (DAOs) to establish a fully democratic and self-governing organization that will be immune to outside interference and geographical constraints.
DAOs have drawn criticism for being linked to governance tokens that will eventually lose all of their value, but as long as projects know how to arrange them properly, they have a chance to become the dominant organizational form.
Financial Decentralization (DeFi)
Midway through 2020, the value of decentralized finance (DeFi) skyrocketed, giving cryptocurrency users the freedom to freely invest, borrow, lend, trade, and stake crypto assets. DeFi had its fair share of security issues, including breaches and frauds, but the industry gives Web 3 a chance to sign up potentially billions of people whom traditional financing companies like banks have overlooked.
Prominent Web 3.0 protocols will leverage DeFi products and services to motivate their consumers.
Blockchain, Web 3.0, and cryptocurrency
We may anticipate a significant convergence between these three technologies and other relevant sectors since Web 3 networks will function using decentralized protocols, the building blocks of blockchain and cryptocurrency technology. Smart contracts will automate them, and they will be interoperable, easily integrated, and utilized to power anything from microtransactions to censorship-resistant P2P data file storage and sharing with applications, fundamentally altering how every organization conducts and operates its business. The existing array of DeFi protocols is merely the beginning.
When examining Web 3.0 technology, there are a few things to keep in mind. First off, the idea isn’t brand new. In 2006, Jeffrey Zeldman, a pioneer in creating Web 1.0 and 2.0 apps, published a blog entry endorsing Web 3. However, discussions on this subject started around 2001.
The development of Web 3 technologies
A natural progression of previous-generation web tools paired with cutting-edge technologies like blockchain and artificial intelligence, as well as user connectivity and rising internet usage, will give rise to Web 3. Internet 3.0 appears to be an improvement over Web 1.0 and 2.0.
Read (1989-2005) in Web 1.0
Despite just providing access to a small amount of information and requiring little to no user input, Web 1.0, also known as the Static Web, was the earliest and most trustworthy internet in the 1990s. Making user pages or simply commenting on articles wasn’t common back then.
Users found it very challenging to locate pertinent information on Web 1.0 because there were no algorithms for sorting internet pages. Simply described, it resembled a one-way street with a little pathway where a select few created the material, and most information came from directories.
Web 2.0: Read-Write (since 2005)
Since data can now be distributed and exchanged between different platforms and applications, this has paved the way for developing social networks and user-generated content.
Several web inventors, like Jeffrey mentioned earlier, Zeldman, invented the technologies used in the current internet era.
Read-Write-Own (Web 3.0 or Web 3)
Web 3 is the next stage of the web’s growth, which would give the internet a higher level of intelligence or allow it to analyze information with an intellect nearly on par with that of a human being.
According to Tim Berners-Lee, the Semantic Web is intended to “automatically” interface with systems, people, and domestic appliances. As a result, both humans and machines will be involved in the content development and decision-making processes. This would enable intelligently producing and providing highly tailored content to every internet user.
While many established Web2 companies may be failing right now due to challenging macroeconomic conditions, they will most certainly not give up as unproven Web3 startups try to plunder their vast networks. Getting to the promised land of Web 3 will be easier said than done.
Instead, it’s more likely to be a matter of adapt or perish, with Web2 companies auditing appropriate Web3 technologies and progressively integrating them into their platforms to secure their future. As seen by Reddit’s massive recent NFT wallet implementation, this will frequently be subtle enough that the end user will not even be aware that they are engaging with Web 3 technology.
The beginning of this process may be seen in Meta’s recent statement that Instagram will employ Polygon (MATIC) and Arweave (AR) to assist its users in creating and storing NFTs.
Known as Web 2.5, this time of transition may operate as a meeting point for established brands and enterprises for several years as they prepare their operations for the emerging metaverses, NFTs, and Social markets.
Both parties should gain from this information and talent exchange because Web 2.0 companies can learn from Web 3 startups’ ideas and vice versa. In the end, Web2 businesses may even provide their users with a lot more freedom, autonomy, and even financial incentives to keep them.
The Essentials of Web 3.0
We need to look at the five main characteristics of Web 3 to comprehend the future phase of the Internet fully:
- Metadata Web
- Machine intelligence
- Web in space and 3D graphics
- Blockchain-based decentralization
Being or being able to be everywhere, especially at once, is referred to as ubiquitousness. omnipresent, to put it another way. In that way, Web 2.0 is already pervasive. For instance, a Facebook user can instantaneously take a photo and publish it, making it pervasive because it is accessible to everyone, anywhere, who has access to the social networking platform.
Simply put, Web 3 goes one step further by providing universal access to the Internet at all times and from any location. Internet of Things (IoT) technology will eventually lead to the emergence of numerous new categories of smart devices so that internet-connected gadgets won’t be limited to computers and smartphones in the future like they were in Web 2.0.
The study of word relationships is known as semantics. Berners-Lee claims that the Semantic Web allows computers to analyze vast amounts of Web-based data, including content, transactions, and links between people. How would this look? Take these two statements as an example:
Although their syntax may differ, their semantics are essentially the same because they solely deal with the content’s meaning or emotion.
Machines could decode meaning and emotions by analyzing data if semantics were applied to the Web. Because of improved data connectivity, internet users will enjoy a better experience.
Wikipedia defines AI as machine intelligence.
And because Web 3 machines can read and interpret the meaning and feelings a piece of data conveys, it creates intelligent machines. Even if Web 2.0 offers comparable capabilities, it is still largely human-based, which leaves room for dishonest practices such as biased product reviews and rigged ratings.
For instance, Trust Pilot and other internet review sites give customers a means to rate any good or service. Regrettably, a business can easily assemble a sizable crowd of people and pay them to write favorable reviews for its deserved items. Therefore, for the internet to deliver trustworthy data, AI must learn to differentiate between the real and the fake.
Following the Game spot trading fiasco, Google’s AI system recently erased around 100,000 negative ratings of the Robinhood app from the Play Store after it discovered attempts to artificially lower the app’s rating. This is artificial intelligence (AI) in action, which will soon be seamlessly integrated into Internet 3.0, allowing blogs and other online platforms to sift through data and customize it to each user’s preferences. AI will eventually be able to give users the best filtered and impartial data possible as it develops.
Web in space and 3D graphics
Because it aspires to obfuscate the distinction between the real and the digital by revolutionizing graphics technology and bringing three-dimensional (3D) virtual environments into sharp relief, some futurists also refer to Web 3 as the Spatial Web.
In contrast to its 2D counterparts, 3D visuals provide a new degree of immersion in various fields, including e-commerce, real estate, health, and futuristic gaming apps like Decentraland.
Blockchain and decentralization
Due to their capacity to enable the decentralized transmission of data and money on a global scale in a completely trustworthy, transparent, and unchangeable manner, blockchain and cryptocurrency technologies have seen a significant increase in popularity in the past ten years. This makes it perfect for an internet that needs to be able to safeguard information privacy and fend against outside censorship or sabotage attempts.
However, the following growth of DeFi, NFTs, and now Web 3 gives a clear roadmap to a future digital economy, whereas crypto, in particular, has struggled to deliver a compelling use case beyond being some digital gold.
Applications for Web 3
It’s a frequent necessity for a Web 3 application to process massive amounts of data and provide users with factual knowledge and relevant actions. These applications are still in their early phases, which means there is much space for improvement, and they are very different from how Web 3 apps might ultimately operate.
Amazon, Apple, and Google are a few businesses creating or existing products that they are transitioning into Internet 3.0 apps. Siri, Wolfram Alpha, and Brave Browser are three examples of programs that make use of Web 3 technologies.
Since its initial release in the iPhone 4S model, Apple’s voice-activated AI assistant has become more sophisticated and has increased its capabilities. A crucial element of Web 3, speech recognition, and artificial intelligence are used by Siri to carry out complicated and customized commands.
Today, Siri and other AI assistants like Amazon’s Alexa and Samsung’s Bixby can comprehend queries like “Where is the nearest burger joint” or “Book an appointment with Sasha Marshall at 8:00 am tomorrow” and instantly provide the appropriate knowledge or action.
Instead of providing a list of websites like search engines do, Wolfram Alpha is a “computational knowledge engine” that directly computes answers to your queries. Search “England vs Brazil” on both Wolfram Alpha and Google to compare the two countries practically.
Due to the popularity of “football”, Google provides World Cup results even if you don’t mention it. On the other side, Alpha would provide you with a thorough comparison of the two nations as you requested. The main distinction between Web 2.0 and 3.0 is this.
In May 2021, Wolfram Alpha, dabbling in the crypto world, announced a partnership with Filecoin and IPFS to provide a uniform decentralized services interface.
Today’s most widely used web2 browsers, like Chrome, provide extra functionality through a sizable library of unique extensions, many of which have a strong cryptocurrency focus. Examples of such extensions include wallets from companies like MetaMask, Phantom, and others. But it’s also simple for criminals to modify or produce fake versions of these applications, lure unsuspecting users with phishing schemes, and trick them into giving up their wallet access or sending their cryptocurrency to a hacker or con artist’s address.
Here’s where the Brave browser and the Crypto Browser from Opera shine. Through its Basic Attention Token (BAT), Brave gives its users much better control over their data, privacy, and preferences, such as advertising. Users of Brave are protected against trackers, fingerprinting, and phishing attempts thanks to the browser’s many cutting-edge privacy and security features, including an integrated VPN and firewall.
Additionally, Brave’s integrated cryptocurrency wallet enables users to stay away from the dangers associated with using third-party add-ons.
How Do Web 3 Cryptos Work?
A new class of cryptocurrency assets called Web 3 cryptos will create Web3’s fully decentralized internet.
These cryptocurrencies serve as the native assets for Web 3 initiatives that run on blockchain and use smart contracts to give internet users back control over their data and enable direct transactions without the use of Web 2 middlemen. Web 3 cryptos are utilized as rewards for network users who assist in governing, securing, and expanding their separate chains.
Why Use Web 3 Cryptos?
Web3 cryptos are digital currencies utilized by Web 3 blockchain-based applications to offer specific services and benefits to users. Web3 is the name for a decentralized version of the Internet.
Critical decentralized services like network infrastructure (like Helium and Deeper Network), data storage (like Arweave and Filecoin), bandwidth and processing power-sharing (like The Graph and Theta for video), data indexing (like Steem), social media (like Steemit), and more are provided by Web 3 projects using Web 3 cryptos.
Web 3 versus Web2
The dominant and digital solid companies, such as Meta (Facebook and Instagram), Alphabet (Google and Youtube), Amazon, Uber, and Airbnb, control Web2, the current centralized form of the Internet. The TANSTAAFL principle (“there ain’t no such thing as a free lunch”) still holds even when they offer fantastic different Digital Marketing Services (such as maps, social media, streaming, etc.). If you don’t understand how a business generates revenue from its offerings, the answer is obvious: you are the offering.
These Web2 goliaths fully monetize user data and frequently utilize it for questionable ends (see the Cambridge Analytics incident involving Facebook) to increase revenues at the expense of users. Additionally, they exercise strict control over what is and isn’t permitted on their services (in some cases, with good reason).
Web 3.0, often known as Web3, is a decentralized, open-source internet currently being developed that intends to address these shortcomings of Web2 and gives people more choice over their right to free expression, the data they choose to share, why, and how it is utilized.
Like cryptocurrency, Web3 projects, infrastructure service providers, and users are typically encouraged to promote a network by benefitting from its native assets, such as maintaining a node or exchanging user data. Because Web 3 is decentralized and depends on regular users for support, it can scale much higher than Web2 companies over time as media consumption, artificial intelligence, and the Internet of Things (IoT) continue to demand more resources.
By removing any digital barriers or gatekeepers between users, regardless of their location or identity, Web 3 can open up a whole new world of decentralized applications, digital economies, and trustless transactions.
It’s unlikely that Web2 or Web3 will ultimately defeat the other. As we can see, the largest Web2 companies are incorporating Web 3 elements and services, or Web2.5, including NFTs (Amazon), better data privacy, and decentralized data storage and wallets (Microsoft).
A Web 3 application must be created using distributed ledger technology (DLT) to be fully decentralized and immune to outside influences like government censorship or data abuse. Building a decentralized ledger with no centralized middleman and no single point of failure is possible using a blockchain or directed acyclic graph (DAG).
Due to the widespread distribution of the Web 3 ledger across an extensive network of nodes, it is very challenging for a single person to manipulate the ledger. If appropriately implemented, blockchain technology guarantees that a Web 3 project’s ledger is unchangeable (cannot be changed), completely transparent (free to view on public chain explorers), and democratic (changes require the approval of at least 51% of nodes and are frequently governed by a DAO once they reach a specific size).
What Foundation Will Web 3.0 Have?
The fundamental basis enabling Web 3.0 projects to operate a decentralized and peer-to-peer (P2P) network as they see fit without the need for centralized intermediary service providers is provided by distributed ledger technology (DLT) applications like blockchain and DAG.
Web 3.0 applications benefit from blockchain technology’s various cutting-edge tools, including smart contracts, native cryptocurrencies, NFT collectibles, and DApps. These tools all contribute to Web 3.0’s goal of giving users a less controlled and more personalized internet experience with more personal freedom.
Blockchain enables Web 3.0 ledgers to become unchangeable, transparent, and censorship-resistant and to maintain complete control over the usage of user data.
The Web3 Foundation (W3F): What Is It?
Dr. Gavin Wood of Polkadot formed the Web3 Foundation (W3F) in 2017 to advance the decentralized web, commonly known as Web3.0 or Web3, a phrase Wood had coined years earlier. Its goal is to foster applications for Web3 technology and apps. It is based in Switzerland. The Web3.0 Foundation, or W3F as it is commonly called, offers grants and financing to support activities and projects that support the development of the Web3.0 ecosystem.
What Distinguishes the Web3 Platform from the Metaverse?
Contrary to popular belief, metaverse and Web3 should not be used interchangeably.
The next version of the Internet, Web3, aspires to build a more decentralized and democratic Internet where people have more control over their data and interactions.
Web3 refers to the creation of a decentralized, democratic internet that protects users from unfair censorship and data exploitation while empowering them.
The phrase “metaverse” simply refers to a networked virtual environment where users’ digital avatars can communicate with one another through games and social events like concerts and own unique non-fungible digital assets like real estate, buildings, and gaming equipment.
The long-term development of a viable metaverse relies heavily on virtual reality (VR) technology since it offers a more seamless, immersive experience that can resemble real life. VR technology is not required to use Web 3. Most metaverse projects currently only function on desktop computers or mobile devices, although many may scale using Web3 technology in the future.
A vast global metaverse will almost certainly need integrated Web3 services like graphics processing and data storage at the very least, but as Meta (Facebook) has demonstrated, a metaverse does not require decentralized technology to run. Because of this, Web3 should become a fundamental aspect of all metaverses and aid in motivating members through cryptocurrency assets, allowing it to gain popularity.
How Should You Invest in Web 3.0?
By purchasing and holding the native crypto assets of Web 3.0 enterprises or technologies, you can invest in the sector, but you must first perform your research. Things are rarely as they seem in the crypto sector, which is infamous for its degrees of dishonesty.
Numerous initiatives are opportunistic cash grabs that seize upon the newest, hottest concepts, like AI, to deceive investors. Sometimes even reputable projects will abruptly change course and misrepresent themselves by using terms like Web3 to increase interest and price movement.
Look no further than CoinMarketCap’s list of the top Web 3 tokens; this should be the ideal place to begin your due diligence before investing. You can discover all the crucial information you require, including market size, fully diluted valuation (FDV), trading volume, and more. Pay close attention to a project’s tokenomics and other elements like its vesting time, unlock schedule, FDV, and circulating supply since these might significantly impact price if unfavorable.
You will need to use decentralized wallets or exchanges like MetaMask or Uniswap to buy new Web 3 projects since many of them are not listed on centralized exchanges. Please read my guides on self-custody and Web 3 cryptocurrencies if you are new to cryptocurrency before you begin since you must take specific precautions to preserve your money.
Web 3.0 Tokens of Note
Our ranking of the top Web3 Tokens by market cap shows that Internet Computer (infrastructure), Chainlink (price oracle), Filecoin (data storage), Stacks (Bitcoin smart contract layer), and Polkadot (infrastructure) are now in the top five. See the list to see more than 100 Web 3 cryptocurrencies ranked by market cap and other parameters of your choice.
What Drawbacks Exist for Web 3.0?
Except for NPOs like the Web 3 Foundation, Web 3 is still somewhat of a Wild West (Wild Web) and lacks a central party to oversee its expansion. As a result, it now finds it difficult to provide users with a consistent and straightforward experience due to the lack of industry-wide standards and rules. They are frequently created by tiny development teams prioritizing the product over other factors like user-friendly design and marketing, making them complex and challenging. The application and scope of these Web 3 protocols are so constrained.
The environmental friendliness of Web3 technologies that rely on mining-based proof-of-work (PoW) consensus validation continues to raise some questions. However, unless Bitcoin-related projects become highly successful for some reason (securities, anyone? ), this is now a nothing burger due to the adoption of proof-of-stake (PoS) by the largest chains, such as Ethereum.
What Distinguishes Web 3.0 Tokens and Coins?
To power their networks and DApps, the Web 3 industry uses both currencies and tokens. It’s crucial to make a distinction between the two, though.
Coins are used to exchange to run the chain and collect gas fees. Coins are the native digital assets of specific independent blockchains, such as Ethereum’s ETH and Solana’s SOL cryptocurrency.
Tokens are digital assets created and stored on a blockchain network, like Ethereum, in a predefined format, like ERC-20 or ERC-721. They typically cater to a particular use case, like governance, for their protocol. They use the base chain’s security, which is crucial for any functionality driven by smart contracts.
In a world that is becoming more and more digital, Web3’s new internet will provide people with more digital ownership and sovereignty, along with other decentralized advantages that are intended to create a more egalitarian web. This will be accomplished by giving each user autonomy over their data and enhancing the overall user experience due to the numerous improvements implemented once it is in place.
The internet will become significantly more intertwined into our daily lives when Web 3 eventually materializes, frequently without our knowledge, given how deeply smart devices have established our routines and how much they have altered our behavioral patterns.
Nearly all of today’s typically offline machines, including household appliances like ovens, vacuums, and refrigerators, as well as all forms of transportation, will interact with the IoT economy’s autonomous servers and decentralized applications (DApps), advancing new digital realms like blockchain and digital assets to power a variety of new technological “miracles” for the twenty-first century.
If you know where to look, the future is still promising and relies on blockchain and cryptocurrency.