Web3 (Web 3.0) is the term for the next generation of the Internet. It covers both infrastructure elements and applications.
There is no exact definition of Web3. The concept of Web 3.0 appeared in the 90’s and included such concepts as the semantic web. In recent years, Web3 is associated with the principle of decentralization.
Modern Web3 applications have attributes such as DAO, cryptocurrencies, blockchain and decentralized data storage systems, sovereign identity (SSI), the Internet of Things, meta-villages, NFT and other phenomena and technologies.
What is Web 1.0 and Web 2.0?
Web 1.0 is the first version of the “World Wide Web” (World Wide Web), which began to gain popularity in the early 90’s after the introduction of the communication protocol and HTTP. Websites in this version were static pages with text, links and images. According to Tim Berners-Lee, called the author of the Web, Web 1.0 sites were “read-only.” Interaction with the sites was limited to the simplest forms of communication, such as forums.
Web 2.0 is the second generation of the Internet, which began to spread in the early 2000s. The basis of Web 2.0 are interactive platforms and services connected to the World Wide Web. The difference from the first generation is that the sites have become web-applications, which can be used independently by users. Later to this added social networks and a system of cloud services. Famous representatives of Web 2.0 are Amazon, Facebook and Twitter.
How is Web3 different from previous versions of the Internet?
In Web 1.0, data was presented to users statically – websites were purely informational. In Web 2.0 users actively interact with Internet resources, create their own content and communicate with each other.
The concept of Web 3.0 first appeared in the 90s. Berners-Lee called it the semantic web. The architecture of the new generation was to include several major components. Among the main ideas of Web 3.0 was to translate all network content written in human language into machine-readable form, which would allow algorithms and programs to recognize the meanings of messages and build connections based on them.
Subsequently, the perception of the concept changed. In 2014, Ethereum co-founder Gavin Wood published an article in which he described Web 3.0 from a new perspective – as a more decentralized version of the network built using blockchain. His suggestions were primarily about changes in data storage and increasing the anonymity of users.
In 2021, the term Web 3.0 was recalled again – against the background of the growing popularity of decentralized applications and NFT. The word “Web3” also gained popularity during the heated Internet discussions.
What exactly is Web3?
The cryptocurrency community is still looking for a definition for Web 3.0. But its fundamental difference from Web 2.0 is increased decentralization at all levels, including data storage and application use. Applications of the Web3 era are often defined as those that have one or more of the attributes listed below:
- Blockchain and smart contracts are integrated into individual product features;
- The source code of the program is published and there is an opportunity for third-party developers to participate;
- the service uses virtual (VR) or augmented (AR) reality technologies;
- cryptocurrency payment tools built into the frontend;
- use of non-interchangeable tokens (NFT);
- the data storage system uses the IPFS protocol;
- a decentralized autonomous organization (DAO) is involved in project management.
Web3 also involves the active use of artificial intelligence (AI). This provides ample opportunity to personalize the user experience. A similar principle underlies the business models of many large Web platforms, such as YouTube, Netflix or Amazon. Though they remain centralized in terms of organization.
Web3 is also closely related to the notion of a meta-universe.
Another key Web3 phenomenon is sovereign identity.
How do Web3 applications work?
The development of “next generation” applications adheres to the decentralized organization of data, including its storage. At least part of the data of a web application is stored in a blockchain, i.e. it is decentralized.
The development of the product is not only and not so much the owner, but the distributed community. It manages the project through a DAO (decentralized autonomous organization).
In turn, decentralization is the key to what cryptocurrencies and smart contracts have managed to realize in the economy: eliminating the need for trust and, therefore, for intermediaries and centralized structures.
Thus, the ideal state of Web3 is freedom from censorship and restrictions, as well as an efficient business model without the use of hierarchical structures and traditional financial instruments.
What blockchain projects are working in the Web3 sphere?
There are many projects in the crypto industry that position themselves as part of the Web3 movement. To name a few of the biggest examples:
Filecoin (FIL), a global “marketplace” for decentralized data storage. It is an alternative to centralized cloud storage: it unites a network of computers whose users can “rent” free disk space. Filecoin’s competitors are Storj (STORJ) and Siacoin (SC).
In the direction of data transmission and the Internet of Things (IoT), there are also successful examples. One of them is Helium, a decentralized network of special modems that provide a fast and stable connection service for IoT devices, especially smart sensors and meters.
Another example is IOTA, which is built on a kind of distributed ledger without the use of blocks or mining. Instead, each successive transaction validates the previous two. IOTA is also designed for “smart” devices, which can make microtransactions on this network virtually for free.
There are projects that offer a new system for organizing and finding content on the Web. For example, The Graph (GRT) is a decentralized and open indexing protocol for blockchain data queries, acting as an analog of an Internet search engine. The Graph groups information from a separate network into a so-called subgraph, which can be accessed via an API. Applications can retrieve any data from the subgraphs via SQL queries.
Polkadot originally positioned itself as a platform for Web3 and decentralized applications in particular. For developers, there is the Polkadot Substrate toolkit, which allows to create separate blockchains (so-called “parachemes”) connected to each other within the Polkadot ecosystem.
The obvious contender for the title of the main blockchain for Web 3.0 is Ethereum, which has already become the main platform for decentralized applications. In addition to many DeFi- and NFT-projects, we can highlight Ethereum Name Service, which allows generating domain names tied to an address in the network.
Blockchains for Web3 include other platforms for decentralized applications, including Solana, Avalanche, Polygon, and others.
Why do we need cryptocurrencies in Web3?
Many next-generation Internet projects may have their own crypto-asset, which has certain functions or gives advantages when using the application.
One common function of a project token is management. Token holders participate in the management of the app through the DAO, a decentralized management body that operates through smart contracts.
The amount of tokens in possession determines the “weight” of the vote in votes. Members of the DAO themselves formulate and discuss new proposals and vote on them. VAO votes can concern a wide variety of issues, from allocating funds for a project to changing some parameter of an application.
In this way, the DAO is responsible for the development of the project and its tokenomics.
Are large Internet companies also developing Web 3.0?
The Web 3 concept attracts not only crypto projects and startups, but also traditional Web 2.0 players – large technology companies.
In May 2022, Google Cloud announced that it would begin developing tools for blockchain developers. Eric Schmidt, former chairman and head of Google, called the idea of Web3 interesting and highlighted two changes that the new generation of the Internet will bring – the ownership of content by users and compensating them for their activity. And Ethereum co-founder Joseph Lubin pointed to the decentralization opportunities that the “new version” of the Internet offers.
YouTube plans to incorporate elements of Web3 into its products. The Opera browser team is developing support for decentralized applications at the native level.
According to Grayscale, annual revenue growth in the Web 3.0 metaclass sector will reach $1 trillion. Large companies such as Uniswap Labs, Pantera Capital and Dragonfly Capital have created venture capital units that will focus on Web 3.0 application development.
According to a study by Electric Capital, the number of developers in Web3 technology increased by 75% in 2021.
Why do they criticize Web 3.0?
The vagueness of the definition and the extremely frequent use of the word make the idea of Web3 a popular object of criticism.
For example, businessman Elon Musk said in an interview in late 2021 that Web 3.0 is “more of a promotional tool than something real.
Twitter founder Jack Dorsey criticized the concept for being too heavily influenced by venture capitalists, so it would never be decentralized.
Dorsey later unveiled his own “new Internet” project – Web5 platform. It allows developers to incorporate decentralized data storage and digital user identity into applications.
Cryptographer and founder of the Signal messenger Moxie Marlinspike drew attention to the fact that applications claiming to be decentralized rely on decentralized services, in particular servers and APIs, in their work.