What is Web3? An easy explanation with examples

First, there was web1 – aka the internet we all know and love. Then there was the web2, the web generated by the users, heralded by the arrival of social media. Now, everywhere we look, people are talking about web3 (or sometimes web 3.0) – the supposed next big leap in the evolution of the internet. But what is it exactly?

Well, opinions on this matter differ somewhat. Web3 is currently a work in progress and not yet exactly defined. However, the fundamental principle is that it will be decentralized – rather than controlled by governments and corporations, as is the case with today’s internet – and, to some extent, connected to the concept of ” metaverse”.

Before we start – just to avoid confusion – it should be mentioned that until a few years ago the term “web 3.0” was frequently used to describe what is now called the “semantic web”. . Sir Tim Berners-Lee, “original father of the Internet”, for a machine-to-machine Internet. Language is defined by its usage, and the term is more frequently used to describe something else now. However, Berners-Lee’s concepts are considered part of what we now call web3, but not all of it.

What is the decentralized web?

Let’s look at decentralization first. Today, all of the infrastructure on which the popular sites and hangouts we spend time on is generally owned by corporations and to some extent controlled by regulations set by governments. That’s because it was the easiest way to build network infrastructure – someone pays to set up servers and install software on them that people want to access online, then charge us for the usage or leave it to us. to use for free, as long as we follow their rules.

Today we have other options, and in particular we have blockchain technology. Blockchain is a relatively new method of storing data online, which revolves around the two fundamental concepts of encryption and distributed computing.

Encryption means that data stored on a blockchain can only be accessed by people authorized to do so, even if the data is stored on a computer owned by someone else, such as a government or a company.

And distributed computing means the file is shared across many computers or servers. If a particular copy of it does not match all other copies, the data in that file is invalid. This adds another layer of protection, which means that no one other than the person who controls the data can access or modify it without the permission of the person who owns it or the entire distributed network.

Together, these concepts mean that data can be stored in such a way that it is never under the control of the person who owns it, even if it happens to be stored on a server owned by or under the control of a company. of a local government. The owner or the government can never access or modify the data without the encryption keys that prove ownership. And even if they shut down or delete their server, the data is still accessible on any of the hundreds of other computers where it is stored. Pretty smart, right?

Other important concepts often used in relation to the technical infrastructure of web3 is that it is open, meaning largely built on open source, trustless, and permissionless software.

Trustless means that interactions and transactions can take place between two parties without the need for a trusted third party. This was not necessarily the case on web2 or below, as you had to be sure that the owner of the medium you were using to interact or transact was not manipulating your communications.

A good example of a trustless web3 transaction would be sending Bitcoins directly to another person, not through an online exchange or a wallet stored on a centralized server. The whole process of making the transaction is controlled by the blockchain algorithm and encryption, and there is almost no chance that anyone can interfere and disrupt it.

Similarly, “permissionless” means that neither party to a transaction or interaction needs to seek permission from a third party (such as a service provider or government) before it can take place.

By the way, if you think all this talk about avoiding government interference sounds a bit lawless or libertarian, then you’re not alone! There are still big questions to be answered about the implications this lack of oversight or oversight has for safety and legality. We have already seen governments attempt to create legislation that will allow them to maintain some level of control over communications and interactions on the Web3. This includes indications from the UK government that it would like to regulate citizens’ ability to send end-to-end encrypted messages.

Web3 concepts – the DAO

Decentralized Autonomous Organization (DAO) is a web3 concept describing a group, company or collective bound by rules and regulations encoded in a blockchain. For example, in a DAO-based store, the price of all items, as well as details of who would receive payments from the business, would be kept on a blockchain. DAO shareholders could vote to change prices or who gets the money.

However, no individual can change the rules without permission to do so. And no one who owned the physical infrastructure, like the owners of the servers or the owners of the facilities where the profits were stored, could interfere in any way, like running off with the receipts!

Basically, DAOs – in theory – entirely eliminate the need for many of the “middle men” needed to run an organization – such as bankers, lawyers, accountants and owners.

Artificial intelligence (AI) and web 3.0

Most people believe that AI will play an important role in web3. This is due to the heavy involvement of machine-to-machine communication and decision-making that will be required to run many Web3 applications.

How does metaverse integrate with web3?

The last important web3 concept we need to cover is the metaverse. When it comes to web3, the term “metaverse” covers the next iteration of the Internet’s front-end – the user interface through which we interact with the online world, communicate with other users, and manipulate data.

Just in case you missed all the hype – the idea of ​​the Metaverse is that it’s going to be a much more immersive, social, and persistent version of the internet that we all know and love. It will use technologies like virtual reality (VR) and augmented reality (AR) to pull us in, allowing us to interact with the digital realm in more natural and immersive ways – for example, using virtual hands to pick up and manipulate objects, and our voices to give instructions to machines or talk to other people. In many ways, the metaverse can be thought of as the interface through which humans interact with Web3 tools and applications.

It’s possible to build Web3 apps without the metaverse being involved – Bitcoin being one example – but it’s believed that metaverse technology and experiences will play a big part in how many of these apps will interact with our lives.

It all sounds great, and everyone has to like it, right?

Well, actually, no. It’s worth mentioning that there have been quite a few high profile reviews on web3. Elon Musk made several comments, including stating that it “sounds more like a marketing buzzword than reality right now” and tweeting, “Has anyone seen web3? I don’t do not find.”

Former Twitter CEO Jack Dorsey, meanwhile, wondered if it would be as free and open as many hope. He said, “You don’t own web3. The VCs and their LPs do. It will never escape their incentives. It’s ultimately a centralized entity with a different label.”

Others don’t like the current proposals for web3 very much due to the fact that they are built on blockchain, which can sometimes be very energy-intensive, contributing to carbon emissions and climate change. The Bitcoin blockchain, for example, is estimated to consume roughly the same amount of energy as Finland. Other blockchains, such as those built on proof-of-stake algorithms rather than proof-of-work, are not as power-intensive.

Some examples of web 3.0 applications

Let’s look at some examples of web3 in practice:

Bitcoin – The original cryptocurrency has been around for over a decade and the protocol itself is decentralized, although its entire ecosystem is not.

Diaspora – Decentralized non-profit social network

Steemit – Blockchain-based blogging and social media platform

Augur – Decentralized exchange market

OpenSea – A marketplace for buying and selling NFTs, itself built on the Ethereum blockchain

Sapien – Another decentralized social network, built on the Ethereum blockchain

Uniswap – Decentralized Cryptocurrency Exchange

Everledger – Blockchain-based supply chain, provenance and authenticity platform

To learn more about the business and technology trends that are transforming businesses today, sign up for my newsletter and check out my books’Business trends in practice: 25+ trends that are redefining organizations‘ and ‘Extended Reality in Practice: 100+ Incredible Ways Virtual, Augmented, and Mixed Reality are Changing Business and Society‘.

About Shirley L. Kreger

Check Also

Examples of Good Retail Customer Service

It’s a known fact that retail businesses must provide excellent customer service to be successful. …