What is Web3?
New to the entire crypto and web3 space? No need to feel overwhelmed! Start your crypto journey by learning all about web3.
At the end of the lesson, you will be able to answer the following:
What is web3?
How did web3 evolve?
How does web3 work?
What are the characteristics and features of web3?
What is Web3?#Copy URL to this article section
You may have already heard of web3 while browsing the internet. This term is almost always associated with cryptocurrency.
Web3 and cryptocurrency
Web3, or sometimes called “web3.0”, is a term used to describe the technologies behind the newest kind of internet service where people can use blockchains and cryptocurrency. Simply put, it is a new and improved version of the World Wide Web.
In the web3 space, users can have control and ownership over their content rather than merely consuming them. Websites, apps, and platforms are completely decentralized, too. This means that they are not controlled by a single entity and are not hosted on a single server.
How did web3 evolve?#Copy URL to this article section
To understand web3 and how the idea came about, we need to take a look at the first and second versions of the World Wide Web.
In its earliest stages, the internet (or the World Wide Web) was just made up of websites with static webpages linked together. These pages were not interactive, and you could only read things and publish basic content for other people to read. This was the era of web1.0 that started around 1990 and lasted until around 2004.
GeoCities in web1.0 (photo taken from webdesignmuseum.org)
This is the current version of the Web, where users are allowed to upload their own content to sites such as social media, blogs, and networking services.
Furthermore, web2.0 platforms are usually owned and controlled by a single entity (e.g. Facebook/Meta, Google, Instagram). Even if users can interact with these platforms by uploading, sharing, and consuming content, only the executives of the companies have the final say in terms of the rules, who can participate, and what happens to the data.
Facebook on web2.0
Web2.0 platforms also have centralized data—this means that data is stored at a fixed location or a single server, and users have no choice but to trust the companies that handle their data. As such, if a server goes down, users will no longer be able to access their data. This is what happened when Facebook went down for 6 hours in October 2021.
Centralized servers for web2 sites
In web3, users can access connected data in a decentralized way (i.e. data is stored in multiple locations) while also being able to own the data or a portion of a platform. Furthermore, users can also take part in decision-making simply by owning a token. All of these are possible due to blockchain technology and decentralization.
Web3 also opens up doors for more advanced technology such as artificial intelligence and machine learning, as computers will be able to understand information in the same way that humans do.
Some examples of applications on web3 are MetaMask and OpenSea.
MetaMask on web3
OpenSea on web3
How does web3 work?#Copy URL to this article section
Web3 is built on technology called “blockchain.”
The Ethereum blockchain
Blockchain, sometimes known as “Distributed Ledger Technology” (DLT), is a public digital ledger or database distributed across the entire network of computers. This database is used to record and store any kind of data digitally, and these cannot be changed, hacked, or cheated.
For more information about blockchains, read What is a blockchain?
What are the features of web3?#Copy URL to this article section
Among the many defining features of web3, here are some of the most important ones: decentralization, ownership, transparency, trustlessness and permissionlessness.
Decentralization#Copy URL to this article section
In web3, data is no longer centralized in one server. Instead, they are stored in multiple computers or “nodes” simultaneously. These nodes make up the system that makes blockchain technology possible.
Due to the decentralized nature of processing and storing information, the data is less prone to massive security breaches. There is also less chance of servers crashing, websites being hacked, governments taking over, and/or enforcing censorship because data is no longer controlled by just one big entity.
Blockchain nodes are all over the world.
Ownership#Copy URL to this article section
Any member of the general public gets to own a part of a platform by simply owning a token that represents voting rights. Based on how many tokens you are holding, you get to have a say in what happens to the web3 platform or organization.
Transparency#Copy URL to this article section
The software in web3 is open source. This means that anybody can open and access the code that developers make. More importantly, with blockchain technology, all transactions done in web3 are recorded and viewable by anybody online.
Open-source code for transparency
Trustlessness and Permissionlessness#Copy URL to this article section
“Trustless” means that as a user on web3, you do not need to go through a third party in order to interact publicly or privately with the network. “Permissionless” means that you do not need permission from a governing body to participate.
These features are what make web3 appealing to users—it enables peer-to-peer interactions without centralized platforms and middlemen. web3 makes use of decentralized apps or “dApps” that run on blockchains or decentralized peer-to-peer networks.
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