Web3 has become the next big thing among technologists and business leaders in the past year. Internet in its most recent iteration. The central idea of Web3 development as a whole is decentralization based on blockchain technology, even though there has yet to be a clear agreement on how Web3 should be defined. Its supporters hail it as a paradigm shift that has the potential to fundamentally alter how the internet, businesses operating online, and the online economy function. It is even more alluring because it is related to the idea of the metaverse. We’ll explore and comprehend the concept in this blog.
Why is Web3 called Web3?
Web3 supporters see it as the next step in the web’s evolution. Web 1.0 refers to the revolutionary but largely static web pages-based early internet of the 1990s and early 2000s. End users were content consumers to create content, and a website had to be set up and hosted. With the advent of Web 2.0 in 2004, users were able to create and publish content using a variety of platforms, including social networks, blogs, wikis, etc. However, it also resulted in large corporations controlling the internet, data, content flow, and the digital economy while enabling users to be innovative and creative. Users, startups, and other groups have rebelled against this hegemony in recent years. Thanks to the rising popularity of blockchain technology and decentralization, the internet has been reimagined as a truly decentralized internet or Web3.
Although the terms Web3 and Web 3.0 are sometimes used interchangeably, Web3 is distinct from Web 3.0, which Sir Tim Berners-Lee, the creator of the World Wide Web, years ago, first used. Since it envisioned a web with machine-readable language so that data could be “understood” by machines based on the context or metadata provided, the latter is also known as the Semantic Web. Though the emerging Web3 is very different from the Semantic Web concept, some ideas are still present. Although Web3 is in line with Berners-plan Lee’s to wrest control of the web from the big tech companies, blockchain technology continues to be the idea’s driving force. It has the support of the cryptocurrency communities. Gavin Wood, a co-founder of the Ethereum blockchain, coined the term “Web3.”
The Core of Web3: Decentralization
One of the fundamental differences between Web3 and its forerunners in terms of architecture and infrastructure is decentralization. Web 2.0 saw more dynamic and user-generated content and interaction than Web 1.0, which was dominated by static pages. However, the platform is provided by third parties and is typically owned by tech behemoths like Meta (formerly Facebook), Twitter, and Microsoft. Blockchain technology allows storing data in Web3 in a distributed manner. In the blockchain, data is encrypted and held across a decentralized network of computers. Data can’t be changed because copies exist throughout the web; if one copy differs from the others, it is invalid. This additional layer of security enhances the architecture.
Therefore, regardless of where the server containing the data is physically located or whose it is, unless the owner of the data consents or there is a network-wide agreement, the owner is the only person who can access or modify the data. Additionally, it is permissionless, which means that no third party’s consent is needed for a transaction to be completed. The parties to a transaction also don’t need a third party to verify their trustworthiness because every transaction is secure thanks to the blockchain algorithm and encryption.
NFTs, cryptocurrency, and DAOs
The fact that the cryptocurrency community has given Web3 much support suggests that cryptocurrencies like bitcoin and NFTs (non-fungible tokens) will be important components of the new internet economy. Decentralized Autonomous Organizations (DAO) are groups or businesses that lack conventional management structures. The DAO operates following the regulations written into the blockchain, which may encourage entrepreneurship and innovation. These organizations would be autonomous, transparent, and collectively owned by shareholders. This would allow for the creation of businesses more quickly and without the need to navigate bureaucratic red tape or rely on big tech platforms. This would make creating decentralized apps (Dapps) easier, which is crucial for running the DAOs because fees are paid in tokens.
Metaverse and AI
Web3 relies heavily on machine-to-machine interactions and autonomous decision-making, so artificial intelligence (AI) is a key technology element. AI algorithms can perform various tasks in place of humans, which is very much in line with Web3 trends. The metaverse, a network of virtual worlds where users can interact using 3D avatars for most collaborative and social activities, is predicted to be the next iteration of the web, similar to Web3. While Web3 technologies like blockchain, cryptocurrencies, and NFTs can serve as the foundation and promote interoperability, Web2 technologies like Virtual Reality (VR) and Augmented Reality (AR) can offer an immersive and persistent internet. In many ways, Web3 technologies and AI provide the infrastructure and applications, with the metaverse serving as the front end.
Web3 applications already exist, but it is still being determined whether the idea will become widely adopted in its present form. The core of the vision is autonomy and decentralization, but whether governments and regulatory bodies will permit them is the crucial question. Safety, security, and legal concerns would always arise without oversight and control, which is already a major concern. Elon Musk and Jack Dorsey, the former CEO of Twitter, have also expressed concerns about Web3 game development being truly decentralized and not just a marketing gimmick to give control to venture capitalists (VCs). Blockchains are known to be energy guzzlers that adversely contribute to climate change, so further adoption of the technology may hurt the environment. This is yet another argument against Web3.
In the end, each paradigm shift faces a unique set of difficulties as it develops. While many companies are still investigating the possibilities, some are already implementing Web3 technologies to stay ahead of the curve. Business leaders who are looking ahead must get ready for Web3 and get their teams on board.