Web 3.0 is all everyone is talking about. But what is it exactly? Web 3.0 refers to the next generation of the internet in which websites and apps will be able to handle data in a human-like manner using technologies like blockchain technology, Big Data, and machine learning, among others.
It has been dubbed the Semantic Web by Tim Berners-Lee, the World Wide Web inventor. The goal of Web 3.0 is to create a more autonomous, intelligent, and open internet. Now, let’s check out the internet’s evolution through the years:
Web 1.0
In 1990, Berners-Lee pioneered the early development of the internet with HTML, URL, and HTTP as the foundation of the web.
Web 1.0 was all about static and non-interactive web pages, a top-down approach toward information dissemination. Here, users’ role was somewhat limited. Characterized as a read-only web experience, it was at this time that content creation took its very first steps.
In this era, interactive applications weren’t a thing until online banking became popular and called for improvements.
Web 2.0
A step above Web 1.0, here we not only consume content but also create our own and publish it on blogs, Internet forums, and marketplaces. The emergence of social media platforms then sent content sharing to new heights.
The current version of the internet or Web 2.0 is characterized by social media platforms, which allows the more significant proliferation of user-generated content.
It was in this era that the internet became more social. As we are seeing today, Internet users are more connected than ever through social networking sites leading to the creation of tons of content and data.
This proliferation of social networks and the ubiquity of mobile devices and access to mobile internet has spurred the growth of giants like Instagram, YoutTube, TikTok, and WhatsApp.
As a result, a handful of big tech companies, namely Facebook (now Meta), Twitter, Google, Apple, Amazon, and Microsoft, are controlling the world wide web. They are the ones who control how our data is used and where it is stored. The algorithms created by them are further deciding the information that we consume.
While these platforms recorded phenomenal growth in their revenue, this value hasn’t really trickled down to users. Not to mention, this has created privacy issues, costing users their freedom.
Web 3.0
Under Web 3.0, creators and users will share value. This user-owned economy is also open, fair, and transparent.
It is being touted as a movement that will bring back the control of the internet from big tech companies back to the users.
Instead of our data residing with these centralized organizations, Web 3.0 aims to store the data securely and distribute it across many devices, moving the need for centralized servers and effectively owned by users themselves.
It also reduces the risks of massive data leaks by removing the central point of failure — making it more resilient to compromise.
In Web 3.0, there is no need for an intermediary, a trusted third party. Instead, everyone can participate in a trustless environment.
This third-generation internet is the next evolution of the World Wide Web that provides a data-driven Semantic Web employing a machine-based data understanding to develop a more intelligent and connected web experience for users.
Unlike today’s web, which is static and unable to adjust to the individual needs of each person experiencing it, Web 3.0 promises to be more dynamic and interactive.
By implementing artificial intelligence (AI) and blockchain technology, it aims to redefine the web experience with structural changes to ensure decentralization, democratization, and transparency across all aspects of the internet.
It is expected to help overcome the problems of Web 2.0, just as Web 2.0 did with Web 1.0. This evolution will make content accessible to all with a focus on privacy and security.
In this next phase in the evolution of the internet, the idea is to disrupt the current centralized environment by building upon open-source concepts, decentralization, transparency, trustlessness, and ubiquity.
Web 3.0 is currently being built on blockchain technology, which is an electronic distributed ledger maintained without a central authority.
Blockchain uses a distributed consensus to make the system secure, for which the network participants are rewarded. Cryptocurrencies, decentralized finance (DeFi), and NFTs projects run on blockchain technology.
Besides computers being able to understand information just like humans, smart contracts will play an essential role in this new iteration of the internet—these self-executing contracts stored on a blockchain run when predetermined conditions are met.
The features of this Web 3.0 include:
Semantic Web: It is basically the web of linked data. The Semantic Web is an extension of the existing World Wide Web that improves the abilities of web technologies to generate, share and connect content through software programs with machine-interpretable metadata of the published data and information.
Artificial Intelligence: AI provides a cognitive layer to bring “smartness” to the web.
By combining semantic capabilities with natural language processing (NLP) technology, computers can understand information similarly to humans to provide faster and more relevant results, thus becoming more intelligent to satisfy users’ needs better.
Machine learning and artificial intelligence algorithms have advanced to make valuable predictions and acts.
Virtual reality: VR is a computer-generated environment for users to formulate, publish and monetize digital content. In this projection of reality, users interact with each other in a 3-D setting. Companies are already holding official meetings, games, entertainment, and trade shows in these VR spaces.
Three-dimensional design: An extension of two-dimensional transformation, 3D graphics are used extensively in websites and services in Web 3.0. It involves computer games, museum guides, eCommerce, and geospatial contexts.
Customization: Web 3.0 is all about providing users with a more personalized experience. For instance, the payment infrastructure of web3 gives its users more autonomy and freedom to transact freely within a secure and transparent environment.
And in the gaming industry, players are being offered new character customization options.
Connectivity: It is the state of being interconnected, and thanks to semantic metadata, information is more connected in Web 3.0. As a result, the user can leverage all kinds of available data that allow them to experience a new level of connectivity.
Ubiquity: In Web 3, it is essential that anyone can access the internet and its services at any time from anywhere in the world, that too, through any number of devices, instead of relying on just computers and smartphones. The growth of IoT devices aims to take the ubiquity of Web 2.0 to new levels.
Network: This new open and permissionless Internet is all about the collaborative effort. Users trust the technology to perform these tasks rather than trusting someone else to execute services or manage funds in open-source projects.
As such, users can interact in real-time thanks to decentralized networks with no single entity controls.
Where Does Crypto Fit in Here?
Blockchain, cryptocurrency, non-fungible tokens (NFTs), and metaverse are crucial components of Web 3.0 that are fueling this future.
Last year, the social media giant Facebook realized that this is the future of the internet and rebranded the company to Meta to reflect its long-term vision of virtual reality. Now, others are rushing in as well.
Blockchain has actually paved the way for the participants of a network to hold and transfer value in a digital native format, becoming the driving force of this next-generation internet.
The technology provides a unique state layer and enables peer-to-peer transactions without intermediaries.
This revolution started with Bitcoin and was then taken forward by Ethereum by introducing smart contracts leading to the rise of DeFi, NFT, DAOs, and the Metaverse.
Tokenization: One of the critical innovations of Web 3.0 is the digitization of assets and rights via tokenization.
Cryptocurrencies are fungible tokens that can be exchanged across networks easily. It is driving a new business model that aims to revolutionize the traditional finance system and bank the billions of the world’s unbanked. Over this past decade, the cryptocurrency market capitalization has reached $3 trillion.
DeFi: Decentralized finance is a shift from the traditional financial systems to peer-to-peer finance. It is being completely rebuilt from the first principles focusing on transparency, interoperability, and security. Due to being fast-moving, DeFi can bring solutions much faster to the user.
The main features of DeFi include permissionless, programmability, transparency, immutability, and fast-paced innovation.
Some popular DeFi projects are lending protocols – Maker and Aave, DEXs – Uniswap and Balancer, derivative platforms – dYdX and Synthetix, staking platform Lido, and predictions market Augur. Meanwhile, the DeFi sector has amassed more than $200 billion over these past couple of years.
Non-Fungible Tokens: NFTs, on the other hand, are non-fungible tokens meaning one can’t be exchanged for another. They are data units representing unique assets such as art, collectibles, music, in-game items, avatars, and more.
For the first time ever, NFTs have made digital ownership verifiable, as such allowing for digital scarcity. CryptoPunks and Bored Ape Yacht club (BAYC) are the most successful Profile Picture NFT (PFP) projects so far.
Metaverse: As for metaverse, it is a virtual world where users can connect, interact, and transfer their products, services, belongings, and even themselves across multiple digital locations seamlessly.
Currently, companies around the world are developing tech — virtual reality (VR), augmented reality (AR), and brain-computer interfaces (BCI) — that will shape the future of the metaverse. Axie Infinity, The Sandbox, and Decentraland are some of the well-known names in the metaverse sector.
DAO: Decentralized autonomous organization (DAO) is another component that is made up of member-owned communities without centralized leadership. Instead of using free tech platforms in exchange for data, users can participate in the governance of the protocols here and get to decide its future.
These democratized organizations are a great way to collaborate with internet strangers and commit funds to a specific cause.
Challenges to Web 3.0
While there are tons of benefits of Web 3.0 in the form of data ownership, fewer intermediaries, transparency, personalized experience, and uninterrupted services, it has its limitations. Let’s take a look at them:
Learning Curve: As we see with blockchain technology, especially DeFi, it may be a bit complicated to understand for beginners and involve a steep learning curve. User experience is of utmost importance and requires intuitive interfaces, but the crypto sector has yet to solve this problem.
Not to mention existing web browsers do not support direct access to Web 3 experiences and require a wallet like MetaMask or Phantom. You not only need educational content and training but also have to go through a time-consuming and cumbersome process to get started.
Upgrade: This new iteration will make Web 1.0 websites outdated, and as websites and applications in Web 3.0 become popular, existing ones will face pressure to have an upgrade.
Moreover, with the use of blockchain, AI, and machine learning, less advanced devices will not be able to handle Web3, requiring users to have a device that has above-average specifications.
Scalability: A significant issue with Web 3 networks is that transactions here are slower, making sense. Instead of one centralized authority handling the processing and approval, the system is decentralized and goes through the entire peer-to-peer network.
As such, the computing power involved is high, and transactions are not near-instantaneous.
For instance, Ethereum can only handle 15 to 30 transactions per second (TPS), while Bitcoin can only do about 5. However, Ethereum is already working on scalability through a shift to ETH 2.0 and sharding.
Also, new blockchain networks like Solana and Avalanche can handle much higher TPS though that can come at the cost of decentralization.
Cost: While the blockchain was supposed to bring down the cost, the opposite has been happening. The tech is actually turning out to be extremely expensive due to its decentralization nature.
But much like scalability, the industry is working on bringing down the cost and, in many instances, especially involving vast amounts of money, is already pretty cheap compared to traditional banking and payment systems.
This is unlike the traditional giants, who are also working on controlling Web 3.0. Recently, Facebook CEO Mark Zuckerberg shared that Meta plans to let creators sell “virtual items and effects” in the metaverse. Still, the company will be keeping a hefty cut of nearly 50%.
Regulation: According to some experts, the decentralized nature of Web 3.0 will lead to difficulties in monitoring and regulating this internet.
As a result of which, there could be a rise in cybercrimes. However, as usually happens with the new developments, especially tech, it takes time for the regulators to catch up to all the innovation.
With crypto, it can be even more so, given that the industry is very fast-paced compared to traditional systems.
Accessibility: While many parts of the world are working on Web 3.0, there are still sections of the developing world where Web 1.0 and Web 2.0 have yet to reach.
This evolution of the web further requires mass-scale hardware upgrades to both servers and end-user devices as current devices are not prepared for the Web3 revolution.
How to Invest in Web 3.0?
Investing in Web 3.0 can be as simple as buying cryptocurrencies. Other ways to invest in the future on Web 3.0 include funding start ups that are building in the blockchain space.
For beginners that want to invest in Web 3.0, the best bet is to buy Bitcoin or Ethereum.
Watch the video to know all about Web3:
Final Word
We are heading towards the new era of the internet where people will have improved privacy and complete control over their data which is all powered by blockchain, while organizations become intrinsically more resilient.
It will fundamentally expand the scale and scope of both human and machine interactions, enabling a whole new wave of business models.
In Web 3, ownership is represented through tokens or cryptocurrencies, which grants its users a say over the network. Everything from a meme, a piece of art, a tweet, or tickets can be tokenized here.
Overall, this evolution of the internet aims to expand data connection, change human collaboration, increase peer-to-peer connectivity, reduce dependency on intermediaries, and be more dependable and personalized.
This will allow societies to become more efficient and return the value directly to the network’s users and suppliers.
But of course, the criticism has aroused over its ownership, with some like Twitter co-founder and former CEO Jack Dorsey arguing that it is concentrated in the hands of early adopters and venture capitalists.
No doubt, Web 3 has its problems, but despite all the challenges, as we saw, it has a lot of potential that could benefit the masses by offering open, permissionless, and trustless networks. It is basically a system for users, designed by users.
Web 3.0 is moving at an impressive pace, with its mass adoption happening faster. It took more than 50 years for automobiles to achieve mass adoption, but the internet took half that time, and now the open and permissionless web won’t take even that time.
But while innovation is happening much faster, we still have a long way to go.
