Everything You Need to Know About Web3

The internet, since its inception, has continued to evolve — and we all know that without the web, there’s no internet. More recently, you must have heard about the term “Web3.” We know the internet transitioned from Web 1.0 to Web 2.0 years back. So, what is Web3 exactly?

There are buzzwords all over the place that make things more confusing — like NFTs, Metaverse, Blockchain, DeFi, and so on. Even some people find it hard to understand what Cryptos are.

And now, there’s Web3 — which encompasses all those buzzwords. Is it really the future like it’s hyped to be? Or perhaps, it is just a motive driven by the crypto and NFT space.

Well, you’re about to see how Web3 began and what it means. Below, you will find everything you need to know. Let's begin!

Imagine an internet where users had control over their data and privacy. Or picture a scenario where no one has absolute control over the web. That is what Web3 is all about.

Web3 is an emerging web version where humans can interact with data and machines through artificial intelligence (AI), machine learning (ML), and decentralized technologies — like blockchain technology, cryptocurrencies, and NFTs.

Web3 is essentially the future of the web, and its core foundation will be the blockchain. The reason is to make the internet decentralized, and blockchain is the answer.

Take, for instance, if you want to pay for a meal in a restaurant and don’t have cash. You’ll have to pay with your card. The transaction between you and the restaurant will ideally be between your bank and the restaurant’s payment provider. You have no control over when or how the money is deducted; the bank does — this is how the current web version is centralized.

On a similar note, if it was possible for you to pay the restaurant without intermediaries like the bank — that is what decentralization is. It is a peer-to-peer (P2P) form of transaction that eliminates the control of financial institutions.

Blockchain is a solution that eliminates the control of Big Tech companies over users’ data through decentralization. All users’ data are encrypted on the blockchain, making it inaccessible to third parties — taking web control out of big companies like Google, Facebook (now Meta), Apple, and others.

Since cryptocurrencies and NFTs are built on the blockchain, it’s safe to say that Web3 is more of everything in the crypto and NFT space. Web3 also takes form in decentralized social networks like play-to-earn video games — where players are rewarded with tokens and crypto coins.

No one really knows what Web3 will look like in the future, but it’s clear the idea is an internet where the web is decentralized. And we sure hope these early signs are a fragment of what is to come.

Now that you have a basic idea of what Web3 is, it’s also worth noting how it works. Doesn’t it?

Let’s take a step back to how Web 1.0 and Web 2.0 work.

Web 1.0 was a read-only kind of web. Users could not interact with it as it was just static web pages. You can only read content on this web, and only people with the technical skills could create content on it — these were programmers and companies.

Almost a decade after Web 1.0 was created, Web 2.0 emerged in 2004 — this is the current version of the Web we still use today.

Web 2.0 is more interactive compared to its predecessor. It is a read-and-write type of web where users interact with one another. And shortly after, social media platforms and big tech companies were created.

However, these companies began to control and centralize users’ data — they monetized this data and began sharing user-generated content on the web. That is why, if you google “fast cars,” you’ll most likely start to see ads about cars on your social media pages.

Web3 aims to provide users with ownership of their data. It still uses the same protocol as Web 2.0, but its data is stored in decentralized applications — Blockchains. Many blockchains have been produced, but Ethereum remains the core blockchain for most Web3 projects.

There are some vital layers of Blockchain that make it decentralized.

Smart Contracts — Smart contracts are what make the blockchain immutable. They are programs stored on data blocks that execute agreements automatically when certain conditions are met. With this technology, transactions in the Web3 space are trustless, making cryptocurrencies and NFTs valuable.

Wallets — Just like wallets where you keep cash, Blockchain wallets are used to keep Cryptocurrencies and NFTs safe. There are many decentralized apps — DApps — on the blockchain where you can find wallets.

Most wallets have seed phrases that act like a key to unlock wallets. Trust me; you wouldn’t want those to get into the wrong hands.

Web3 is still developing, so we don’t have a complete overview of all its features yet. Nonetheless, there are some key features we already know of that set it apart. Here are three distinctive features of Web3:

As we now know, a peculiar phrase to Web3 is the fact that it is decentralized. With the technologies deployed in Web3, no one can access your data without your consent. So, you don’t have to worry about Instagram showing you ads related to your recent searches on the web.

Just like how the internet is accessible to everyone worldwide, Web3 is open to all; you only need an internet-enabled device, and you’re good to go.

All transactions in Web3 are anonymous and safe. There are no intermediaries, and transactions are seamless.

Web3 is still in its infancy, with many things to come. Conversely, some technologies and applications are already in use — here are some of what we’ve seen so far.

The way we transact has continued to evolve. From trade by barter to coins, to paper money, to card payments, and now to digital currency.

Cryptocurrency is one of the pioneer technologies created in Web3, and it remains a vital feature in the space.

Is there anything better than turning your piece of art or drawing into something digital and more valuable? No, right? Well, that is very true.

With NFTs, you can turn even your songs into a digital asset — and make more money selling those assets.

One thing about NFTs is that they are unique — once you create a copy, no one can have a duplicate or own it. Your assets are all stored on the Blockchain, making it secure.

In Web 2.0, financial institutions like banks and payment providers are the facilitators for transactions — they serve as intermediaries and processors for every transaction you make.

On the contrary, DeFi is a decentralized form of finance that removes the influence of financial bodies on transactions. You can send and receive Bitcoin, NFTs, and any other digital commodity without the need for intermediaries.

All payments are transparent and stored in a digital ledger across multiple nodes of computers on the blockchain network. The transactions are also very fast.

All applications built on the Blockchain network are decentralized applications. DApps run on smart contracts and execute operations autonomously.

There are multiple categories of DApps, including finance, exchanges (DeX), games, storage, development, governance, wallet, and so on.

Have you ever wondered if it’s possible for a group of people to create an organization that is solely driven by their goals, but they don’t have a central leadership? An organization without a leader, which still manages to achieve all its objectives — that is essentially what a DAO is.

A DAO is an organization of members in the crypto space that doesn’t have a central authority but uses smart contracts to execute all operations — their transactions are autonomous and are stored on the blockchain.

Members of the organizations usually make decentralized and collective decisions using resources — usually tokens — by voting. The votes are counted automatically by the codes on the agreed-upon smart contracts, and a decentralized decision is made.

We are slowly getting into a more user-privacy-oriented web courtesy of Web3. There are already early signs of an internet where people have full ownership of their data — and there are also many AI tools that will be integrated into the web to make it seamless for users.

Smart contracts and blockchain, the core foundation of Web3, have given us a glimpse of how decentralized, trustless, and secure the new web is and the unique features that separate it from the previous web versions.

So, while we’re still expecting further updates and upgrades to the web, it’s worth diving into it as the early signs show it will be a remarkable paradigm shift.