The increasing dominance of blockchain technology and cryptocurrencies has facilitated the rise of Web3, powered by decentralized networks. Designed to restore power to its users, this game-changing movement is signaling a paradigm shift in how we use the internet.
What is Web3?
Also known as Web 3.0, Web3 is the next phase in the evolution of the internet. Much like the creation of cryptocurrency, helped along by IoT ecosystems, the start of the metaverse, and the rise of non-fungible tokens (NFTs), the newest internet phase will be based on openness, decentralization, and greater utilization for its users.
In order to better understand Web3, we should first review past and current phases of the internet. Unlike the present Web2 phase, where apps and platforms are owned by centralized entities, such as large tech companies and corporations, the Web3 decentralized apps and platforms will be created, owned, and maintained by users. The coming Web3 version of the internet is expected to be more like the original Web1 phase than the current Web2. Dating back to the ’90s, Web 1.0 was the start of the World Wide Web, and just like Web 3.0 is expected to be, Web 1.0 was defined by decentralized protocols and individual users.
Understanding Web 3.0
To put it simply, Web 3.0 is a future, decentralized model of the internet, where users are owners. Rather than using free platforms and apps that collect user data, as with the current Web 2.0, Web 3.0 users will be able to participate in the development, operation, and governance of the protocols themselves.
In Web 3.0, ownership can be depicted by cryptocurrencies or digital tokens through decentralized networks known as blockchains. For instance, if you hold enough digital tokens or cryptos for a particular network, you could have a say over the governance or operation of that network. This is similar to the way shareholders use their stockholder voting rights in a company to vote on certain corporate actions.
Decentralization and Why It Matters?
As explained, the first days of the internet (web 1.0) were built on open protocols, which meant that people and organizations could grow their online presence knowing the rules of the internet game wouldn’t change later on. Massive web properties were born during this era, including Google, Facebook, Yahoo, Amazon, YouTube, and LinkedIn.
During the second era (Web 2.0), the big tech companies like Netflix, Amazon, Facebook, Apple, and Google built their services that outrun the capacities of open protocols. The record-breaking growth of smartphones hastened this trend as apps drove the majority of internet use. And so, users slowly moved from open protocols to the more sophisticated, centralized services.
The good thing was that billions of people could now have access to the internet and its products, but the bad thing was that it became harder for creators, startups, and others to build their presence without the risk of centralized platforms changing the rules on them, which would lead to them losing their audiences and profits.
On the other hand, the decentralized crypto networks align the incentives of network participants so they can work together toward common goals – the growth of the network and the appreciation of the token. This alignment is one of the main reasons why Bitcoin continues to flourish, even while other networks such as Ethereum have grown alongside it. Despite the advantages of the big centralized tech giants, crypto networks have a more attractive value proposition to developers and users. They are a powerful way to develop community-owned networks and provide a level playing field for third-party developers, businesses, and creators.
This is what Web 3.0 promises – the decentralized internet. A place where users and their devices can interact with value, data, and each other via a substrate of peer-to-peer networks and without centralized third parties. The COVID-19 pandemic has accelerated the trend towards Web 3.0, with remote working, eSports, the growth of VR, and the creator economy being part of this trend shift. Of course, the shift towards the Web3 ecosystem and decentralization will be messy, nevertheless, there is a clear technological, economic, and moral case to replace legacy institutions with internet-native decentralized alternatives.
Web 3.0 is the future of the internet, a digital place where we return to the individualized utility of Web 1.0, but this time it is based on blockchain technology, cryptocurrency, and digital tokens that can foster a decentralized internet. Instead of the large players of Web 2.0 capturing the majority of monetary value, Web 3.0 will replace the centralized entities with decentralized networks that distribute the value to users, creators, and developers. While Web 3.0 is still in its infancy, we can expect it will impact the investment community and the world’s economy in the years ahead.
Keep Reading the series about Blockchain, Crypto, NFTs, and Web 3.0. Why Blockchain Economy Matters for World Happiness
Join and support the World Happiness Metaverse with the Collection Happy x Dreamers.