Web 3.0 or Web 3 (A.K.A decentralized web) is the term used to describe the third evolution of web technologies and applications. As the name suggests, it is a vision of a decentralized, user-centric, and participatory internet in short. In more expressive terms however, Web 3 envisions a new era of the internet where users have more control over their data and interactions, unlike the current Web 2, which relies on centralized platforms. Web 3 operates through decentralized technologies like the blockchain, emphasizing privacy, security, and user ownership of data, allowing individuals to interact directly without intermediaries. With these technologies, digital identities would enable secure online personas and Smart contracts would automate agreements, ensuring trust without a central authority. Peer-to-peer networks and decentralized applications (dApps) would also replace traditional apps. So, in order to explain how all this could be powered by blockchain, first we need to understand what the blockchain is and what it can do.
What is blockchain?
The Blockchain is a distributed database that allows for secure, transparent, and tamper-proof transactions. It consists of a network of nodes that validate and record data in blocks that are linked together by cryptography. Each block is meant to contain a timestamp, a hash of the previous block, and a set of transactions.
Blockchain technology enables peer-to-peer transactions without intermediaries, such as banks or governments. It also enables smart contracts, which are self-executing agreements that run on code and can automate various processes and functions. So, how does blockchain enable web 3.0?
Decentralization: The Blockchain would ideally eliminate the need for centralized servers or platforms that control the data and services on the web. Instead, it would allow users to access and contribute to the web directly from their devices, without relying on third parties.
Ownership: It would also give users more control over their own data and digital assets, such as cryptocurrencies, non-fungible tokens (NFTs), or decentralized applications (DApps). Users would be able to store, transfer, and monetize their data and assets without intermediaries or fees, which is currently a hot topic, as organisations have been known to tally user data in large quantities for monetization and insights.
Incentivization: Blockchain technology would help create a new economic model for the web, where users can earn rewards for their participation and contribution as opposed to the way it is currently. For example, users may be able to earn tokens for providing computing power, storage space, or content to the network.
Innovation: Blockchain technology could enable new types of applications and services that are not possible on the traditional web. For example, decentralized autonomous organizations (DAOs), which are collective entities that operate on blockchain rules and governance, without human intervention. Another would be, Decentralized finance (DeFi), which is a sector that offers alternative financial services, such as lending, borrowing, or trading, on blockchain platforms.
What are some examples of web 3.0 applications?
Although Web 3.0 is still in the very early stages of development and deployment, there are already many examples of applications and platforms that use blockchain technology. Some of them are:
Cryptocurrencies: Cryptocurrencies are digital currencies that operate on blockchain networks. They can be used as a medium of exchange, a store of value, or a unit of account. Some of the most popular cryptocurrencies are Bitcoin, Ethereum, Dogecoin etc.
NFTs: NFTs are unique digital tokens that represent ownership of any type of digital or physical asset, such as art, music, games, or collectibles. They can be created, bought, sold, or traded on various platforms, such as OpenSea, Rarible, or NBA Top Shot.
DApps: DApps are applications that run on decentralized networks, such as Ethereum or Binance Smart Chain. They can offer various functions and services, such as social media, gaming, e-commerce, or education. Some examples of DApps are Uniswap, Axie Infinity, or Decentraland.
DAOs: DAOs are organizations that operate on blockchain rules and governance, without human intervention. They can have various purposes and goals, such as managing funds, creating products, or supporting causes. Some examples of DAOs are MakerDAO, Compound, DAOstack or Gitcoin.
Web 3.0 is a new paradigm for the internet that aims to make it more accessible, user-centric, and participatory. Blockchain is one of the key technologies that will enable web 3.0 features and applications. Blockchain offers benefits such as decentralization, ownership, incentivization, and innovation to the web users and creators.