What is Web3?

What is Web3?
10 April 2024     656

What is Web3?

Almost everyone is now aware of the usual push and pull that is going on whenever some major turns are attempted in the internet sphere. Web3 is one such attempt. In a word, Web3 represents various decentralized technologies that make up a digital system.

The internet we navigate today, Web 2.0, is a landscape dominated by a select few tech giants. These corporations control vast troves of user data, dictating the rules of online interaction and profiting handsomely from the digital footprints we leave behind. Web3, however, proposes a shift – a decentralized internet where the power dynamic is flipped, placing users, not corporations, at the helm. Or at least that is the hope.


Decentralization

Web3 aims at decentralization achieved through the power of blockchain technology. Blockchains are shared databases that maintain a continuously growing list of records, called blocks. These blocks are cryptographically linked and distributed across a vast network of computers.

Web3 also tries to foster a more direct and democratic online experience by emphasizing peer-to-peer (P2P) interactions. Things like purchasing music directly from an artist, renting storage space from another user, or even managing your finances without relying on banks – all of this facilitated by blockchain technology. And that disrupts the current model where tech giants act as intermediaries, extracting value from user data and interactions.

a block pic

Decentralized Applications (dApps)

These dApps also can operate independently of any central authority, offering a diverse range of functionalities that challenge the dominance of traditional web services:

Decentralized Finance (DeFi): DeFi protocols aim to create a new, permissionless financial system. Users can borrow, lend, and trade digital assets directly with each other, bypassing traditional financial institutions and potentially unlocking greater financial inclusion for the unbanked and underbanked.

Social Networks: Decentralized social media platforms are emerging, giving users more control over their data and experiences. With that aim to challenge the data collection practices and potential but less severe censorship issues (e.g., app formerly known as Twitter) that plague existing social media giants. In more hopeful scenarios, users do not have to constantly worry how seemingly benign interactions can backfire on them.

a blockchain sketch

Web2 vs. Web3

The transition from Web 2.0 to Web3 represents a significant shift. Here is an overview of the key differences that redefine the way we interact online:

Control: In Web 2.0, large tech companies control the flow of information and user data. Web3 could focus on users through decentralized networks, trying to foster a more democratic online environment where users have more control over their online experiences. Of course this rarely works out as intended, but the potential is there.

User Data Ownership: Web 2.0 platforms often collect and monetize user data with limited user control. Web3 potentially proposes a model where users can own and control their data, potentially enabling them to monetize it directly or choose how it is used. This shift in ownership creates a more user-centric online environment. Though there is a serious danger of getting bogged down in a terms and conditions walls. Which is quite likely and would not really be any different from how things go in Web2.

Security: The more glaring issues with Web3 security concern consensus problems. I.e., if the majority want to screw someone over, they absolutely can. In this sense, the system is only as secure as the majority wills it.

Innovation: Innovation in Web 2.0 is largely driven by a few major players. Web3 is still relatively quite young, fostering a more open and collaborative environment.

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Challenges and the Road Ahead

Web3 holds potential, but it is still in its nascent stages. It seems several challenges need to be addressed for widespread adoption:

Scalability: Current blockchain technology faces scalability limitations, restricting the number of transactions a network can process efficiently. Developers are actively working on solutions like layer-2 scaling protocols to increase transaction throughput without compromising decentralization.

User Interface (UI) Complexity: Interacting with dApps and navigating the Web3 system can be technically challenging for users unfamiliar with blockchain technology and digital wallets. Simplifying user interfaces and creating more intuitive user experiences will probably be crucial for attracting the broader public to Web3.

Regulations: Web3 poses regulatory challenges for governments worldwide. Establishing clear and supportive regulatory frameworks is essential to foster innovation while mitigating the huge potential risks associated with digital assets and decentralized finance.

Ika

Ika