Released in 1993, the centralized World Wide Web gave birth to a new way of thinking about the world, where individuals could interact and communicate with one another without having to be in the same place physically.
This paradigm shift was so impactful that it has been dubbed one of the most influential inventions of the 20th century.
But this massive, centralized infrastructure became a victim of its own success—a relatively small group of actors now control the overwhelming majority of web traffic, which has led to concerns about censorship, data breaches, and privacy violations.
Then came along Web3—a decentralized web that puts users in control of their own data.
By using peer-to-peer technologies instead of relying on central servers, Web 3.0 allows users to interact directly with one another without a middleman.
This not only gives users more control over their data, but it also has the potential to create a more open and accessible internet for everyone.
But what is Web 3.0? Let's examine how it works and how it could impact the world as we know it.
Before we dive into Web3, let's take a brief look at how we got here.
In the early days of the internet, there was only one way to access it—through a desktop computer connected to a physical network of wires.
This read-only version of the web was limited to text and hyperlinks, and it was primarily used for academic research and sharing information.
Web pages were static, and there was no way to interact with other users or create content yourself.
Webmasters created and updated web pages manually, which made it difficult to keep up with the rapidly changing landscape of the internet.
In the '90s, web browsers like Netscape Navigator and Internet Explorer began to emerge, making it easier for users to access the internet.
In the late '90s, we saw the birth of online shopping, social networking, and blogging, which laid the foundation for Web 2.0
The first decade of the 21st century was a period of explosive growth for the internet. By 2005, over one billion people were using the internet, and we had entered the era of Web 2.0.
With the birth of Web 2.0, the internet became a more interactive and user-friendly place. People could now create their own content, share it with others, and interact with one another in real time.
Social media platforms like Facebook, Twitter, and YouTube emerged, giving people a voice and a platform to share their thoughts and ideas with the world.
Simultaneously, the rise of smartphones and tablets created new opportunities for people to access the internet on the go. Apps like Uber and Airbnb disrupted traditional industries, and we began to see the power of the internet as a tool for social change.
As time progressed, the centralized nature of the web became more apparent. A small group of companies came to control an increasingly large amount of web traffic.
By 2014, Google controlled an estimated 85% of all search traffic and Facebook quickly became a dominating force in the social media landscape.
As we continued to entrust more of our personal data to these central authorities, concerns about privacy and censorship began to mount.
According to a recent tweet from Jack Dorsey, Twitter's co-founder, "centralizing discovery and identity into corporations really damaged the internet." Now, Dorsey is working to decentralize Twitter with a new protocol called Bluesky.
As we move into the next decade, it's clear that the centralized nature of the web is no longer sustainable. The time has come for a new decentralized web—one that puts the people in control of their own data.
The term Web 3.0 (Web3 for short) was first coined in 2014 by Ethereum's co-founder, Gavin Wood.
So, what is web 3.0? Wood described it as "an inclusive set of protocols to provide building blocks for application makers." In other words, Web3 is the next immersive and decentralized iteration of the internet. Web3 enables developers to build decentralized applications (dApps).
These dApps are powered by blockchain technology, which allows them to run without the need for a central authority.
This means that users can interact without giving away their personal data, and they're also less susceptible to censorship.
With decentralization and blockchain technology, Web3 builds on the issues that are prevalent in Web 2.0, including data privacy, security, and censorship. While it’s still in the early stages of development, we can think of the meaning of Web3 as a set of protocols and technologies that aim to create a peer-to-peer, decentralized internet. The middleman is becoming less and less relevant.
These protocols include the likes of IPFS, DNS, and ENS. Together, they provide the building blocks for developers to create dApps or decentralized applications. Simply put, an application that is developed ‘onchain’.
There are four core principles that Web3 is built upon:
To tech fanatics and crypto gurus, the value of Web3 is clear. But what is Web3 for the average person?
Here are some of the ways Web3 can impact the world as we know it:
dApps have the potential to change the way we interact with the internet, and they hold immense promise for several industries.
The music industry, for example, is already beginning to explore the use of blockchain technology to create dApps that allow musicians to connect directly with their fans and get paid for their work.
Similarly, in the publishing industry, there's a growing movement to create decentralized alternatives to platforms like Amazon Kindle and Apple Books.
There are marketplace dApps that allows people to buy and sell digital goods, like crypto collectibles and in-game items. This technology can be used to create any sort of application that you may be familiar with in Web2. What is holding some companies back is the relinquishing of control. Control of applications also means being able to moderate, improve, and enhance them. Many companies who are proponents of Web3 but still require a degree of centralization or reliance on existing servers drop into a category many refer to as Web 2.5. Applications that empower blockchain technology and transactions but are not fundamentally dApps, for example, most metaverses.
Although Web 2.0 allows for user-generated content, its read-write permissions have limitations.
For example, when you create an account on Facebook, you give the company access to your personal data. You're also entrusting Facebook with the task of maintaining your account and keeping your data safe from hackers.
Unfortunately, as we've seen repeatedly, centralization comes with its own set of risks.
Facebook has been involved in several privacy scandals, including the spread of COVID-19 misinformation and the infamous Cambridge Analytica scandal. And other social platforms have come under fire for censorship—just think about the time Twitter censored #Gamergate.
Web3 on the other hand has no central authority controlling the platform. This means it's powered by blockchain technology, which allows people, to interact with each other directly.
As we mentioned above, centralization can lead to censorship. When there's only one entity controlling the platform, that entity has the power to decide what content is and isn't allowed.
This level of control opens the door for all sorts of abuse, like political censorship and discrimination. Google has been increasing search censorship and those who use social media have probably noticed an uptick in content moderation.
Seemingly hand-picked account bans and search results blacklists are just a few examples of how centralization can be used to silence certain voices.
At a time when creators have more power than ever, Web3 rebalances the power dynamics between users and platform providers. Since there's no central authority, the people are in control of the content that's published.
Web3 goes far beyond direct user-to-user interactions. It's also about giving people a say in the development of the platform itself.
This is made possible by protocols like DAOstack, which enable the creation of decentralized autonomous organizations (DAOs). These organizations are community-driven and allow for collective decision-making and investing.
What does this mean for you? Well, if you use any Web3 app, you could have a say in how the app is developed. For example, if you're using a dApp to manage your finances, you could help decide which features are added or removed.
This kind of reaction to market dynamics is not possible with Web 2.0, which relies on scale and network effects to maintain its monopoly and, in turn, lack of action.
Web3 apps are powered by smart contracts, which are self-executing contracts that enforce the terms of an agreement between two parties.
Smart contracts make it possible to buy and sell things without the need for a third party, like a bank or government. This not only makes transactions faster and more efficient but also reduces the costs associated with traditional payment methods.
Smart contracts are also immutable, which means that once a contract is created, it can't be changed. This adds an extra layer of security and helps to prevent fraud.
In a creator-driven economy, Web 2.0 fails to level the playing field for all. Instead, it strongly favors those with the most followers or views.
In 2021, an anonymous hacker leaked two years' worth of Twitch's creator earnings, revealing that just a few creators earn nearly all of the revenue on the platform—by design. Platforms like YouTube and Instagram have also been criticized for their lack of transparency when it comes to how they distribute revenue.
Web3 dissolves silos between creators and their audience, making it possible for anyone to be a creator. Platforms like DTube use tokens, NFTs, and digital payments to fairly compensate creators based on the attention they receive from viewers. This not only helps to promote creativity but also ensures that all creators are fairly compensated for their work.
Although Web3 is quickly becoming more popular, there's still a long way to go before it reaches mass adoption.
A few of its biggest limitations include:
Perhaps the clearest barrier to adoption is the user experience. Many people find creating wallets and buying crypto incredibly intimidating, even if relatively simple. Just as opening a bank account to yield credit likely felt scary to those used to carrying physical cash around. A new era of banking is fundamentally tied to the emergence of web3 technologies across every business sector.
To use Web3 platforms, an individual must understand how to use digital wallets, purchase cryptocurrency, and interact with smart contracts in addition to comprehending the platform itself.
This is a lot to ask of the average person, which is why user experience needs to be a top priority for Web3 developers if they want to see mass adoption of its applications.
This is why metaverses are being looked to as a means of facilitating transactions for creators and community activities for projects or DAOs. Metaverses create a compelling gateway experience often bridging the gap between web2 protocols we are comfortable with and the complicated algorithms that make web3 decentralization possible.
Although features like Sign-In with Ethereum are available to everyone, transaction fees (also called gas fees) are still incredibly expensive. Since they are a function of network demand vs. network capacity, they are subject to the same kind of volatility as cryptocurrency prices and demand. This will slow its adoption, particularly in developing nations with fewer wealthy individuals.
Web3 on its own isn't difficult, but it's a foreign concept to most people. For it to reach mass adoption, there needs to be a greater effort to educate the general public about what it is and how it works.
Every kind of innovative technology faces this same dilemma. It's not enough to build something new—educational initiatives are critical to ensure mass adoption.
Discord, GitHub, and other popular applications that Web3 developers rely on are centralized. Web3 innovators are working to deliver new solutions that fill this void, but doing so takes time.
In spite of its challenges, the future is bright for Web3. In 2022 alone, the Ethereum merge, an increasing number of downloadable apps, and growing interest from major corporations suggest that it's poised for significant growth. And with a growing number of people working on solutions to its limitations, it's only a matter of time before this technology reaches mass adoption.