The Internet is nearing crossroads. The problems we face today relate to a centralized computing model (top-down, data-driven, not necessarily human-centric) where information is managed by a limited number of private entities. That’s where Web 3.0 comes in, the future version of the internet built on decentralized networks and blockchain technology, giving more power back to the people.
In this blog, we discuss what is Web 3.0 and why it matters.
What is Web 3.0?
Web 3.0 is the newest iteration of the Internet that is built on blockchain technology. It has become a collective term for a new and better Internet vision. At its core, it uses blockchain, cryptocurrencies, and NFTs to return the power of ownership to users. Instead of using the present Internet with a centralized architecture, the world needs to move to new technologies based on decentralization, trustlessness, permissionless, and ubiquitous connectivity.
Web 3.0 allows you to not only read and write on the Internet, but also own a piece of it. There are some important core principles on which web3 is based. They are:-
- Decentralization: Many companies are able to censor certain things on their platform because they own it. In Web 3.0, ownership is distributed between developers and users. It is not being controlled and owned by a centralized entity for most of the Internet.
- Data Security: In Web 3.0, data is not stored in companies’ large data centers. It is saved in different storage networks in different locations, making it decentralized for the users. So, if databases on one node get lost, other nodes on the network will retain the data. This helps in preventing data loss.
- Permissionless: In Web 2.0, most of the important decisions are taken by a few selected people. Web 3.0 is inclusive, and everyone has equal access to the Internet.
- Decentralized payments: Web 3.0 facilitates the spending and transfer of money using cryptocurrencies without the traditional infrastructure of banks, payment processors, and third parties.
Why Does It Matter?
Here are some reasons why Web 3.0 matters:
Data Ownership
It gives individual users authority and ownership over their data. In Web 2.0, users’ information is withheld by tech companies. In Web 3.0 all the data, information, identity, digital assets, security, and transactions are being transferred back to users. In fact, they can participate in the governance and operation of the protocol as participants and shareholders, as well as customers and products.
Open, autonomous, and decentralized technology characterize the digital assets representing Web 3.0 within the Internet ecosystem, enabling a reliable infrastructure and eliminating intermediaries and centralized monopolies.
Decentralized Autonomous Organization (DAO)
The DAO model plays an important role in Web 3.0. It fits perfectly into the Web 3.0 concept of a digital economy based on blockchain and cryptocurrencies. Web3.0 can be viewed as a completely transparent and decentralized internet. Unlike traditional companies, DAOs involve all members in decision-making. Each member of the community has the same voting rights as any other member.
The DAO is technically defined as an agreement on a smart contract that automates decentralized decision-making for pools of tokens. Users with
tokens vote for resource usage with the automatic execution of the code for the voting results.
Nearly all blockchain-based projects work with open-source code. Today, from DEXs to NFT marketplaces and Metaverse, many dApps use a decentralized approach to manage their DAO. This includes DEXs such as Uniswap, Pancakeswap, and SushiSwap.
Before DAOs, Web3 sites were decentralized in nature, but not managed. This meant that developers could change the way the protocols worked at any time, including the rules encoded in smart contracts, without the approval of that crypto community.
However, many define many Web3 communities as DAOs. These communities have different levels of code and automation. Developers are currently investigating what DAO is and how it will evolve in the future.
Resistance to Censorship
For instance, YouTube and Facebook recently came under the radar of censorship during the U.S. Elections. Large numbers of online content were deleted, censored, and terminated by these platforms. Facebook shadow banned and terminated new Facebook Ads account users and asks them to submit their verification using government documents.
Secured Identity
Web 3.0 solves problems such as fraud and cybercrime by allowing you to control your digital identity using Blockchain. Ex- Ethereum addresses and ENS profiles. Ethereum addresses are secure, censorship-resistant, and provide a single login between anonymous platforms. These provide seed phrases with the help of which users can actively use their platforms without giving any personal details.
Decentralized Payments
Traditional payment systems involve central authorities, such as central banks, commercial banks, and governments. These powerful media have complete control and access to user data. There are inherent risks to data sharing, such as an intrusion into privacy and security challenges. These authorities have great power, but great power comes with great responsibility and can lead to long-term trust issues if misused.
With the blockchain payment system, you can easily and quickly monetize without physical accounting records. All the records are stored digitally.
Web 3.0 fundamentals suggest how it can serve as a transformative force for user experience and web design. People want to try new solutions and user interest in cryptocurrencies and NFTs are proving to be the same. However, the future of Web 3.0 also presents many challenges that must be overcome before it turns into full-fledged standard applications across the Internet.
The development of the Web 3.0 world has already shown how successful it will be in the future. Ensuring privacy and control over digital identities are important benefits for internet users.
It has a lot of room to grow with many projects gaining momentum with an aim to deliver real benefits, such as real estate or Metaverse game smart contracts. In a few years, Web 3.0 will take shape and evolve into a new human-centric Internet.