According to a recent survey, cryptocurrency is widely considered the ‘future of money,’ and as you’ll see here, Web3 is the future of the Internet.
However, only 24% of people globally have heard of it. This means you can get a head start.
By learning about Web3, you’ll be able to navigate the evolving digital landscape, seize new opportunities, and participate in a more user-centric and equitable Internet.
Here, you’ll get an introduction to Web3 — you’ll learn what it is, why we need it, the benefits it’ll bring about, and more.
Web3 for Dummies: What Is Web3 in Simple Terms?
Simply put, Web3 is the next version of the Internet — a version that prioritizes people over platforms.
It uses decentralized technologies, like blockchain, to create peer-to-peer (P2P) networks where users own their data, participate in decision-making, and engage in secure and transparent interactions.
Comparing Web3 to its predecessors — Web1 and Web2 — is the easiest way to understand what it is.
Web 1.0 (1991 – 2004): Read-Only
Web1 was the first version of the Internet. It was known as the ‘read-only web’ since it mostly consisted of static websites owned by companies.
There was no logging in, leaving comments, analytics, or ad monetization. The introduction of Flash and JavaScript allowed for new features, but users remained consumers of information.
https://youtu.be/SzQLI7BxfYI?embedable=true
Notably, Web1 was created using open-source protocols like HTTP, TCP, and SMT. A protocol is a set of rules that computers use to communicate with each other.
These foundational protocols control how information and messages move on the Internet. And, because they were open-source, in Web1, anyone could use them to build applications or services for free.
Web 2.0 (2004 – Now): Read-Write
Eventually, developers used those protocols to build Web2. This version is known as ‘read-write’ because it allows users to create content instead of just consuming it.
In Web1, you’d have to maintain your own server to display your website. In Web2, companies, like Facebook and YouTube, started taking care of it for you.
To support these costs and make a profit, they began collecting user data, selling it to advertisers, and serving us targeted ads — in Web2, the user is the product.
Over time, a few companies,
All this has led to a few issues:
- There’s a serious (and unsettling) lack of privacy.
- Users are the ones creating content but they don’t own it or benefit from its monetization — they don’t even own their digital identity.
- Tech giants have too much power over what’s allowed or not in a vast part of the web.
- The current model requires too much trust — we need to trust that these companies act in the public’s best interest.
- Most Web2 platforms rely on closed APIs controlled by the platform owners — this means they aren’t open for others to see or build on, which has stifled innovation.
Web 3.0: Read-Write-Own
Web3 aims to solve those problems by embracing decentralization and restoring power to individuals.
At its core, Web3 is a vision for a better Internet for all. An Internet that’s:
- Permissionless: Everyone has equal access and no one is excluded.
- Decentralized: Users build, maintain, manage, and own the infrastructure, products, services, and platforms they use.
- Free and open: Much like Web1, Web3 is built on free, open-source protocols, boosting transparency and innovation.
- Trustless: Instead of depending on ‘trusted’ corporations and banks, incentives and economic mechanisms ensure participants act in the network’s best interest.
- Functional and accessible: Web3 will have advanced functionality and be easy to use just like Web2.
In the following sections, we’ll delve deeper into what Web3 is by exploring seven solutions it has brought to the table:
- Web3 is a response to the lack of online privacy in Web2
- Web3 is an identity layer for the Internet
- Web3 is a money layer for the Internet
- Web3 allows you to own what you create online
- Web3 eliminates the need for trusted third parties
- Web3 gives you co-ownership of the platforms and services you use
- Web3 makes it easy to set up cooperative governance and ownership
Web3 Is a Response to the Lack of Online Privacy in Web2
Currently, a handful of giant corporations own an untold amount of
Meanwhile, we have to trust that these companies will act in our best interest and hope that no data breaches happen.
But even the most established corporations with the very best cybersecurity systems get hacked. For example:
- In 2019, personal data from 530+ million Facebook accounts was stolen. Two years later, it was posted online.
- The adult-oriented social networking platform, AdultFriendFinder, was hacked in 2016 and data from 410+ million accounts was stolen. Considering the nature of the services offered on this platform, it was particularly damaging for victims.
- Cambridge Analytica obtained the data of millions of Facebook users without their consent through a third-party app and used it to influence elections and referendums.
Web3 will address the privacy and security issues associated with Web2.
How?
Well, for starters, it’s built on blockchain.
This means that your data won’t be stored in centralized servers vulnerable to large-scale data breaches, but rather encrypted and linked through cryptographic algorithms, ensuring better security and privacy.
Additionally, you’ll have full control over your data through ‘self-sovereign identity,’ which allows you to selectively share data with apps on a need-to-know basis, reducing exposure to unnecessary risks.
Plus, smart contracts allow for secure transactions without intermediaries, further reducing the need to provide third parties with your data.
Embracing Web3 means embracing a user-centric, safer, and more private Internet experience.
Web3 Is an Identity Layer for the Internet
Worldwide,
Web3 solves both of these problems by adding an identity layer to the web — it lets you manage your digital identity using an Ethereum address and ENS profile.
With an Ethereum address, you get a single, secure, and anonymous login. If you want to change something, like your profile pic or bio, you can do it across all platforms at once. You can also selectively share data with apps.
In addition, you can take your data and money to another platform whenever you want to without losing your details, digital assets, and reputation.
Most Web3 platforms don’t have the power to shut down your account — but some do. If you violate the terms and conditions and your account is terminated, you’ll still own your data and assets and you can just plug them into another interface.
Finally, Web3 platforms — aka dApps (decentralized apps) — are accessible and open to anyone, no matter where you’re located. You just have to click the “Connect Wallet” button to sign in.
Speaking of which, what the heck is a ‘wallet?’
What Is a Web3 Wallet?
A Web3 wallet, or crypto wallet, is a digital or physical device used for interacting with dApps on the blockchain.
It keeps your private keys secure and allows you to store, access, and trade your digital assets, including cryptocurrencies and tokens. A private key is a unique code required to access wallet funds and assets. It also enables you to verify your digital identity.
The most popular Web3 wallets include MetaMask, Coinbase Wallet, and Trust Wallet.
Some of the best physical crypto wallets, called ‘hardware wallets,’ include the NGRAVE ZERO, Trezor Model T, and Ledger Nano X.
With a
Web3 Is a Money Layer for the Internet
Web3 has native payments. With a Web3 wallet, you can spend, send, and receive cryptocurrency online without the need for intermediaries like banks or payment processors.
The main advantage is that it allows people in countries where payment processors aren’t available or where banking infrastructure is weak to participate in the global economy.
Cryptocurrency is fungible, meaning individual units are worth the same. For example, every Bitcoin unit is worth the same as another (1 BTC = 1 BTC). Non-fungible tokens (NFTs), on the other hand, are unique.
Pretty much anything can be turned into an NFT. Here are some examples:
- Digital art
- Music albums or songs
- Collectible cards
- In-game virtual items
- Intellectual property rights
- Digital certificates or diplomas
The possibilities of Web3’s money layer are endless: NFTs can be split up and owned by several people, digital assets can be used as collateral to get DeFi loans, digital art or music can yield royalties forever… You can even own what you create on social media and the platform itself.
Web3 Allows You to Own What You Create Online
Globally,
Imagine Web2 social media platforms are museums. You create content, like posts, pictures, or videos, and display them in those museums for visitors to see.
But once you do that, you lose control over your content. The museum owns it, and they can decide what to do with it — even if you change your mind later.
For example, Instagram makes billions in profit. Meanwhile, users post content on the platform for free and click on ads without ever being compensated for their contributions.
Besides, Instagram can just decide to shut down your account. All your photos, videos, stories, followers, and reputation will be lost overnight.
There’s a huge power imbalance between platforms and users.
Now, in Web3, rather than displaying your content in a museum, you have your very own gallery where you keep everything you create and own. You get to decide who can see, use, and share it — and there are several monetization options for content creators.
If you decide to leave a platform, you can take your content and reputation with you and simply plug it into another platform.
No matter what happens, your data and digital assets will be alive and well on the blockchain. In fact, everything is stored on the blockchain, removing the need for trusted third parties.
Web3 Eliminates the Need for Trusted Third Parties
In 2021, OnlyFans
Although creators managed to get OnlyFan’s decision reversed, this just goes to show that we put too much trust in Web2 platforms acting in our best interest.
Web3 is trustless, meaning participants can interact directly with one another without the need for ‘trusted’ third parties that can change the rules of the game whenever they want to.
The technology that Web3 is built on — blockchain — is like a global notebook that everyone shares. We all write the rules and scores of the game together, and once something is written on that notebook, no one can secretly erase or change it.
This way, we all know:
- Who owns what
- That we’re playing by the same rules
- That no one has the power to take away our livelihood or online identity
We can trust each other without having to rely on corporations or other entities.
Web3 allows you to own your identity, content, and audience, but it doesn’t stop there. In this new version of the Internet, you can also own part of the platforms and services you use.
Web3 Gives You Co-Ownership of the Platforms and Services You Use
In Web3, you can co-own the platforms and services you use through tokens. When you join a platform, you might get tokens that represent your ownership or stake in the platform.
In some cases, they give you a say on how the platform is governed and operated, but receiving rewards or benefits based on your token ownership is more common. As the platform grows, your tokens might increase in value.
The idea behind this co-ownership model is that stakeholders (i.e., users) are deeply incentivized to help build, improve, and grow the business, which in itself can be a competitive advantage.
Here are a couple of examples of Web3 social media platforms where you can earn tokens:
- Minds gives you $MINDS tokens for bringing in new users, driving traffic to your posts, and producing engaging and original content.
- Phaver rewards active users with platform ownership through tokens.
NFTs can also be tokenized to divide ownership among several people — and so can physical assets, like land or real estate. Other novel ownership models Web3 allows include social and community tokens.
In sum, Web3 makes novel ownership and monetization models possible.
But, if you can share an asset, you also need to define how owners collectively decide what happens to that asset — that’s where cooperative governance comes in.
Web3 Makes It Easy to Set Up Cooperative Governance and Ownership
Some Web3 platforms are
They allow stakeholders to vote on proposals, control funds, and make decisions collectively without relying on a central authority.
DAOs can be as simple as a group of people coming together to
DAOs and cooperative governance are two whole topics on their own. For brevity’s sake, what’s important to highlight here is that blockchain and Web3 allow us to easily come together, pool capital, and make decisions in an organized and effective way.
How? Through innovative technological possibilities such as:
- Tokens: You can tokenize just about anything, including businesses, NFTs, communities, and land. Each token acts like a share in a company, giving the holder predetermined rights like voting power, part of the profits, rewards, and more.
- Smart contracts: These contracts are written in code and automate and enforce the terms of an agreement without the need for intermediaries, allowing for transparent, trustless, and automated governance processes.
- Blockchain’s transparency: This feature ensures that all transactions and decisions made within a cooperative are visible and auditable by all participants. This openness fosters trust and accountability.
- Blockchain’s immutability: Once data is recorded on a blockchain, it’s almost impossible to alter or delete it. This ensures the integrity of governance decisions and ownership records.
Web3 participants have all the tools they need to rally behind a common goal and effectively establish cooperative governance and ownership in a democratic and decentralized way.
Enough Theory — Get Out There and Explore Web3
Reading blog posts, watching YouTube videos, and taking online courses are all great ways to learn about Web3. But nothing beats exploring it yourself.
Start engaging with Web3 enthusiasts on Twitter, join Web3 communities on Discord, create a Web3 wallet and buy some crypto, or play blockchain games. Developers can even get involved in Web3 hackathons.
Get out there and start exploring!
Also published here.